Social Security has apparently taken a back seat to more pressing issues in the 2020 Democratic primary, such as offering abortions in foreign countries to combat climate change, giving free health care to illegal immigrants, and calling President Donald Trump a racist at every opportunity. Social Security is on the brink of financial collapse and affects more than 60 million Americans today – and millions more in the coming decades – so you would think the Democrats and the mainstream media would concentrate more on the nation’s biggest Ponzi scheme than they have.
The $150 Billion Plan
Sen. Elizabeth Warren (D-MA) has unveiled a new $150 billion plan that she thinks would extend the program’s solvency by close to 20 years. The 2020 presidential candidate says she would increase Social Security payments by $200 per month, or $2,400 a year, for current and future retirement beneficiaries. She plans to cover the costs by bolstering contribution requirements that would see current taxes hiked and new penalties on the wealthy introduced.
A Warren administration would implement a new 14.8% SS contribution requirement on wages above $250,000, which would be split between employees and employers. Presently, wages top out at $132,900.
The senator would also institute a new 14.8% levy on net individual investment income above $250,000 and family investment income above $400,000. Today, investment income is not subjected to an SS penalty.
“Currently, the rich contribute a far smaller portion of their income to Social Security than everyone else. That’s wrong, and it’s threatening the solvency of the program,” Warren wrote in an email to her supporters, adding that she aims to transform SS into a “more progressive system” that benefits low- and middle-income seniors.
Warren is apparently trying to appeal to seniors, who will ostensibly play a significant role in the Democratic primaries. The early polls suggest that former Vice President Joe Biden is enjoying a sizeable lead over his rivals in this demographic.
Where Do the Other Candidates Stand?
Where do the other candidates stand on Social Security?
So far, Biden has not made the program a centerpiece of his campaign. The three-time presidential candidate has recommended in the past to means-test benefits, raise the retirement age, and increase the ceiling on payroll tax earnings.
Sen. Cory Booker (D-NJ) has proposed to raise the cap on SS taxes to fund the system. Although he has supported raising the retirement age in the past, he now opposes it. Instead, he thinks COLA revisions and entitlement expansions are necessary.
Sen. Kamala Harris (D-CA) has stated that she will oppose any cuts to SS and Medicare. Harris has endorsed legislation that boosts benefits, raises cost-of-living adjustments (COLA), adds student benefits for children up to the age of 22, and updates the special minimum benefit for low-income workers.
Former Rep. Beto O’Rourke (D-TX) has suggested introducing a caregiver credit to Social Security that would give Americans caring for family members who need daily assistance a credit equivalent to 50% of the average earnings of a full-time worker. This, he said in July of 2019, could be collected for five years. He also aims to make it easier for families to collect SS benefits from dead family members and allow full-time students 22 or older to collect a deceased parent’s benefits. He, too, supports higher SS taxes.
Sen. Bernie Sanders (I-VT) believes now “is the time to expand Social Security, not cut it” because most older Americans do not possess retirement savings. He wants to ensure Americans “can retire with dignity,” and Sanders plans to realize this vision by raising benefits by more than $1,300 annually for seniors who earn less than $16,000 a year. The senator recommends covering the cost by making all income north of $250,000 subject to the SS payroll tax.
Social Security is Dead
In April 2019, the Social Security Administration’s trustee report revealed a terrifying truth: The program will exceed the revenue it generates next year for the first time since 1982. By 2035, the report warned, reserves will be exhausted. It makes sense, considering its dreadful management and recent bookkeeping. In 2018, SS barely recorded a surplus as it received $1.003 trillion but spent $1 trillion. With Washington bolstering 2019 benefits by 2.8%, it is not surprising that insolvency is looming. Despite this, it was recently reported that retirees will receive a 1.6% cost-of-living boost, adding up to a little more than $23 a month.
After years of kicking the can down the road by both parties, Social Security has ventured down an unsustainable path. Of the $210 trillion in unfunded liabilities and expenditures, Social Security and Medicare account for a quarter. It will inevitably worsen as neither side is willing to make drastic changes to ensure it is solvent for the next couple of generations.
Politicians will refuse to make tough decisions. To an extent, it is understandable because the smear campaigns are awful as those who want to save the system are accused of tossing granny off a cliff. And who wants to be portrayed as someone who abuses your beloved granny?