Do Dreams Change in Old Age?
Stephen Hawking 1942 – 2018

The Future of Social Security Under Trump

(EDITORIAL NOTE Oops, how did this happen. It's long and wonky again but it's important.)

* * *

Did you know that due to President Donald Trump's dereliction in appointing federal agency heads, the Social Security Administration is now without even an “acting commissioner” due to regulation limits in regard the length of time someone can hold that title?

As the Washington Post reports, Trump has nominated no one for 216 of 640 positions that require Senate confirmation:


“President Barack Obama nominated Carolyn W. Colvin, but she was not confirmed by the Senate. Nancy A. Berryhill held the acting commissioner title from January 2017, when Trump was inaugurated, until Wednesday, the day after the Government Accountability Office (GAO) ruled that her service violated the law because she had held that title beyond the permitted time.”

As the Post further reports:

“'If an acting officer is serving after the relevant time periods have run, any attempt by that officer to perform a function or duty of an advice and consent office will have “no force or effect,”' Valerie C. Brannon, a legislative attorney with the Congressional Research Service, said Wednesday...”

THE IMPORTANCE OF SOCIAL SECURITY TO ALL AMERICANS
The Center for Budget and Policy Priorities (CBPP) has an excellent page enumerating the many ways Social Security is crucial not just to elders but to almost all Americans. Here are three of them:

”Without Social Security benefits, about 40 percent of Americans aged 65 and older would have incomes below the poverty line, all else being equal. With Social Security benefits, 9 percent do. The program lifts 15.1 million elderly Americans out of poverty.
”About 6 million children under age 18 lived in families that received income from Social Security in 2015.

That number included 3.1 million children who received their own benefits as dependents of retired, disabled, or deceased workers, as well as others who lived with parents or relatives who received Social Security benefits. Social Security lifted 1.1 million children out of poverty in 2015.
”Social Security...benefits are not means-tested. Indeed, universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.7 percent of annual benefits, far below the percentages for private retirement annuities.”

SOCIAL SECURITY FACES DEMOGRAPHIC ISSUES
Just this week, the Census Bureau released its population projections for the years 2020 to 2060. Here is some of the salient information that will affect Social Security:

”Beginning in 2030, all baby boomers will be older than 65. This will expand the size of the older population so that one in every five Americans is projected to be retirement age.

“By 2035, we project that older adults will outnumber children for the first time in U.S. history.

“Beyond 2030, the U.S. population is projected to grow slowly, to age considerably, and to become more racially and ethnically diverse.”

"In other words, the longer Congress waits to act, the more likely it is your Social Security benefit is being reduced.”

Due to those demographic figures, as Motley Fool recently pointed out (and has been known for many years without action by the federal government), the current Social Security payout schedule is unsustainable beyond 2034:

”...Social Security is expected to begin paying out more in benefits than it's generating in revenue by 2022. Just 12 years later, in 2034, the estimated $3 trillion in asset reserves held by the program at its peak in 2022 will be completely gone...

“The [Social Security] trustees [2017] report estimates that it could result in an across-the-board cut in benefits of up to 23% just to keep the program solvent through 2091. That's a reduction in benefits for current and future retirees.

"In other words, the longer Congress waits to act, the more likely it is your Social Security benefit is being reduced.”

IDEAS TO ENSURE THE FUTURE OF SOCIAL SECURITY
In 1983, during the Reagan administration when lawmakers realized Social Security needed an adjustment to sustain itself, SSA taxes were raised and full retirement age was gradually increased over 40 years from 65 to 67.

Even though it has been well known for at least a decade that Social Security now needs another adjustment, our elected officials have abdicated their responsibilities in this regard.

It is not hard to figure out how to “fix” Social Security. Experts have been telling us what is needed for many years. Among the useful possibilities:

Lift the payroll cap, currently at $128,400 of taxable earnings. All income levels should pay the same percentage rate on all their income.

Gradually increase the payroll tax. You might not think so, but Americans are amazingly open to this idea. As CNBC reported a few months ago:

”According to a survey by the National Academy of Social Insurance, 77% of Americans feel that it is critical to preserve Social Security benefits for future generations, even if it means raising taxes.

“Among respondents, 81% agreed that they don't mind paying taxes into Social Security 'because it provides security and stability to millions.' This includes majorities of every age group, income level, and political affiliation.

Those are only two ideas - two of the reasonable ones anyway - but the only proposals from Congress over the past few years are various underhanded cuts meant to destroy what is the country's most popular federal program.

WHAT TO DO TO MOVE FORWARD
It is unlikely that Congress will do anything this year about Social Security (or a whole lot of other important issues that require attention). Their session schedule is one of the shortest in history and they are thinking only about the midterm election.

During the 2017 presidential campaign, Trump promised that he would not follow Republican orthodoxy to pursue cuts to Social Security. Now, nearly 14 months into his administration, we know how reliable those promises are so it may be that Congress's inattention is a good thing until after the November election.

It would be an excellent idea, during the rest of 2018, for the Social Security Administration to develop a policy and strategy to fix the shortfall so to have it ready to go in Congress in 2019.

But that's hard to do when the president of the United States neglects his sworn duties and refuses to appoint a commissioner to lead the effort.


Comments

The future of our democracy and its intrinsic values is on shaky ground. As Americans become even more polarized, as the rich insulate themselves from the lower classes and hoard the American Dream - disengaging from any kind of social empathy, how do we protect those social institutions that provide stability and some equality of life for the average citizen?

Trump is not the cause, but the result of our ever-widening socio-economical gap. Demagoguery is in our White House:

..."And so the masses cheered when Caesar crossed the Rubicon River in 49 B.C. and swept away the career politicians. He promised to shake things up and he did, but it wasn’t long before he proclaimed himself dictator for life. He was killed on the Ides of March in 44 B.C. But by then it was too late. The structures of republican government had been laid waste and the voice of the people was silenced for the rest of the Roman Empire." - Phillip Freeman, Zócalo Public Square.

There is a test to identify a demagogue: if he/she promises to give, restore, provide, insure, or enhance our country, but never asks the citizens to sacrifice, pay, serve, or simply work, then this leader is a potential demagogue. (think of President John F. Kennedy's speech: "Ask NOT what your country can give to you, as what YOU can do for your country. " ) We are so far from that higher plane.

There is no easy fix, no easy answers. In this acutely narcissistic society, we don't like exerting ourselves away from shallow self-aggrandizing social media to do actual important stuff, like self-educate and read deep thinking books. Until we have the courage to turn off the mind-control machine, there is little hope we survive our grand social experiment begun in 1776.

All to say, I hope I am wrong, but I keep hearing this old quatrain in my mind:

The Moving Finger writes; and, having writ,
Moves on: nor all your Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all your Tears wash out a Word of it. - Omar Khayyam

> Social Security ... benefits are not means-tested.

Actually, they are means-tested, by an indirect mechanism.

A portion of one's Social Security benefit is subject to Federal Income Tax. Those with larger incomes pay tax on a larger portion. What one hand giveth, the other taketh away.

.

So, the question for my spouse (six months older than myself) and I, should we go ahead and file for SS now, (we are 64 and full retirement is 66), as SS is earnings-tested.

"Social Security benefits are earnings-tested, not means-tested. And the earnings test stops the second you reach full retirement age. Furthermore, any benefits you lose prior to reaching full retirement age due to the earnings test will be made up to you in terms of higher retirement benefits from full retirement age onward."

Under this scenario, maybe it does make sense to file while we are working (which means our earnings would zero out any cash income from SS at this stage of our life)?

I am thinking SS makes it far more difficult to navigate so as to impede the Doomsday clock for its viability.

I think we need to remember that when SS was implemented the life expectancy was 61.7 years old. Life expectancy in 1930 was 58 for men and 62 for women, however, infant mortality rates are also figured into those numbers. Life expectancy increases are definitely a factor in long-range planning for Social Security. There are also other determining facts such as the size of the "baby boom" generation and the proportion of working people to beneficiaries.

In addition, how about congress thinking about repaying the $2.85 trillion that they have spent from the SS surplus?

I echo loudly Cowtown Pattie’s comment! History has continued to show us the actions leaders take to becoming dictators through the centuries and into the decades of my lifetime. Will we act to prevent that happening here?

Diane raises the question I’ve wondered, too, — with all the spending, when is Congress going to pay back to SS all our dollars they’ve borrowed through the year?

“.....yearS”.

Please don't apologize for the length of this very informative and important article! One of the problems with our society is that people seem to have the attention span of gnats. Everything has to be short, with colored bullet points. YIKES!

During the past election, I sent a Republican I know a magazine article that laid out why I supported Clinton. (I'd agreed to read anything she sent me from the other side) She sent me an email telling me that it was "too long"! It was not a book, just a magazine article! The news we get has to short and punchy - nobody on TV (except maybe Rachel Maddow) connects the dots. And without context, we remain dangerously ignorant.

Many years ago, I became caught up in the HBO series on Rome because it reflected so much of what American culture seemed to be becoming. I try to remain hopeful, but it's becoming more and more of a struggle, and I have to echo others' comments here and say that unless there are extraordinary measures taken very soon, I'm not very optimistic. We don't seem to be very good at implementing preventive measures for sociological problems these days, mainly because it's become almost impossible for us to agree on what the causes of those might be, much less how to fund and orchestrate possible solutions. We've known about the baby boom threat, increasing income inequality. and many of the other pending crises facing us for a long time, and we've kicked all those proverbial cans down the road -- or denied them -- for decades. It's really hard to imagine that this administration is going to be the one that will turn any of them around. Tick . . .tick. . .tick. . .

Just finished my tax prep. I'm paying 10% of my Social Security directly back to the IRS. Not my choice.

I am pleased to get/keep what I do. I NEVER EVER really expected it to pay me anything.

Maybe in 2020 things will turn around. If not then we will have a dictatorship.
My biggest concern for the future is water. With this Trump guy( Sorry can't call him President) he is the worst we have seen on the environment.
Thanks for a great post Ronnie.

Dear Ronni, I don't think this president "thinks." He simply acts on his latest whim. Nor does he read history and know anything about what Congress is meant to do. Nor has he done any reading to know what a president is meant to do. He is politically and historically illiterate. Peace.

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