Presidential Pledges to Not Touch Social Security Could Lead to 23% Cuts to Benefits
Washington-TND - August 11, 2023 6:29 am
FILE - In this Feb. 11, 2005 file photo, trays of printed social security checks wait to be mailed from the U.S. Treasury's Financial Management services facility in Philadelphia. (AP Photo/Bradley C. Bower, File)
WASHINGTON (TND) — Seniors will soon face a significant cut to their annual Social Security benefits as the entitlement program speeds toward insolvency if lawmakers continue to “not touch” it, a popular stance on the campaign trail and within the halls of Congress.
Candidates on both sides of the aisle in the upcoming 2024 presidential election are facing pressure to vow to not touch the popular social program, a position that risks stiff cuts for today’s 57-year-olds approaching retirement age.
An analysis from the nonpartisan Committee for a Responsible Federal Budget found the “do not touch” approach would cut annual benefits for a typical newly retired dual-income couple by $17,400. A single-income couple would face an immediate $13,100 cut.
Both Social Security and Medicare’s trust funds are on track to reach insolvency within the next decade. Medicare benefits will be automatically cut in 2031 and Social Security is on pace to reach insolvency in 2033.
Once it reaches insolvency, the trust fund that finances benefits can only spend as much as it takes in, meaning tens of millions of people who receive a Social Security check each month will have benefits cut by 23%.
Despite the dire warnings of steep cuts in benefits to the nation’s retirees, workers’ survivors and some with disabilities, lawmakers in Congress and presidential hopefuls are facing pressure to promise to leave the programs alone as voters reject many of the solutions to addressing the fiscal crisis.
Policy experts have identified the looming fiscal cliff for decades, but lawmakers have struggled to come up with a plan with enough political backing to address it despite the fact that the longer it takes, the more severe any remedies will be.
“It’s just political cowardice, and that’s the easiest way to describe it,” said David McLennan, a professor of political science and director of the Meredith Poll. “They think it’ll get fixed by somebody else and we’re getting so close to the deadline that there’s no one else left to fix it.”
Many of the potential solutions to the fiscal issues — raising taxes, increasing the retirement age and cutting benefits — are very unpopular with voters, particularly those at or nearing retirement age and are also the most likely Americans to cast a ballot.
An Associated Press-NORC Center for Public Affairs Research poll earlier this year found widespread opposition to many of the moves to shore up the programs. Seventy-nine percent opposed reducing Social Security benefits and 75% opposed raising the eligibility age from 67 to 70.
Addressing the fiscal crisis has become a political nightmare despite the most dire circumstances that are quickly approaching if the budget shortfalls are not addressed.
“It has costs associated with it. Somebody is going to have to either wait longer for retirement, see their taxes increase, increase their payroll withholding or see benefit cuts and in this kind of political environment, it’s difficult for people to talk about issues that people will have some suffering involved with,” McLennan said.
President Joe Biden made protecting entitlements from cuts proposed from some Republican lawmakers a priority during budget negotiations and on the campaign trail. Former President Donald Trump, the frontrunner for the Republican presidential nomination, has also pledged not to mess with retirees’ benefits.
Biden and Trump’s public statements on entitlements have applied pressure down the ballot and within their respective parties. Some of Trump’s challengers in the Republican primary have proposed making changes to the programs’ funding while protecting current retirees and have been attacked by Trump for doing so.
Without any serious primary challengers, Biden can set the standard for his party on how to deal with the upcoming fiscal crisis. He has proposed a plan to raise taxes on Americans who make more than $400,000 a year to plug some holes in Medicare, though experts are skeptical of how long the budget gaps would be filled for and that plan does not address Social Security.
There have been numerous efforts to address Medicare and Social Security over the years and in the current Congress, but a bill getting to the president’s desk has remained elusive.
How presidential contenders and the candidate who eventually holds the Oval Office over the next decade handle entitlement reforms could decide the fate of the programs and how severe the changes will be. The White House spotlight could also be a tool to get voters’ focus on what comes next following the “do nothing” approach and lessen the political blowback preventing many lawmakers from finding a passable solution.
“A president’s leadership can affect Congress, but it also focuses the attention of the American people,” McLennan said. “I don’t think that people are aware that how serious the problem is, and how immediate the problem is, and that’s where that’s where it takes presidential leadership as well as just congressional leadership to elevate this issue.”