The topic of Social Security reform is heating up now that the Social Security Trustees released their annual report that showed that the Social Security trust funds will remain solvent until 2033. This is a slight adjustment to the last report which estimated solvency would last until 2034. You might believe the Trustees report is bad news for Social Security, but many experts exhaled a sigh of relief when the report was actually released.
Many thought the report was going to be much worse and expected the solvency of the trust funds to be diminished much sooner due to the COVID-19 pandemic, so there was some optimism after solvency was cut by just a year. Another issue that had people cringing until the report was released was that the report was well overdue. The Trustees annual report is typically released during the spring so the fact that this report was not issued until nearly fall had people wondering how bad the news was going to be?
Now the discussion is how to solve the solvency problem. Forbes recently published a story regarding the political struggle that seems to be coming at some point of how to fix Social Security’s lack of funding. Below is a portion of that story.
The Political Outlook for Social Security Reforms
The Biden administration and its Congressional allies are focused on threading the political needle for an ambitious $3.5 trillion infrastructure spending package, while also dealing with the fallout from the chaotic withdrawal from Afghanistan.
Leading Republican legislators have called for so-called entitlement reform (think Social Security benefit cuts), but that’s a tough sell in the current Democratically controlled Congress.
“Does the report mean the timetable argues for real concrete action on [addressing solvency issues of] Social Security? Probably not. Will it revive the rhetoric that the sky is falling? Sure,” says Robert Blancato, national coordinator of the Elder Justice Coalition advocacy group, president of Matz Blancato and Associates and a 2016 Next Avenue Influencer in Aging.
The issue over how best to restore financial solvency to Social Security isn’t going away. That’s because the program is fundamental to the economic security of retired Americans. Social Security currently pays benefits to 49 million retired workers and dependents of retired workers (as well as survivor benefits to six million younger people and 10 million disabled people).
However, the tenor of the longer-term solvency discussion has significantly changed in recent years.
To be sure, a number of leading Republicans still want to cut Social Security retirement benefits to reduce the impending shortfall. Their latest maneuver is what’s known as The TRUST Act, sponsored by Utah Sen. Mitt Romney.
It calls for closed-door meetings of congressionally appointed bipartisan committees to come up with legislation to restore solvency by June 1 of the following year. The TRUST act would also limit Congress to voting yes or no on the proposals. No amendments allowed.
