For more than eight decades, Social Security has been the bedrock of financial support for our nation’s elderly populace. Stats from the Center on Budget and Policy Priorities indicate that in 2022 alone, 22.7 million individuals were lifted above the federal poverty threshold by the guaranteed payments offered by Social Security. Within this cohort, 16.5 million were 65 years and older.

Given the critical role that Social Security plays in the financial stability of retired workers, disabled workers, and surviving family members of deceased workers, one would expect lawmakers to prioritize bolstering its sustainability. However, the recent yearly assessment of Social Security’s health depicts a rather bleak scenario for this vital program.

The Escalating $22.4 Trillion Long-Term Funding Shortfall of Social Security

Before delving into Trump’s strategy vis-a-vis Social Security, it’s pivotal to understand why the financial outlook of the program has taken a dive. Annually since the issuance of the inaugural Social Security benefit check in 1940, the Social Security Board of Trustees drafts a comprehensive report akin to a corporate balance sheet, detailing the program’s current financial standing.

The Trustees Report also incorporates future outlooks, relying on fiscal and monetary adjustments, coupled with demographic transformations, to forecast the financial robustness of Social Security over the short term (10 years) and long term (75 years) post-report publication.

According to the 2023 Social Security Board of Trustees Report, the program’s long-term funding shortfall has escalated by $2 trillion to a staggering $22.4 trillion. To clarify, this does not imply that Social Security is hurtling toward insolvency. Rather, it signifies that the present payout schedule, inclusive of cost-of-living alterations, is unsustainable in the long run, as per current prognostications.

The Flawed Proposition in Donald Trump’s Social Security Approach

With a clearer understanding of the factors heralding the widening chasm in Social Security’s long-term funding, let’s circle back to the central issue – how best to fortify this indispensable program?

Despite his tenure in public office having concluded over three years ago, former President Trump hasn’t refrained from providing policy recommendations. Pertaining to Social Security, he articulates a clear directive to Republicans in Congress: hands-off.

In January 2023, Trump vocalized in a social media video:

“Under no circumstances should Republicans cut a single penny from Medicare or Social Security. … Do not cut the benefits our seniors worked for and paid for their entire lives. Save Social Security. Don’t destroy it!”

Moreover, during a town hall dialogue with Sean Hannity of Fox News, Trump remarked, “You don’t have to touch Social Security. We have money laying in the ground far greater than anything we can do by hurting senior citizens with their Social Security.”

Trump’s preference for a laissez-faire approach to Social Security, however, is a fatal flaw destined to culminate poorly. According to Trustees’ projections, maintaining the status quo will only widen the fissure in the funding of America’s premier retirement scheme. Although adjustments to the estimated depletion of OASI’s asset reserves may occur in forthcoming years, opting for inaction is an untenable strategy.

The Inevitability of a Bipartisan Resolution for Strengthening Social Security

The formidable challenge hindering lawmakers from directly addressing Social Security’s long-term funding gap is that every potential solution entails a subset of individuals experiencing a regression from their current position.

For instance, Democratic Congress members largely advocate for the reinstatement of the 12.4% payroll tax on high earners’ earned income as the optimal strategy to fortify Social Security.

President Biden envisaged this precise proposal pre-election in November 2020. His plan involved reimposing the payroll tax on earnings surpassing $400,000, while creating a bracket between the maximum taxable earnings threshold ($168,600 in 2024) and $400,000 where the payroll tax wouldn’t apply. As the maximum taxable earnings cap escalates in tandem with the National Average Wage Index most years, this bracket would naturally diminish over time, subjecting all earnings to the payroll tax.

Contrarily, Republican legislators have pondered “rectifying” Social Security through curbing its long-term expenditures. This strategy would entail progressively elevating the full retirement age – the age at which one becomes eligible for full retirement benefits. Presently, individuals born in or after 1960 attain full retirement age at 67.

Several GOP members have floated the idea of raising the full retirement age to as high as 70. This would necessitate either a prolonged waiting period for workers to receive their full monthly benefit or a more significant deduction in benefits if claimed early. In either scenario, subsequent generations of retirees are likely to witness a reduction in their lifetime benefits.

While the Republican design could eventually curtail long-term expenditures, it fails to address the anticipated depletion of OASI’s asset reserves by 2033 as projected.

R Irrespective of which potential presidential nominee – Donald Trump or Joe Biden – assumes office in January 2025, resolving Social Security’s financial dilemmas necessitates a harmonized bipartisan endeavor. A synthesis of elements from the Democrats’ and Republicans’ proposals into a singular bill, akin to the Social Security Amendments of 1983, offers the most viable pathway toward fortifying Social Security and evading imminent benefit cuts within the next decade.

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