The Social Security trustees issued their annual report on the program’s financial condition earlier this year, along with their companion report on Medicare. As in previous years, these reports contain sobering news that lawmakers and the public need to know.
#1: Social Security faces a huge financing shortfall.
#2: The shortfall is certain.
#3: We are running out of time to save Social Security, if we haven’t already
#4: We need public trustees.
Then you have a progressive view of the same report, a sadly very misleading view. Anyone who says that Social Security has a surplus, especially in light of the fact the trustees must begin to redeem bonds in the trust in 2020, is reprehensible.
Of course, nobody wants cuts, but there is no talk of cutting anyone’s benefit, more like tweaking the full retirement age, or the COLA calculation. The trustees have been saying for years that higher taxes, changes in future benefits or a combination of both are necessary to keep the program sustainable.
Any government program is affordable if the taxpayers want to pay for it. The problem with Social Security is that nobody in the last twenty years has been willing to address what needs to be done or to tell the American people the truth.
An unfortunate politically driven positive spin that misleads.
The most important takeaways from the 2019 Trustees Report are that (1) Social Security has a large accumulated surplus, and (2) Social Security is extremely affordable. In three-quarters of a century, in 2095, Social Security will constitute just 6.07 percent of GDP. That is considerably lower, as a percentage of GDP, than Germany, Austria, France, and most other industrializedcountries spend on their counterpart programs today.
The 2019 Trustees Report projects Social Security’s cumulative surplus to be $2.9 trillion. It shows that Social Security is fully funded until 2035, 93 percent funded for the next 25 years, 87 percent funded over the next 50 years, and 84 percent funded over the next 75 years.
Often, the release of the annual Trustees Report leads to lamentations from many observers that Congress has no plan to address Social Security’s projected shortfall. That is incorrect.
It is Congressional Republicans who have no plans – at least that they are willing to publicly embrace. That is perhaps because their preferred “solutions” involve benefit cuts, which are overwhelmingly opposed by voters across the political spectrum, including their own Republican base.