Fear and reaction erupt when major calamities occur without notice. Boredom and procrastination erupt when major calamities build up slowly over time.
“Social Security retirement trust fund may be depleted in 2032, new trustees report finds,” screamed the CNBC headline last month. Government leaders responded with talk, no action. AARP said they need to "wake-up."
The latest Social Security trustee’s report now projects reserves will be depleted by the end of 2032. Should that happen, retirement checks would be cut 22% across the board.
AARP’s CEO, Dr. Myechia Minter-Jordan, called the report a “wake-up call.” She urged Congress to protect Social Security, noting that cutting benefits is “not an option” for the 125 million Americans aged 50 and older.
Treasury Secretary Scott Bessent, who serves as Social Security’s managing trustee, sought to dampen concerns calling the benefits a “foundational commitment.” He seemed to suggest that eliminating waste, fraud, and abuse could solve the shortfall. And, yawn, he, as have many before him, pledged to work with Congress to preserve future benefits.
Social Security reserves are invested in special-issue U.S. Treasury securities. When the payout of benefits exceeds incoming revenues – which has been the case since 2021 – the Social Security Administration has to redeem securities. To pay for that, Bessent’s Department of the Treasury must come up with the cash. Where does such cash come from? Either it comes from general government revenues or from new public borrowings, i.e., government debt.
Let’s see, general government revenues through three quarters of this fiscal year are already $1.4 trillion below expenditures. And the national debt is nearing $40 trillion and 100% of GDP. Since 2021, Social Security shortfalls have been making these worse.
By the way, Bessent’s solution to solve the national debt problem is to reduce the annual deficit to 3% of GDP by 2030 (it’s running over 5% now). And, he says, we need to do that before tackling long-term fiscal issues like Social Security.
Uh huh.
The trustees said three things negatively impact projected Social Security reserves. Two will result in fewer workers paying into the system: 1) declining fertility rates that are unlikely to rebound; and 2) declining numbers of Social Security tax paying immigrants. The third results from lower income taxes on Social Security benefits flowing into the system due to the One Big Beautiful Bill Act.
If the benefit cut eruption were now, voter fears would have all our senators and congressmen panicking over their irresponsible votes boosting deficits. Since the eruption is still years away, neither voter fears nor politicians’ reactions will be on display during this year’s voting.
Zzzz.
“As you sleep, poverty creeps upon you like a robber and destroys you” – Proverbs 6:11.
Crawford is an author and syndicated columnist from North Jackson.
19 comments:
As a recipient of SS I support a 22% reduction if needed, I would also support curtailing high income SS beneficiaries from collecting SS.
Yawn is right. We printed trillions and gave it away via PPP to utility contractors (and many many others) that didn't need or deserve it, and without a word from Bill Crawford. We give free healthcare to many, including illegals that pay nothing at all into the system. The list goes on and on and on. So, we need no lectures or cuts to SS for working folks they have paid what they owed into the system for many decades. Just keep printing.
Maybe if SS was used only for those who have paid into it they would be in better shape. Too many people are receiving SS benefits that have never paid in a single dime. Some are not even citizens of the U.S.
I just began received Social Security and also support a 22% reduction. We cannot burden the young people with higher Social Security and Medicare tax rates. A 22% reduction in Social Security benefits would go a long way towards reducing the budget deficit.
Mamdani may have converted the whole country to his way of thinking by that time.
If the FAT CATS in DC cut SS, there will be a revolution. They are living like Kings and Queens off the fat of the land and if they want to see the GravyTrain pull into the station, all they have do is to mention cutting SS. I do not believe that it will ever happen!!!
Love the tough guy posts supporting a 22% decrease in “their SS” while our vote buying politicians teach people to:
Scam the system with NGOs like Feeding Our Future;
Draw disability and SS while still being able to climb trees to deer hunt;
Create taxpayer-funded shelter and housing-related assistance to migrants that are here illegally and pay nothing into the system, and work for cash;
etc., etc., etc.
Likely just more Bill Crawford types hoping Republicans commit idiotic political suicide by cutting SS. Just like Crawford wants MS Repubs to “fix PEERS” so his Democrat Crime Party buddies can take over MS.
Yawn.
The real problem is the scam on social security disability.
Young Claimants receiving disability payments for because of morbid disability are bankrupting the system. Never paid a dime in.
I grew up dependent on SS so I know it's a good thing, but it's better to have SOMEthing instead of NOthing. WE've known for more than 40 years we needed to adjust and we kept sending to DC weak people with more selfish ambition than selfless cognition. We need to protect the idiots from themselves now and protect the truly needy like I used to be. WE, that's Obviously U and I...oui?
À major problem is the $184,000 cap on taxed income. Anything above that is not taxed. Eliminating the cap would go a long way towards improving solvency.
Hell of a solution offered by Trump's Secretary Bennett - let's fix the deficiet problem by making the annual deficiet be 3% rather than 5%. Hell, why not try to actually fix it by reducing spending or increasing income so that the annual deficiet is 0%, maybe even a little bit on the positive side.
But no - that's no fun. Gotta spend, even though we don''t have anything to spend. The SS fiasco isn't the real problem - they'll make sure that there are no benefit cuts come 2032 or whatever year it is required, but not before. They'll fix this by non-other than increase the borrowing, not by fixing the system - maybe removing the cap on those that pay into SS
Despite the two generous (probably wealthy) commentors above who support a 22% cut in SS benefits, that is not the solution. Currently the benefits are not keeping up with inflation and should not be cut but should be increased to at least maintain the status quo.
SS is not a retirement fund but is a repayment of funds to those that provided input; or at least that is what it is supposed to be. The added 'disability' payments to those that have not provided any input should not be coming out of the SS fund; if Congress wants to take care of those folks, do it through a regular appropriation, just like they fund all the other crap that is popular.
The falicy to this whole system is that there is a cap on the amount of income that is taxed for SS meaning it is paid for by lower income folks rather than the middle and higher income population. Fix that and over the long term some of these problems could solve themselves
Make that morbid obesity
Im not for a reduction. Im for a responsible budget that cuts waste and makes SS among the priorities. Let's clean and tighten before caving in to a reduction.
Just give me the money input in back to me. No interest. Just give me MY money. Crawford is a clown.
The first time I hear of Welfare and SNAP being cut I’ll start losing sleep.
There ya go. let's do that. Way to stick it to the self employed and small business owners.
What do you mean stick it to em, that group includes the biggest tax delinquent, cheating.group on the face of the earth.
Another road sign along the highway headed towards our national insolvency. Just wait until the currency devaluation.
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