Social Security reform in the light of day
Let's have a vote this year on a plan to boost solvency and expand benefits
Social Security has never failed to make its benefit payments since the mailing of monthly checks began in 1940, but most Americans these days are worried about the future of the program.
Who can blame them? Social Security’s two trust funds are projected to run dry in 2034, and the program would be able to pay only 80% of its obligations to retirees and disabled workers at that point. Politicians don’t exactly generate confidence when they make irresponsible - and wrong - comments claiming that Social Security is going bankrupt or completely running out of money.
The result is public skepticism and concern. Forty-two percent of working Americans tell Pew Research Center pollsters that they doubt they will receive any benefits from Social Security. An equal share thinks they will receive a benefit, but at a reduced level.
The Social Security trustees have been projecting this shortfall since the early 1990s, but the U.S. Congress has failed to act. What we need is a full, public debate on reform legislation - and an actual vote by lawmakers. The window is open for that to happen this year - the Democratic Party has developed an internal consensus on legislation that addresses the solvency problem, and also expands benefits modestly. It controls both legislative chambers - at least for now.
The Social Security 2100 Act is supported by 202 House Democrats - in other words, nearly the entire party caucus. The bill probably cannot jump the hurdle of a Republican filibuster in the U.S. Senate, but it is imperative to get everyone in Congress on the record with a vote on this issue.
“People have got to know where you stand,” said U.S. Representative John Larson, a Connecticut Democrat and chief sponsor of the legislation.
Learn more in my column for Reuters Money.
Managing the tax impact of Social Security and savings income
Tax expert William Reichenstein joined the hosts of Morningstar’s podcast The Long View to talk about the interplay of Social Security, savings drawdown and taxes. Bill is an emeritus professor of investments at Baylor University, and a co-founder of Social Security Solutions, the maker of Social Security optimization software. Click here to listen and learn.
What I’m reading
Medicare Advantage plans often deny care, federal report finds . . . Medicare Advantage is not the solution to equity or solvency problems . . . Millions who retired early due to COVID-19 are working again . . . The American retirement system is built for the rich . . . Watch out when buying on Amazon . . . A tv series tells the story of Eric C. Conn, who ripped off the Social Security Administration to the tune of $550 million.