by Sam Hatcher

Social Security is often revered as a subject for which many can identify the problems but few have solid answers. At least answers that are acceptable for the masses who either depend on the benefits from the program now or those who are paying into Social Security with plans to draw from the program in the future. In years long gone by there were no major issues or concerns regarding the Social Security program in the U.S., but in recent years data indicates that the coffers that provide the funding for the program may well be in jeopardy and that Social Security could likely be in big financial trouble. Consider this: According to the Social Security Trustees report, the social program’s main fund has a surplus that is invested in special U.S. government bonds.

Three years from now, in 2019, Social Security’s total income receipts from payroll taxes and interest will start to fall behind the total cost of benefit payouts on an annual basis. After 2019, additional money will be taken out of the Social Security trust fund to pay benefits by selling some of those IOUs from the government.

Most agree that a major reason for recent concerns involving Social Security is that this particular benefits program of the federal government is underfunded.

In reality there is no actual government fund that is able to supply the benefits for this program and, unlike other private sector retirement and insurance programs, the funds held by Social Security are not invested or placed for safekeeping so as to encourage financial growth. Funding for Social Security actually comes from those still in the workforce who are paying employment taxes that are contributed to the Social Security fund.

In the past the mechanics of the program have been sufficient to sustain its funding because the active workforce was much larger than the group of retirees drawing Social Security benefits. But in recent years this has seen a dramatic change.

For decades there were 16 workers for every one retired person drawing from the fund. And now the ratio has changed to the point that there are only three people supplying the funding for every single person who is retired. In the not too distant future it’s estimated that the ratio between those working and providing the funding for Social Security and those who are retired will likely drop to about 2 to 1 which will further endanger the sustainability of the funding for the program. While the November presidential election is less than a month away, the two candidates representing parties of the donkey and elephant have avoided detailed discussions about what they might do to resolve the seemingly always crisis facing sustainability of Social Security.

Even though both Republican Donald Trump and Democrat Hillary Clinton talk about Social Security and acknowledge that the pension program for seniors continues on a path that provides no guarantee for the future, neither has said exactly what their respective plan might be to salvage the longstanding program and revive its viability.

Ironically, while both candidates differ so broadly on so many national issues including immigration, defense, foreign relations and other topics, they seem to somewhat mesh their campaign strategies and promises together when it comes to speaking about Social Security. Both hold it’s a program in which seniors should have confidence.

Both seem to believe that disrupting Social Security or dramatically changing the way the program is conducted would be a grave error and an unforgivable sin with respect to how they each would conduct the business of the Oval Office. Clinton has said that “Social Security must continue to guarantee dignity in retirement for future generations.”

Campaign statements she has made are relatively clear that she believes higher-income workers should pay more through higher payroll taxes to help keep the system alive and well, and that higher-income beneficiaries should pay more income tax on Social Security benefits. Trump says he will sustain Social Security by establishing “an economy that is robust and growing.”

However, his campaign expresses no specific ways or means or exactly how Social Security might be benefited from a vibrant and growing economy.

Clinton has maintained that she will “fight any attempts to gamble seniors’ retirement security on the stock market through privatization.” That she will “oppose reducing annual cost-of-living adjustments.”

She has committed to oppose Republican efforts to raise the retirement age saying it is “an unfair idea that will particularly hurt the seniors who have worked the hardest throughout their lives.”

And finally she states she will “oppose closing the long-term shortfall on the backs of the middle class, whether through benefits cuts or tax increases.”

Other add-ons to these positions offered by Clinton and more or less consistent with what her campaign’s website states is that she would enhance benefits for women who are widows and those who took significant time out of the paid workforce to take care of their children, aging parents or ailing family members.

Trump seems to reason that much of Social Security’s problems can be found or solved perhaps through different paths relative to taxation.

He has told AARP seniors can get relief through tax reform that streamlines tax brackets, removing carve-outs for special interests and eliminating the alternative minimum tax and death tax.

He thinks that reforming corporate taxes, including a reduction in the corporate income tax rate can be helpful to seniors as well as renegotiating trade agreements and repealing the Dodd-Frank Act and the Affordable Care Act.

He says attacking fraud and waste in the federal government and reducing the size of the federal workforce can be important and argues that reforming immigration policies that will “save hundreds of billions of dollars a year in education, health care and public safety costs,” can also provide advantages for the senior population.

Although Trump’s website contains no stated positions on Social Security, he’s said throughout the campaign that he opposes any changes to the program.


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