Throughout the 2016 election, Donald Trump pledged that he would not make any changes or reforms to Social Security and preserve the fund. He said that he would make up for the shortfalls through economic growth and government savings. Well, it seems he will need a lot of growth and government savings in order to cover the massive Social Security shortfall. How much? More than $11 trillion.
According to a new report from Charles Blahous, a senior research fellow at George Mason University’s Mercatus Center, Social Security’s trust fund will run out sometime around the year 2030.
The report iterates a common fact: Social Security is running out of money.
“Just to keep the system afloat from year to year at that point they would have to inflict near-term pain over three times as severe as was the case in 1983,” Blahous said. “The politics of Social Security reform is not getting any easier. When the trust funds run out, it will be too late.”
Texas Congressman Sam Johnson has presented reforms that would save what’s left of Social Security.
Some have supported modest changes to the Ponzi scheme, such as raising the age to receive full retirement benefits from 67 to 69 and capping payouts to high-income workers. However, it seems that there isn’t an appetite among a majority of Republicans and Democrats to make these kinds of changes that would at least preserve the system for a little bit longer.
“I urge my colleagues to also put pen to paper and offer their ideas about how they would save Social Security for generations to come. Americans want, need and deserve for us to finally come up with a solution to saving this important program,” Johnson said in a statement.
In the past, the Social Security Administration (SSA) has noted that such a plan would remedy the funding shortfall for several decades, adding that raising payroll taxes or making spending cuts would not be necessary – this is something that politicians usually do when there is a funding gap.
Time is beginning to run out. After 2019, it is projected that Social Security will pay out more than it takes in, which means it must start tapping its reserves.
Eventually, when interest rates start to go up, more deficits are added to the national debt and debt servicing payments increase, the federal government will only be able to afford debt payments, the military and some remnants of Social Security.
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