Upon the inauguration of the new Congress and the new president of America, the issue of ensuring the future of Social Security will take center stage. With 68 million retired or disabled Americans depending on Social Security, it is alarming that if no changes are done, the benefits are likely to be greatly slashed by the year 2035. According to the Social Security Administration, the two trust funds for retirees and disabled individuals will run out in that year unless preventive measures are taken and introduced. After that point, nearly all individuals receiving benefits will experience a cut in their allowances by approximately 17% of their total amount.
In the light of the upcoming elections on November 5, members of the incumbent and the opposition parties have failed to devise a particular strategy designed to protect the financial health of the Social Security system. Yet some, if not a lot, have been understood already about their treatment of the situation. For example, some of the plans that Trump has suggested have been criticized by experts as ones which could, in fact, worsen the problem.
The Committee for a Responsible Federal Budget (CRFB), a nonpartisan group that focuses on policy analysis and advocacy with regard to the fiscal policy, examined the policies espoused by Trump and claimed that their deployment may lead to Social Security Trust Funds running dry earlier by 3 years to 2031. The figures utilized in this analysis were composted by the Congressional Budget Office, and the CRFB warned that the policies of Trump may compromise the financial status of the program analyzed in this section DCFS.
Elimination of income tax levied on Social Security benefits paid to higher-income column holders is one income strategy proposed by Trump. Though this is something many retirees would wish for, the tax does have its purpose as the funds are towards Social Security’s trust funds. Abruptly removing this tax would lead, according to the CRFB, to a whooping $950 billion deficit within ten years.
Further illustration of Trump’s tax policy is forgiveness of overtime and tips taxes that directly affects payrolls and results to lower revenue for a payroll tax. This will be expected to cause another loss of $950 billion to the trust fund according to the CRFB as well. Currently, many of Trump’s initiatives are aimed at reducing immigration or supporting trade tariffs, which may potentially have some negative effects on the economy of social security. This would mean less immigrant workers, thus lesser contributors of payroll taxes that is used by social security. Imposing tariffs would raise the amount of inflation on social security beneficiaries cost of living increases, while also inflicting a lower taxable payroll due to a recession. These two policy changes, the CRFB reports, could expect to result in another $400 billion in revenues lost during the subsequent decade.
First things first: immigration is a merit rather than a hindrance as even some of Trump’s campaign ads claim. The CRFB incompletely notes that all immigrants, whether documented or not, enter the economy and pay taxes. Some of these undocumented workers even pay for Social Security under made up Social Security numbers and do not collect any benefits.
Trump has vowed that no benefits would be cut, but this is not enough to guarantee the safety of Social Security. And while he pulls back from cuts, it is not so with benefit cuts for most of the old party in the context of the solutions to optimistic long-term built forecast fiscal threats to social security. It is apparent that such close to the elections social security issues will become quite salient and that the victor-is not the ‘will’ but rather – the pronoun ‘who’ incorporates future viability of the system and millions depending on it.
