Are you concerned about your Social Security? Chances are, you should be.
Despite President Trump’s best efforts to spare Social Security in his “skinny budget,” Social Security benefits are slated to be cut, by a minimum of 23 percent, sometime in the next 12 to 17 years.
Of course, Social Security has been in trouble for quite some time now. Since 2010 the program has been “cash flow negative,” meaning that the money going into the program, such as taxes, were not able to cover the money being spent on the program. Last year, alone, the U.S. government paid out $905 billion in Social Security benefits, which was almost 25 percent of all government expenditures. According to a report on cnbc.com, “Last year the deficit covered by interest on the Trust Fund was almost $75 billion, and by 2020 the Trust Fund itself will start to be drawn down.”
Knowing that this crucial program was headed for trouble, the Bipartisan Policy Center created a 19-member commision, consisting of both Democratic and Republican retirement experts, so that they could work together to improve retirement security and personal savings.
The result of their hard work was a program called “Securing Our Financial Future.” Released last summer, this program would hasten a number of changes that would result in a sustainable, cash flow positive program that would avoid the cuts that President Trump so ardently opposes. Per the cnbc.com report, “Half of the improvement comes from slowing down the growth of benefits for the better off, including slowly increasing the retirement age and using a more accurate measurement of inflation.”
One of the most notable changes that this proposal recommends is the increase of minimum benefits for the lowest income retirees. By coupling that with recommended enhancements to widow/widowers benefits, it has been estimated by the Urban Institute for the commission, that poverty among the elderly would be reduced by 30 percent in 20 years, and then 50 percent in 40 years.
Revenue increases for Social Security are also part of this proposal. These would come from, among other things, the gradual increase of the taxable maximum, as well as the increasing of the joint employer/employee FICA taxes by 1 percent over a 10-year period.
Other modifications include the creation of nationwide Retirement Security plans for companies under 500 employees.
It is expected that this plan would result in massive cuts in the deficit while concurrently increasing benefits for lower-income workers.
Mick Mulvaney, the director of the Office of Management and Budget, has emphasized that we must now address Social Security. This bipartisan would help President Trump and Congress to avoid the cuts that the president has steadfastly opposed while, at the same time protecting lower-income Americans from having to live out their golden years in poverty.