By Max Richtman
It was inevitable that after the 2022 Social Security Trustees report came out that we would see plenty of conservative commentary insisting that the program is headed for “bankruptcy” and “disaster.”
The Trustees projected that Social Security’s combined trust funds would become depleted in 2035, after which the program still could pay 80% of scheduled benefits — if Congress takes no pre-emptive action. In response, some conservatives insist that somehow the only way to keep Social Security financially strong is to cut benefits and privatize the program.
This threadbare narrative is bumping up against reality in 2022, because not only did the Trustees push back the insolvency date of the Social Security trust fund by one year because of an unexpectedly robust economy, but there is legislation pending in Congress right now to strengthen the program without benefit cuts.
Many fiscal conservatives have opposed Social Security from the beginning, though today they mouth platitudes about supporting the program. Never mind that their “reform” proposals would undermine it at the very core. For decades, Social Security has provided working Americans and their families with basic financial security. Thanks to the dwindling availability of pensions and the increase in wealth inequality , some 90% of retirees rely on Social Security for at least half of their income. Projections indicate that today’s young adults will depend on Social Security even more than previous generations as they age.
In the face of these realities, conservatives continue to beat the drum to “reform” Social Security in ways that ask beneficiaries to make all the sacrifices — and change the way it works on a fundamental level. Here are some of the arguments conservatives have dusted off since the Trustees report was released, and why they are unfair to workers and their families.
‘Social Security benefits are already generous enough. There is no need to improve them across-the-board except for the poorest and oldest.’
The average Social Security benefit is only about $1,600 per month—or less than $20,000 per year. That amount is woefully inadequate for seniors trying to make ends meet while the out-of-pocket cost of healthcare and other necessities skyrocket. Even though the 2022 cost-of-living adjustment (COLA) was 5.9%, and next year’s may be higher , COLAs have not kept pace with the cost of essential goods and services. Too many beneficiaries are already having to choose every month between groceries, rent, prescription drugs, and medical bills because they can’t afford all of them. While it’s true that the poorest and oldest beneficiaries need special benefit improvements, most seniors and people with disabilities also need an income boost.
‘Social Security should be converted from an earned benefit to an antipoverty program.’
Some conservatives propose to cut benefits for higher wage earners. That alone would not sufficiently extend the solvency of the trust fund, but it would alter the fundamental nature of Social Security. All workers who contribute to the program with every paycheck are guaranteed to collect benefits upon retirement, disability, or the death of a family wage-earner. That is why we call Social Security an “earned benefit.” It does keep some 25 million beneficiaries out of poverty, but unlike most federal antipoverty programs, Social Security is self-funded. President Franklin D. Roosevelt wanted the system to be funded by workers themselves so that ”no damn politician can ever scrap my Social Security program.” Social Security is a promise to all workers who contribute their hard-earned wages. Means-testing the program would destroy that compact and undermine public support for Social Security.
‘Workers should be allowed to divert their Social Security contributions into private accounts.’
Privatizing Social Security is a favorite conservative proposal that President George W. Bush tried — and failed — to implement during his second term in office. It’s just as bad an idea now as it was in the early 2000s. Of course, that was before the market crash of 2008, when millions of Americans saw their retirement savings wiped out . Unlike stocks and other private investments, Americans can count on their Social Security benefits during times of prosperity and times of economic turmoil. The stock market has already lost $3 billion in value since January, and according to one investment firm, more than half of 401(k) accounts have lost between 10% and 22% this year.
Imagine what it would be like if you planned to retire this year and your privatized Social Security account plummeted in value during the latest market downturn. You’d have significantly less income in retirement. On the other hand, Social Security has never missed a benefit payment. Wall Street would love for Social Security to be privatized; workers and retirees, not so much.
‘Younger adults can’t count on Social Security to be there for them when they retire’
Conservatives devised a strategy in the 1980s to corrode public support for Social Security by planting seeds of doubt about the program in the minds of younger workers. This strategy is still evident today with claims that Social Security will not be there for today’s young adults when they retire—or that they would be better off by investing their payroll contributions on Wall Street. In truth, projections indicate that today’s young adults will rely on Social Security more than previous generations due to middle-class wage stagnation, mounting student debt, and the dearth of other sources of retirement income. According to an Urban Institute study, the average m illennial will receive about twice the average amount of Social Security that today’s retirees collect.
In fact, Social Security disability and survivor’s insurance covers millennials and their families well before retirement. The average young adult with a spouse and two children would have to purchase more than $600,000 in life and disability insurance to replace the protections Social Security provides. In fact, some 1.2 million Millennials already receive benefits. Despite conservative efforts to convince them otherwise, many younger workers understand that Social Security has provided baseline financial security to several generations of Americans, including their parents and grandparents. With such a successful track record for Social Security, there is no reason that anyone — younger or older — should want to compromise it now.
‘Social Security is going bankrupt and Washington is doing nothing about it.’
This is a favorite trope of conservative commentators. But the truth is that Social Security will never go “bankrupt” as long as Americans continue to be employed. The trust fund reserves may become depleted, but only if lawmakers fail to make changes before 2035. There are, in fact, several proposals for avoiding trust fund insolvency (the GOP mainly wants to cut benefits and privatize the program), but only one party actually has introduced legislation in the 117th Congress to strengthen Social Security.
The chair of the House Ways and Means Social Security Subcommittee, Democrat John Larson, has put forward a bill— Social Security 2100: A Sacred Trust —which would not only extend trust fund solvency but expand benefits. Under his bill, everyone on Social Security would receive a 2% increase, with lower-income beneficiaries, widows and widowers, and the “oldest of the old” receiving an extra boost. Larson’s legislation would also convert the current COLA (cost-of-living adjustment) formula to the more generous and more accurate CPI-E (Consumer Price Index for the Elderly). To raise revenue, the Sacred Trust bill would adjust the payroll wage cap so that higher income earners would continue contributing to Social Security on wages exceeding $400,000 per year, aligning with President Biden’s pledge not to raise taxes on anyone earning less.
Sen. Bernie Sanders (I-VT) and Rep. Peter DeFazio (D-OR) have introduced a similar bill, the Social Security Expansion Act , which would boost benefits by $200 per month, adopt the CPI-E as the formula for calculating COLAs, and require higher earners to contribute to payroll taxes on wages above $250,000,
On the other side of the aisle, Republicans have offered several ideas to “reform” Social Security — all of them bad for beneficiaries. Sen. Mitt Romney (R-UT) has been pushing the TRUST Act , which would relegate solutions for Social Security to a special congressional committee meeting behind closed doors. Any proposals from that committee would be fast-tracked to a floor vote in both the House and the Senate, bypassing the usual deliberative process, essentially cutting the American people out of the debate.
Earlier this year, the House Republican Study Group advocated raising the retirement age as high as 70, cutting benefits for higher-earners (means-testing), and private accounts. But perhaps the most alarming proposal came from Sen. Rick Scott , chair of the National Republican Senatorial Committee, to compel Congress to reauthorize all federal programs (including Social Security) every five years. If a new Republican majority voted not to renew Social Security, tens of millions of seniors, the disabled, and their families would see their benefits disappear.
Both parties agree that Social Security is at a crucial and perilous crossroads. Congress should act now to eliminate the threat of trust fund insolvency. But lawmakers must also act responsibly on behalf of all Americans, especially those living on fixed incomes and squeezed by ever-rising living costs, who depend on Social Security for financial survival. Meanwhile, Congress must reject conservative prescriptions consisting of means testing, privatization, and benefit cuts. If anything needs to be cut, it’s proposals from fiscal hawks that would upend the successful 87-year run of Social Security, a program as reliable as the workers who fund it — and the retirees, disabled and their families who count on it.
Max Richtman is president and CEO of the nonprofit National Committee to Preserve Social Security and Medicare.