You Don’t Need Social Security, Right?
Last week, the trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds released their latest financial status update.
That long-winded name is better known as Social Security, and the disability program associated with Social Security.
It’s no secret that many Americans will rely on Social Security – either as a supplement to their retirement savings, or as their full retirement income – when work, and its accompanying paycheck, is no longer an option.
There is one major problem, though, and that’s that the Social Security program has not been fully funded for years now.
Social Security Funding
Which is exactly what the trustees’ latest report has shown, once again.
Without significant reforms, it is estimated that by 2034, Social Security payments to all recipients will be cut by 20 to 25%.
A $1,200 monthly Social Security check will become approximately $925. Not good, considering every dollar counts for many recipients.
The date at which these payment reductions will need to be made is one year earlier than the previous trustees’ report estimated.
And I won’t be surprised if this date moves closer as the years progress.
Many news outlets reported this story as if it were something new. Unfortunately, that’s far from the case.
I’ve written about this Social Security funding shortfall for years now, making it a central point in Savings Beagle’s Quarterly Updates and federal budget overviews. As well as in other online publications going back a decade now.
No, this Social Security funding shortfall issue is nothing new, and neither is Congress’s lack of consideration of the matter.
We’ve seen Congress spend a lot of money over the past year or so. And, currently, legislative proposals are being considered that will spend significantly more. What wasn’t, and is not, part of any of those spending sprees is a plan for shoring up Social Security.
Interesting.
And not to pile on the bad news, but the U.S. government’s Medicare (health insurance for older Americans) and Medicaid (health insurance for low-income Americans) programs are also significantly underfunded, drawing into question both programs’ long-term solvency.
As we’ve pointed out in our federal budget overviews, Social Security and Medicare/Medicaid are the top two expenditure areas of the U.S budget, equaling roughly one-third of total tax dollars spent each and every year.
And, still, they need even more revenue to maintain viability due to increased participation from an aging population that is living much longer than was ever predicted.
These social safety net programs are vital for many older Americans, especially considering retirement savings rates for a large percentage are nowhere near what is needed to maintain a comfortable lifestyle.
The Savings Beagle Connection
The Social Security and Medicare underfunding issue was one of the reasons Savings Beagle was created.
I spent a number of years working in the political/public policy arena with a focus on government budgeting.
The federal government spending issues were quite evident back then, and nothing has changed since.
Additionally, the challenges many Americans face from a financial standpoint also was glaringly clear.
Something needed to be done…and still does.
Savings Beagle is more than a money-saving deal site.
Its overall goal is to help develop a better understanding of financial matters (both personal and government) and move the needle toward individual financial responsibility so that everyone can be less dependent on government and its programs.
The way the government is handling its finances, it’s not too far out there to question whether these assistance programs will be available – at least in their current form – in the not too distant future.
Let Your Voice be Heard
As someone who handled constituent contacts on a variety of matters, your call, email, or letter on an issue can make a difference. The larger the number of contacts, though, the more meaningful the position being requested…so enlist your friends, neighbors, family and others to make contact as well.
And, lend your support to an organization working hard to hold Congress and our government to account when it comes to financial matters, the Committee for a Responsible Federal Budget.
Congress is currently working on two pieces of legislation – a traditional infrastructure bill and a “social” infrastructure bill – that will total almost $4.5 trillion dollars. While legislators say these amounts will be paid for via tax increases and other revenue-generating means, that’s not entirely true.
A large portion, should both bills be passed in the current amounts, will be debt, added to America’s already enormous $28 trillion debt tally.
And, as mentioned earlier, not one penny of this spending has been discussed for fortifying the already existing and much-needed Social Security and Medicare/Medicaid programs.
At the very least, our elected officials should focus their efforts on ensuring current social programs can do what they promise for the long term before creating new, extremely costly programs that are only partially funded.
Contact your federal elected officials and let them know it’s past time to fix America’s current programs.
Then, maybe, new programs such as the ones many Democrats are in a rush to create can be considered should the real funding numbers make them possible.
