In a recent op-ed titled “We have a solution to looming Social Security shortfall,” Utah state Sen. Todd Weiler states the Social Security Trust Fund (SSTF) will be “insolvent within the next decade” requiring a reduction of 23% in benefits. His solutions to the problem: (1) Congress needs to be proactive; and (2) Congress must create a process for reviewing mandatory spending.
Somehow, I fail to understand how these suggestions “solve the problem.”
Congress has several processes for reviewing mandatory spending, including the various appropriation committees and its ability to refuse to increase the self-imposed debt ceiling.
There are many private and government studies about solving the Social Security (SS) problem. We don’t need another study. There are several realistic solutions: First, the government could refund to the SSTF the interest it failed to pay when it borrowed from the SSTF at below market rates. Repay the difference had the government paid market rates. Second, remove the cap (currently $97,500) on earned income. Third, tax unearned income. (Too many high income individuals take their salaries in various ways to avoid paying ordinary individual taxes and instead take their “salaries” in the form of capital gains.) Finally, use general revenue funds to fund SS benefits.
Reducing SS benefits is not a good solution. For individuals currently receiving SS benefits, the average SS monthly payment in 2023 is $1,693.88. This is an average and many individuals do not receive even this amount. The maximum benefit for individuals age 67 retiring in 2023 will be about $3,627. For most individuals, SS benefits are their primary, if not only, source of income.
Reducing SS benefits will increase poverty in America. An increase in poverty will increase the demand of government services in other programs, such as food stamps and low income housing. The American economy is consumer driven. SS beneficiaries spend a greater percentage of their income for goods and services than higher income individuals. Reducing their spending will reduce consumption. Keeping SS payments up benefits the economy.
Michael McCoy, Cottonwood Heights
