Years ago, before the 2004 Iowa Caucuses, I remember one of the candidates running for president arriving at Tom Harkin’s steak fry fundraiser. There was a mob of news media and party activists surrounding him. As he made his way through the scrum, a TV reporter kept peppering him with questions about what he would do about Social Security.
I recall thinking at the time this was hardly the setting for a substantive policy discussion about Social Security’s fiscal challenges. But now I wonder if that reporter wasn’t right all along. If we shouldn’t be shouting these questions at our political leaders wherever they are and in whatever the setting: In the hallways of the US Capitol. As they make their way through airports. At state fairs. Wherever they show up.
If there’s anything that demands the attention of politicians and the public it’s the sorry fiscal state of the United States of America.
Last week, the total US debt soared past $40 trillion, or 123% of GDP. A different measure, debt held by the public, exceeds $32 trillion.
Either way, this is appalling. And the bond market is signaling it has little confidence our political leaders will do anything about it.
Chuck Grassley is a good example why the market may be right. Iowa’s long-serving senator used the occasion of surpassing $40 trillion last week to attack “unaffordable socialist policies” and call for “fiscal discipline.”
This is rich.
Grassley was elected to Congress in 1974 when overall debt was about $16,000 per person (in 2026 dollars). Now, it’s about $117,000, according to CNN. And for much of this time, Grassley has sat on the Senate Finance Committee. He’s even been chairman. And yet, it’s socialists we should be afraid of?
I don’t mean to make this about assigning blame. I believe Republicans are most at fault, including Grassley. They continuously push tax cuts that shovel money toward the wealthy, but rarely have they had the courage to enact real spending restraint. (An example: Donald Trump wants to raise defense spending to $1.5 trillion a year, a record-breaking increase that will easily wipe out the savings from their planned cuts to healthcare for the poor and disabled on the Medicaid program.)
That said, in the main, I think this has been a bipartisan failure. Both parties have watched this problem fester for decades and they have failed to come up with solutions.
Regardless of how we got here, though, I believe the only realistic solution will be a deal between the parties that raises revenues and reduces future expenditures.
The same could be said about Social Security. I’m 64 years old, and in a few years, I’ll be eligible for full benefits. But in 2032, if nothing is done, I’ll see a 22% cut in benefits. So will millions of other Americans. I’m not eager to see this happen. I already watched, along with millions of others, as Congress voted in 1983 to gradually raise our retirement age from 65 to 67.
Still, the train is barreling down the tracks, and without a compromise we’ll all get run over.
I am fortunate. I think I can weather a cut. But I worry about those who can’t. Social Security is the only source of income for about a quarter of retirees, or 16 million people as of 2022. For more than 4 out of 10 retirees, the program makes up three-quarters of their income. And what will happen to young people down the road if this isn’t fixed soon?
I believe the most credible solutions involve both raising revenues, such as increasing the cap, currently at $184,500, below which payroll taxes are levied and reducing future expenses. Of the latter, raising the retirement age is a prominent option. So is limiting benefits to wealthier individuals.
As much as I don’t like the idea of raising the retirement age, like with the debt, I fear a painful compromise will be the only feasible political solution.
Of course, if the federal government had acted sooner, perhaps the pain could have been lessened. But that’s really the problem, isn’t it? Congress and the White House haven’t cared enough to act.
Maybe that reporter at the Harkin steak fry had it right all those years ago. Maybe we should all have been shouting at politicians wherever they went back then, no matter the setting.
Maybe we should all be shouting at them now.
I doubt this will happen. Some recent surveys show high levels of concern about our fiscal condition. But my observation is those concerns play only a small role in determining congressional and presidential elections. So, it’s probably a good bet that Congress won’t lead us out of this mess. Its members will play it safe, so they can preserve their jobs.
As a result, I suspect the bond market is probably right. Nothing will get done until we reach the inevitable crisis. Unfortunately, all of our shouting then won’t do us much good.
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The ultra-wealthy are flying high and worry-free, having lifted themselves up by our bootstraps.
Social security will be around for another 75 years. First, you remove the Cap, and tax income up to the first $10million--including Capital Gains. Second, you raise the Minimum wage to $20.00 an hour---you make more thus you pay more into SS. Third, the wealthy and Corporations should be taxed at a rate around 50%--Reagan lowered the corporate rate to 27% in 1981. Fourth, Corporate welfare should be cut by 100%---why are we cutting taxes for the wealthy corporations, Fifth, cut DEFENSE spending---we will not be destroyed by some other country---we are destroying our country by catering to the wealthy--who will fail to be held ACCOUNTABLE.