OPINION | Social Security: What Will Its Future Be?

by Robby Stern

With every paycheck, we all contribute to Social Security, and so do our employers. Then, when we reach retirement age — or if we incur a disability, or a breadwinner dies — we are protected by modest but dependable monthly benefits. Nearly all of us are covered because nearly all of us contribute.

In the 9th Congressional District, 109,486 individuals received Social Security benefits in December 2023. The total monthly amount of dollars received by residents in the district was $207,011. The annual amount of Social Security benefits for 2023 in the district was approximately $2,484,000. These dollars are vital to the lives of many of our friends and neighbors and businesses in our communities.

We hear stories about the future of Social Security. Actuaries tell us Social Security will be able to pay full benefits through 2025 and then, unless a change is made, benefits will decrease by 17%.

For the vast majority of us, we need benefits to increase. As a result of growing income inequality in our country and the increase in the cost of vital human needs, like housing, food, health care, etc., more and more people, including Social Security beneficiaries, are finding it a strain or nearly impossible to afford the cost of living. The fight over the future of Social Security is vital to all of our lives, whether we now receive Social Security benefits or look forward to receiving the benefits in the future.

It is a political battle. There is approximately $3 trillion in the Social Security Trust Fund. Wall Street has wanted to get its hands on Trust Fund dollars for many decades. At the present time, its efforts to privatize Social Security have failed. Trust Fund dollars are invested in U.S. government bonds, the most conservative and safest investment that can be made. The Trust Fund continues to receive interest payments from these bonds, which helps extend the period that full benefits can be paid.

Not all of us contribute equally. In 2024, Social Security taxes are collected on the first $168,600 of earnings each year. That means high earners — like CEOs and Wall Street executives — get a lower tax rate on their income than all the rest of us. That tax ceiling — known as the "cap" — is arbitrary and unfair. If we simply "Scrap the Cap" so Social Security taxes were paid on all earnings, then high earners would pay their fair share — and that would enable us to strengthen Social Security benefits for future generations.

If high-income earners paid at the same tax rate as everyone else, Social Security's long-term finances would improve and we could increase benefits — helping to keep more seniors, children, disabled people, and the families of American workers out of poverty. This simple solution could improve benefits for present and future generations.

Charts courtesy of Puget Sound Advocates for Retirement Action (PSARA).

The majority of Congressional Democrats support some version of eliminating or adjusting the cap so high-income earners pay at the same tax rate as the vast majority of workers. The Republicans have a different perspective.

On Jan. 18, 2024, the House Budget Committee, under Republican leadership, passed the Fiscal Commission Act of 2023, H.R. 5779, to create a bipartisan fiscal commission. The legislation can be brought before the House at any time. President Joe Biden referred to the proposed commission as a "death panel for Social Security and Medicare."

The commission would meet in secret (Social Security is very popular across party lines, and there is fear of political repercussions), and if a majority of the voting members of the commission agreed on a recommendation, it would immediately be transmitted to the House for a fast-track vote with very limited debate. A large majority of Democrats (but not all Democrats in Congress) oppose the creation of the commission. Republicans appear to be united in support. Rep. Adam Smith did not sign the letter opposing the fiscal commission.

Some of the Republican proposals include raising the retirement age to 70 or higher; using a cost-of-living adjustment that would decrease the annual cost of living increases; turning Social Security into a needs-based program rather than a social insurance program from which we all benefit; and privatizing Social Security so some portion of the payroll deduction would be invested on Wall Street.

At the same time, Republicans are making deep cuts to the staffing of Social Security. This is causing terrible delays in services and great hardship for beneficiaries and demoralization of staff. In many ways, it is death by a thousand cuts. The cost of administration does not impact funding for other vital programs. All administrative funding is allocated from the Social Security Trust Fund.

Prior to President Franklin D. Roosevelt signing the Social Security Act on Aug. 14, 1935, one in two seniors lived in poverty. It was far from perfect. There were categories of work that were excluded from coverage in the Social Security Act — specifically domestic workers and farmworkers. These categories of work included a high percentage of African American, People of Color, and women workers. The exclusion was eliminated in 1950, when President Harry S. Truman signed the Social Security Act Amendments.

There is more work to be done. Given the high level of income inequality in our country, and the fact that half of older adults have less than $29,740 in income, we need to expand, not cut, Social Security benefits. This is a political fight. All generations have an interest in assuring that Social Security is a program that not only is sustained but also expands to meet the needs of present and future generations. All of us hope to live our lives with dignity, respect, and economic security. Join the fight.

(If you would like to view a rap video about "Scrapping the Cap," go to the Puget Sound Advocates for Retirement Action website and click on "Want to Save Social Security, Scrap the Cap.")

The South Seattle Emerald is committed to holding space for a variety of viewpoints within our community, with the understanding that differing perspectives do not negate mutual respect amongst community members.

The opinions, beliefs, and viewpoints expressed by the contributors on this website do not necessarily reflect the opinions, beliefs, and viewpoints of the Emerald or official policies of the Emerald.

Robby Stern is the president of the PSARA Education Fund, executive board member of Puget Sound Advocates for Retirement Action (PSARA), and chairs the Social Security Works WA Coalition. He lives in a three-generation household in the 37th Legislative District.

📸 Featured Image: Photo via MargJohnsonVA/Shutterstock.com