The C-SPAN video from 1995 is grainy, but the audio is clear: Senator Joe Biden is heard bragging about his support for freezing spending on Social Security as part of broader deficit reduction legislation.
“I’m up for re-election this year, and I’m going to remind everybody what I did, at home, which is going to cost me politically. When I argued that we should freeze federal spending, I meant Social Security as well. I meant Medicare and Medicaid. I meant veterans benefits — I meant every single solitary thing in the government,” Mr. Biden says in the video. “And I not only tried it once, I tried it twice, I tried it a third time and I tried it a fourth time.”
The footage is a centerpiece of an attack on Mr. Biden launched last month in the run-up to the Iowa caucuses by his rival for the 2020 Democratic presidential nomination, Senator Bernie Sanders. Mr. Biden has pushed back, and a New York Times review of his record on Social Security over the course of his long Senate career reveals votes in support of protecting benefits as well as cutting them.
The Biden-Sanders dust-up underscores the recent transformation of political debate on Social Security. As recently as 2010, benefit cuts were widely embraced by Mr. Biden and many other centrist Democrats as part of broader bipartisan deals to repair Social Security’s finances or to reduce the federal deficit, which never reached fruition. Progressives fought the benefit-cutting. And in 2013, they began pushing the idea that benefits should be expanded.
“It was difficult enough just to fight the benefit cuts at the time,” recalls Nancy Altman, the president of Social Security Works, one of the advocacy groups fighting for expansion. “But the end of the ‘grand bargain’ talks opened the door for the focus we thought was necessary — the retirement income crisis and what we thought was the correct policy response — expansion of Social Security.”
Since then, the Democratic Party has taken a decisive left turn on Social Security: In 2020, none of the 11 Democratic presidential candidates advocate cuts, and most favor expanding benefits.
As a 2020 candidate, Mr. Biden supports expanding benefits, and you won’t find a word about cuts on his website. In fact, nearly all of the Democratic candidates’ proposals are built on fixing Social Security’s projected shortfall with revenue.
Donald J. Trump campaigned in 2016 promising to oppose cuts to retirement benefits, a clear break with his party’s orthodoxy — and he reiterated that pledge in this week’s State of the Union address. But Democrats argue that one recent statement by the president signaled his openness to considering reduction.
No topic is more important than Social Security to the well-being of today’s older voters — and younger workers who will come to rely on the program. Nearly all Americans pay into the program and can expect to receive a benefit. It is the largest retirement income source for a majority of older households.
Just 52 percent of households owned retirement accounts in 2016, according to Federal Reserve data. And at a time when fewer retirees can rely on traditional pensions, Social Security will be the only source of guaranteed lifetime income for most workers. Benefits are adjusted annually for inflation — a unique feature that adds substantially to Social Security’s value.
All of the Democrats’ proposals include a fix for the program’s looming financial shortfall. The combined trust funds for Social Security’s retirement and disability programs are on course to be depleted in 2035; without changes, funding from payroll tax receipts will be sufficient to pay only 80 percent of scheduled benefits.
Mr. Sanders and Senator Elizabeth Warren have been at the forefront of the expansion forces since they mobilized in 2013. Mr. Sanders is the chief sponsor of current Senate expansion legislation, and Ms. Warren has published a detailed Social Security expansion plan as part of her campaign.
A recent review of the candidates’ positions on Social Security by the Center for Retirement Research at Boston College revealed no candidates — from either party — on record supporting benefit cuts. Among the Democrats, several (Mr. Sanders, Ms. Warren and Tulsi Gabbard) back an across-the-board increase in benefits. Ms. Warren, for example, would immediately boost benefits for all by $200 per month.
And four of the Democrats favor shifting to a formula for the annual cost-of-living adjustment all beneficiaries receive that more accurately reflects the inflation experienced by seniors. This would be done by adopting an inflation index known as the CPI-E (the “E” stands for elderly). Social Security’s actuary estimates that the CPI-E would increase retiree benefits by two-tenths of a percentage point annually.
Similar across-the-board increases are proposed in legislation already introduced by Democrats in the House of Representatives. The Social Security 2100 Act is co-sponsored by roughly 90 percent of House Democratic lawmakers, but has not been voted on by the full House.
Nearly all of the candidates support targeted increases aimed at helping the most vulnerable seniors, an approach that aligns with the C.R.R. findings on retirement inequality. “The typical minority household is coming into retirement with nothing — no employer-sponsored retirement plan, or even a house,” says Geoff Sanzenbacher, associate director of research at C.R.R. and a co-author of the study. “When you add in Social Security, things look a whole lot better.”
All of the top-polling candidates support increasing Social Security’s special minimum benefit, which aims to keep very low-income workers out of poverty in retirement. But the benefit has eroded in value over the years in relation to the overall benefit formula. Most candidates propose updating the formula to keep beneficiaries at or above 125 percent of the federal poverty line at retirement age.
Five of the Democrats support increasing Social Security benefits for caregivers, recognizing that caregiving duties can depress benefits by cutting into working hours and wages. This could be achieved by allowing caregivers to exclude some non-working years from the calculation of their benefits; another is to provide a wage credit to caregivers.
Some candidates support raising benefits for surviving spouses. When a spouse dies and benefits stop, the surviving spouse can lose as much as 50 percent of the household’s retirement income. The current survivor benefit is equal to 100 percent of the deceased spouse’s benefit, but that doesn’t help much in cases where both spouses had similar wage histories and benefits.
Ms. Warren, for example, proposes that survivors could receive 75 percent of the household’s combined benefits up to a capped amount, if that amount is higher than the survivor’s own benefit or that of the deceased spouse.
How would Democrats pay for expansion? Most would lift the cap on wages subject to payroll taxes, set this year at $137,700. Three support increasing payroll tax rates for high-income households, and two (Mr. Sanders and Ms. Warren) would bolster the program’s finances by establishing new taxes on investment income for high earners.
Mr. Trump, in his State of the Union address this week, pledged that “we will always protect your Medicare and we will always protect your Social Security. Always.”
But his administration has taken no steps to address the solvency problems of the Social Security Trust Funds. (Medicare’s Hospital Insurance Trust Fund is projected to be insolvent in 2026, three years earlier than the administration’s actuaries projected in 2017.) And Mr. Trump’s latest pledge contradicts comments he made in a CNBC interview at the World Economic Forum in Davos, Switzerland, last month.
Asked if entitlements would “ever be on your plate,” Mr. Trump replied that “at some point they will be.” Democratic candidates and Social Security advocates pointed to the exchange as evidence Mr. Trump would seek cuts to Social Security, and Medicare, in a second term.
White House officials walked back the comment the next day, suggesting that no draconian cuts to Social Security, Medicare or Medicaid were expected in the administration’s upcoming budget, which will be released this month.
The Trump administration has drawn fire for proposing cuts to Social Security’s disability program. Its most recent budget proposed $72 billion in cuts over 10 years to benefits. Another set of administrative changes would make it harder for Americans to qualify and continue to receive benefits.
Republican lawmakers speak often about reining in entitlement spending, but specifics have been absent during the Trump years.
“They are in a nowhere zone on policy,” says Andrew Biggs, resident scholar at the conservative American Enterprise Institute think tank, and a former deputy commissioner of the Social Security Administration during the George W. Bush administration. “In response to Democratic proposals to expand Social Security and raise taxes, Republicans will say, ‘We don’t want to raise taxes, and we don’t want to cut benefits, either’ — as though there are other options.”
How urgent is the problem?
The public already is pessimistic about Social Security’s future. A Pew Research Center study released last March found widespread worry among today’s workers about the program’s future — 83 percent expected benefit cuts by the time they retire, and 42 percent did not expect to receive any benefits in retirement.
The public worry is understandable, but out of proportion, says Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a left-leaning think tank. “The odds that benefits are going to disappear are as close to zero as possible,” he said. “But the continual talk about the financial problems leads people to worry excessively about it.”
Despite public sentiment and trust fund projections, the next president and Congress may not feel pressure to act during the next four years. Much will depend on the balance of control in Congress and the White House.
“The more power Democrats have, the more likely it is that there will be action,” said Ms. Altman of Social Security Works. “If Republicans stay in power, they will try for a bipartisan solution, but Democrats won’t go for it.”
If the problem is not solved before the 2035 depletion date gets near, experts note that odds will favor restoring solvency to the trust funds with new revenue — rather than benefit cuts.
That is because any benefit cuts almost certainly would not be applied retroactively to current beneficiaries, Mr. Van de Water said. “That means the cuts could only apply to new beneficiaries, with the possible exception of a less generous C.O.L.A., which would affect people receiving benefits now and in the future,” he added.
With that constraint, it would be difficult to avoid insolvency relying on benefit cuts, Mr. Van de Water said. New revenue could come from tax increases — or Congress could decide to inject general revenue into the program.
Perhaps the biggest risk of delay is that it fuels public pessimism and worry about Social Security’s future, he said. Still, he adds: “It’s quite feasible that this just gets punted for another four years.”
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