Title: Decoding Donald Trump and Joe Biden's Social Security Plans: A Raw Perspective
Over the past 23 years, Gallup's surveys of retirees have consistently shown that Social Security checks serve as either a "major" or "minor" source of income for an astonishing 90% of respondents, with 88% expressing this in 2024 alone. This stark reality puts a twist on the concerning news that Social Security faces trouble.
Although Solvency is not an immediate threat, the prospect of substantial benefit reductions in the near future is a genuine concern. This looming issue falls on the shoulders of the President to address – be it Donald Trump or Joe Biden, dependent on the outcome of the election.
The looming shadow of potential benefit cuts
For over four decades, the Social Security Board of Trustees Report has issued warnings about long-term revenue collection inadequacy in relation to outlays. In 2024, this forecasted deficit stands at an alarming $23.2 trillion.
Furthermore, the Old-Age and Survivors Insurance Trust Fund (OASI) is projected to exhaust its reserve assets by 2033, prompting the possibility of sweeping benefit reductions of up to 21% to avert any further cuts through 2098.
Though blames are often cast on Congressional theft and undocumented workers, the root causes of Social Security's financial woes stem from demographic shifts. Specifically, a significant decrease in net legal migration since 1998, a historic low U.S. birth rate, and rising income inequality have contributed to a strained worker-to-beneficiary ratio.
Candidates' proposals fall short
Both Donald Trump and Joe Biden have fallible plans to tackle Social Security's weakened financial foundation.
To begin, Donald Trump, who has yet to release an official plan, has repeatedly emphasized that Social Security should remain untouched. While a hands-off approach might not cost Trump any voters, it fails to address the growing long-term funding deficit.
Should Trump dip into entitlement reductions, such as gradually increasing the full retirement age, his proposed solutions are still insufficient in addressing the impending OASI asset reserve exhaustion in 2033.
Joe Biden, on the other hand, wants to raise revenues by taxing the rich and transferring some of this additional income to underprivileged low-earners and elderly beneficiaries. While this immediate revenue boost of Biden's four-point plan does extend the solvency of the trust funds by five years, it fails to remove imminent benefit cuts from the conversation.
Viewing the situation through a more nuanced lens, Biden's plan might not fully address the lurking concerns of retirees.
No clear vision to resolve long-term funding shortfall
The disturbing reality for retirees is that neither Donald Trump nor Joe Biden provides a comprehensive solution to Social Security's funding deficit. Striking a middle-ground – like the bipartisan approach in 1983, which combined proposals from both parties, including tax increases, benefit adjustments, and a gradual increase in the full retirement age – might be the key to finding a long-term fix.
For now, retirees must brace themselves for the possibility of benefit cuts, regardless of who wins in November.
Despite the candidates' proposals, the looming shadow of potential benefit cuts for retirees remains a significant concern. Regardless of whether it's Donald Trump or Joe Biden in office, the Old-Age and Survivors Insurance Trust Fund (OASI) is projected to exhaust its reserves by 2033, leading to potential benefit reductions of up to 21%. This financing predicament highlights the need for a comprehensive solution that addresses the long-term funding shortfall and alleviates the worry for retirees reliant on Social Security checks for their income.