There's arguably no program in the U.S. more important than Social Security when it comes to the financial well-being of retirees. More than 60% lean on their monthly stipend for at least half of their income, with about a third reliant on Social Security for at least 90% of what they bring home each month. Without this critical program, millions of seniors would probably be struggling to make ends meet.
But Social Security itself isn't exactly on solid footing. The 2017 report from the Social Security Board of Trustees estimates that by 2022 the program will begin paying out more in benefits than it's generating in revenue. This is a result of baby boomers who are leaving the workforce and pushing the worker-to-beneficiary ratio lower. It's also happening because of lengthening life expectancies. By 2034, the program's $3 trillion in asset reserves is forecast to be completely gone. Should Congress fail to stem the program's seemingly imminent decline, an across-the-board cut of up to 23% on current and future retirees' benefits may be needed to sustain payouts through 2091.
Most Americans aren't OK with the idea of cutting Social Security benefits. In fact, a Gallup poll in the summer of 2015 found that 51% of those surveyed preferred tax increases, compared with 37% who were OK with curbing benefits. But Republicans just might choose the path least traveled.
Could the GOP cut Social Security's funding?
There are two ways of approaching cuts to Social Security: direct and indirect. A direct cut would take funds directly from the program, whereas indirect cuts find ways to reduce the program's costs over the long term through subtle changes.
Believe it or not, we've witnessed GOP proposals recently that have called for direct cuts to Social Security, although they didn't have much momentum. For example, among the proposals unveiled in President Trump's 2018 federal budget in May was a $72 billion cut to Social Security's Disability Income (SSDI) program over the next 10 years. Though Budget Director Mick Mulvaney attempted to justify the president's proposed inclusion of a cut to SSDI on the grounds that most folks correlate retirement benefits to Social Security and not SSDI, it simply didn't fly.
But Social Security itself isn't exactly on solid footing. The 2017 report from the Social Security Board of Trustees estimates that by 2022 the program will begin paying out more in benefits than it's generating in revenue. This is a result of baby boomers who are leaving the workforce and pushing the worker-to-beneficiary ratio lower. It's also happening because of lengthening life expectancies. By 2034, the program's $3 trillion in asset reserves is forecast to be completely gone. Should Congress fail to stem the program's seemingly imminent decline, an across-the-board cut of up to 23% on current and future retirees' benefits may be needed to sustain payouts through 2091.
Most Americans aren't OK with the idea of cutting Social Security benefits. In fact, a Gallup poll in the summer of 2015 found that 51% of those surveyed preferred tax increases, compared with 37% who were OK with curbing benefits. But Republicans just might choose the path least traveled.
Could the GOP cut Social Security's funding?
There are two ways of approaching cuts to Social Security: direct and indirect. A direct cut would take funds directly from the program, whereas indirect cuts find ways to reduce the program's costs over the long term through subtle changes.
Believe it or not, we've witnessed GOP proposals recently that have called for direct cuts to Social Security, although they didn't have much momentum. For example, among the proposals unveiled in President Trump's 2018 federal budget in May was a $72 billion cut to Social Security's Disability Income (SSDI) program over the next 10 years. Though Budget Director Mick Mulvaney attempted to justify the president's proposed inclusion of a cut to SSDI on the grounds that most folks correlate retirement benefits to Social Security and not SSDI, it simply didn't fly.
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