With the November presidential election just several short months away, talks are heating up regarding future proposals on federal policies like Social Security.
In his State of the Union speech earlier in March, President Joe Biden warned voters that congressional Republicans would slash Social Security in order to cut taxes for wealthy Americans, while the Republican Senate Committee (RSC) in an annual budget proposal promised it would not cut or delay benefits for seniors in or near retirement. The Committee’s proposal did however call for increases in the full retirement age (FRA) for future retirees.
“The RSC Budget & Spending Task Force cannot be more clear: we will not now or ever support cutting or delaying retirement benefits for any senior in or near retirement,” Republican members wrote in the proposal. “With insolvency approaching in the 10-year budget window, Congress has a moral and practical obligation to address the problems with Social Security.”
House Republicans argued that President Biden’s current proposal would take no action in preventing future Social Security insolvency, noting that the budget did nothing in preventing “23 percent across-the-board cuts in benefits that will hit every Social Security recipient in 2033.”
In a White House statement following the RSC’s budget proposal release, Biden denounced the budget, adding that it would “cut Medicare, Social Security, and the Affordable Care Act … all while forcing tax giveaways for the very rich onto the country.”
“Their plan would even raise the Social Security retirement age,” the White House commented in its statement.
While Biden said his latest budget for Social Security would incorporate additional taxes to wealthy Americans and big corporations, he has not further specified how he would fund the federal agency. However, recent Democratic proposals offer suggestions on how the president would address the problem.
For example, Rep. John Larson’s (D-CT) Social Security 2100 Act and Sen. Sheldon Whitehouse’s (D-RI) Medicare and Social Security Fair Share Act would require taxpayers who earn more than $400,000 to contribute to the program. Under current law, workers stop paying into Social Security when they reach an income cap, of $168,600 in 2024. This applies to all workers, meaning the highest earners stop contributing to the program when they’ve reached that ceiling.
The $400,000 threshold is important to the Biden Administration because of his repeated pledges to never raise taxes on anyone earning less than $400,000.
Meanwhile, former President and Republican candidate Donald Trump has expressed scattered views on the issue, at times saying he is open to Social Security cuts and then backpedaling at other points.
In an interview with CNBC a few weeks ago, Trump suggested he was receptive to Social Security cuts, adding that “there is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and bad management of entitlements.”
The statement prompted quick backlash from Biden’s campaign, who denounced the statement by tweeting the response on X: “Not on my watch.”
Trump later retracted his quote in an interview with conservative website Breitbart, adding that he would “never do anything that will jeopardize or hurt Social Security or Medicare.”
It’s not the first time the former president has meandered on Social Security policies. In 2020, Trump proposed a budget as president that would have slashed Social Security funds by an estimated $71 billion. When pressed on entitlements during a 2020 town hall with Fox News, Trump responded that there would be Social Security cuts. “Oh, we’ll be cutting, but we’re also going to have growth like you’ve never had before,” he said during the interview.
Now running for his second term, Trump has not released his own plan on Social Security insolvency or laid out any proposal strategies but instead, has pointed blame to undocumented workers. At a recent campaign rally in Vandalia, Ohio, Trump stated that a higher flow of migrant workers entering the U.S. would jeopardize Social Security.
“Your Social Security will be destroyed by the people coming. There’s too many of them. It’s not sustainable,” he said during the rally.
The statements puzzled some, as undocumented workers are ineligible for Social Security retirement benefits. Undocumented workers will generally use a Taxpayer Identification Number (ITIN) instead of a Social Security number to pay payroll taxes.
Only some who use a fake Social Security number to pay taxes could receive the benefits, but past findings from the Social Security Administration have shown that undocumented workers have paid more money into the SSA than they have received. A 2013 report from the SSA found that while $1 billion in benefits were paid out to undocumented immigrants in 2010, these workers had contributed $13 billion in payroll taxes during the same period.
“Thus, we estimate that earnings by unauthorized immigrants result in a net positive effect on Social Security financial status generally, and that this effect contributed roughly $12 billion to the cash flow of the program for 2010,” wrote SSA chief actuary Stephen Goss at the time. “We estimate that future years will experience a continuation of this positive impact on the trust funds.”
SEE ALSO:
- Small Business Owners Prefer Trump Win to Boost Prospects, Poll Finds
- Biden Floats Billionaire Tax, Vows to ‘Protect’ Social Security
- GOP Committee Proposes Increasing Social Security Retirement Age for Future Generations
- 3 Proposals to ‘Fix’ Social Security
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
