So­cial Se­cu­rity re­form halts after Trump’s hands-off vow

The Washington Times Weekly - - Politics - BY S.A. MILLER

As a can­di­date, Don­ald Trump bucked con­ser­va­tive or­tho­doxy and many in the Repub­li­can lead­er­ship with a sweep­ing promise to de­fend So­cial Se­cu­rity, but his hands-off pol­icy as pres­i­dent isn’t break­ing the par­ti­san stand­off that likely dooms ef­forts to ad­dress the com­ing fi­nan­cial cri­sis in Amer­ica’s most pop­u­lar safety net pro­gram.

Mr. Trump’s vow not to touch So­cial Se­cu­rity — not that he wouldn’t touch the “third rail” of U.S. pol­i­tics but that he wouldn’t en­dorse Repub­li­can plans to dra­mat­i­cally over­haul the re­tire­ment pro­gram — helped re­as­sure blue-col­lar and other Demo­cratic vot­ers who crossed party lines in Novem­ber to put him in the White House.

“I’m not go­ing to cut So­cial Se­cu­rity like ev­ery other Repub­li­can, and I’m not go­ing to cut Medi­care or Med­i­caid,” he said dur­ing the cam­paign. “Ev­ery other Repub­li­can is go­ing to cut, and even if they wouldn’t, they don’t know what to do be­cause they don’t know where the money is. I do.”

But his ar­rival at the White House has not spurred any vis­i­ble ac­tiv­ity in Wash­ing­ton on a bi­par­ti­san plan to ad­dress So­cial Se­cu­rity’s fi­nan­cial short­com­ings. The pro­gram hur­tles to­ward a short­fall that, un­less Congress acts, will re­sult in an au­to­matic ben­e­fit cut of about 21 per­cent for work­ers now in their 40s and 50s when they reach re­tire­ment age.

The So­cial Se­cu­rity board of trustees’ an­nual re­port last year pro­jected that the ris­ing costs of the Old Age, Sur­vivors and Dis­abil­ity In­sur­ance pro­grams would de­plete the trust funds by 2034, leav­ing only enough from ded­i­cated pay­roll taxes and tax­a­tion of So­cial Se­cu­rity ben­e­fits to pay 79 per­cent of the promised ben­e­fits through 2090.

The short­fall is the re­sult of an ag­ing U.S. pop­u­la­tion, re­cip­i­ents liv­ing longer on av­er­age and the de­clin­ing U.S. birthrate. With women giv­ing birth on av­er­age to two chil­dren in­stead of three, the num­ber of fu­ture work­ers to sup­port re­tirees is re­duced by a third by 2034.

Now Mr. Trump’s prom­ises from the cam­paign trail are get­ting in the way of real so­lu­tions, an­a­lysts say.

“The pres­i­dent cer­tainly has made it more dif­fi­cult to pass fixes to So­cial Se­cu­rity given the dire straits it is in,” said Repub­li­can Party strate­gist Ford O’Con­nor. “The only way you are go­ing to get fixes to So­cial Se­cu­rity is if Don­ald Trump leads the charge.”

There is no sign that Repub­li­cans and Democrats on Capi­tol Hill are talk­ing com­pro­mise, de­spite a range of po­ten­tial re­forms that could avoid deep ben­e­fit cuts down the road.

The trustees re­port, for in­stance, cal­cu­lated that an in­crease in the pay­roll tax by 2.58 per­cent to 14.98 per­cent, split evenly be­tween work­ers and em­ploy­ers, would keep the pro­gram sol­vent for 75 years.

Work­ers and em­ploy­ers cur­rently pay 6.2 per­cent in So­cial Se­cu­rity with­hold­ing tax and would pay 7.49 per­cent each un­der the 75-year plan. That would be in ad­di­tion to the 1.45 per­cent pay­roll tax that em­ploy­ees and em­ploy­ers pay for Medi­care.

Rais­ing the with­hold­ing tax is a non­starter for Repub­li­cans and ad­vo­cates for work­ing-class fam­i­lies, who say it would be dev­as­tat­ing to Amer­i­cans liv­ing pay­check to pay­check.

Sen. Bernard San­ders, the Ver­mont so­cial­ist who al­most suc­ceeded with a run for the 2016 Demo­cratic pres­i­den­tial nom­i­na­tion, has pro­posed in­creas­ing ben­e­fits by im­pos­ing pay­roll taxes on in­comes above $250,000. The cur­rent rules tax earn­ings up to $127,200.

An­other op­tion — a truly hands-off so­lu­tion — would re­quire Mr. Trump to suc­ceed with his eco­nomic agenda and push growth to 3 per­cent or higher.

“He wants to pro­tect, pre­serve and save So­cial Se­cu­rity. But you know what the best way to do it is: eco­nomic growth,” Repub­li­can poll­ster and strate­gist Jim McLaugh­lin said.

“The big prob­lems we’ve had in all the en­ti­tle­ment pro­grams right now, whether it’s Medi­care, So­cial Se­cu­rity or even some­thing like Med­i­caid, we’ve had no eco­nomic growth for more than a decade,” he said. “If you cre­ate eco­nomic growth, you can do things to shore up So­cial Se­cu­rity and Medi­care.”

In­deed, the trustees pro­jected that with eco­nomic growth near 2 per­cent a year and the un­em­ploy­ment rate at 4.5 per­cent, there would never be a short­fall. The an­nual eco­nomic growth rate in the U.S. has av­er­aged less than 2 per­cent since 2001.

Repub­li­can plan

A month after Mr. Trump’s elec­tion, Rep. Sam John­son, the Texas Repub­li­can who chairs the House Ways and Means sub­com­mit­tee on So­cial Se­cu­rity, in­tro­duced a re­form plan that in­cluded tax in­cen­tives to keep work­ers on the job into old age and a hike of the full re­tire­ment age — now pegged to rise to 67 by 2022 — to age 69 by 2030.

Mr. Trump’s crit­ics slammed him for not speak­ing out against the pro­posal, dubbed the So­cial Se­cu­rity Re­form Act.

Mr. John­son said he re­mains com­mit­ted to find­ing a fix.

“Wash­ing­ton can­not ig­nore the fact that So­cial Se­cu­rity has se­ri­ous fi­nan­cial chal­lenges, and the longer we wait to ad­dress these chal­lenges, the harder it will be. I’m go­ing to con­tinue to make the case to per­ma­nently save So­cial Se­cu­rity so our chil­dren and grand­chil­dren can count on the pro­gram in the fu­ture just as our se­niors and in­di­vid­u­als with dis­abil­i­ties do to­day,” he told The Wash­ing­ton Times.

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