Every year, the chief actuary of the Social Security Administration (SSA) reports to Congress on how many years the program has left in the Social Security Trust Fund to fully meet the obligations of current and future beneficiaries. Last year, that number increased by a year as the economy and jobs grew under the leadership of President Joe Biden.
This year, the system lost ground – going from 2036 to 2033. The anticipated shortfall drew closer due to several Administration and Congressional actions that reduce expected revenue streams into the Trust – tariffs and inflationary trends threatening recession, global uncertainty and volatility, reductions in workforce, and fiscal policies that could lead to higher interest rates.
There are steps Congress and the President can take to secure the system for current and future generations. But these steps need to be taken ASAP. Attacks on the SSA workforce and the degradation of services to beneficiaries merely create confusion and distract from a discussion about solutions.
Here are some key things to understand.
- Social Security cannot and will not run out of money. As long as there are workers paying into the system, Social Security will pay out benefits. The Social Security Trust Fund is a separate fund established in the early 1980s to accommodate the demographic bulge known as the Baby Boom, the large generation born between 1946 and 1964. In fact, the Trust Fund is supposed to run out of money! But not before the Baby Boomers have largely passed, around 2045.
- In the early 1980s, planners did not anticipate the unprecedented and dramatic redistribution of wealth from low and middle-income workers to the top 5%. Before the 1980s, the earnings of the middle class grew in tandem with productivity growth. That ended with Reaganomics (aka “trickle-down theory”) and the economic doctrines promoted by Milton Friedman. Workers’ income stagnated, and the trust fund became unable to keep pace despite the growing economy. This led to the current situation of the Trust Fund facing depletion 10-12 years earlier than intended.
- There is a fix! Upper-income earners have been exempted from paying into the system. Currently, Social Security taxes are not taken out of earnings above $176,000/year. Raising the threshold so that all income levels pay their fair share into the system would secure the Trust and make a long overdue increase in benefits possible.
- Social Security can and should be there for coming generations. Removing the upper income cap would not raise taxes on the bottom 92% of workers and would not cut benefits. It fixes the problem for at least 75 years and would enable everyone receiving benefits to receive significant cost-of-living increases, which are desperately needed in this inflationary environment.
Social Security provides benefits to over 250,000 Montanans: children, seniors, and persons with disabilities. It lifted 66,000 Montana seniors out of poverty in 2023. In addition, it is the primary life insurance coverage protecting 98% of Montana children. Social Security dollars are spent in Main Street businesses that supply everything from groceries to hardware. Most of us rely on it, directly or indirectly.
Citizens must insist that our Congressional representatives do their jobs.
Congress can begin by rebuilding the beleaguered Social Security workforce which has been shredded by layoffs, slashed budgets, closed offices, and forced retirements. They can push back on the Trump Administration’s DOGE-planned cuts to cripple services to beneficiaries with even more staff cuts, forced retirements and local office closures. They can stop artificial intelligence entrepreneurs from invading our personal information and bulldozing through decades of strict oversight and restricted access, to play around in our most personal data held in strict confidentiality within the SSA.
And before giving away $4-5 trillion to billionaires, Congress must first and foremost fully fund the Social Security Trust Fund, keeping the promises made by 90 years of Congresses and Presidents who have defended this vital economic insurance policy supported by the overwhelming majority of Americans.
Margie MacDonald served 12 years in the Montana Legislature. A lifelong Montanan, she lives in Billings. Currently, she is on the board of Big Sky 55+ in Helena as an advocate for policies that bring people together to find solutions that make life better for Montanans of all ages.