The coming Social Security fight could be 1983 all over again

[HitchHiker71]

What's not sustainable is the merger of corporatism and government, imo. This is our current system which favors large corporations over small businesses because of the concentration of wealth allowing the large companies to lobby for regulations that hamper growth to small business.

Even though the top 10% might be supporting the bottom 90% , the top has the advantages of tax laws to shelter their income with many receiving more government incentives than they pay in taxes.

Bill

Yes, the issue of regulatory capture from corporate lobbying is very real, and a very real problem as a result.

 

[HitchHiker71]

Those plans are underfunded because the governments and unions put less into them than it costs to provide the benefits, exactly the same reason as social security.

And the reason they can put less into them and underfund them, is because of regulatory capture that allows them to do this in the first place.

 

[joestein]

So your answer is we should just keep dumping money into a failing system today, with no end in sight except onerous taxes as the answer? Again, the underlying requirement of ALL pension/redistribution systems is to have significantly more workers than retirees, which is NOT going to be the case due to simple, logical, demographics heading in the wrong direction. Math doesn't lie, demographics is destiny, as the vast majority of economists tell us. You cannot work around it long term. Whatever the ratios are for converting to an actual real personal retirement account based system need to be, that's just mathematics as well, perhaps the age is 50 and over vs 55, that was just an example. The overall point is, the current system is unsustainable, particularly with robotics and automation in mind. It is also essentially an income tax base, it's based on labor, and if 20 years out 50% of the jobs today are gone due to automation, the acceleration of the failure of the current system is going to come even faster. AI is already resulting in layoffs in the tens of thousands in the tech sector now, and we will see other sectors affected as well. The tech sector is busy eating their own dog food now with AI, eliminating jobs now, and is preparing to advise other sectors in how to do the same and adapting their technologies to foster this same outcome. It's already happening, it's a question of when not if. We would be wise to adapt our outdated social safety net systems now, rather than waiting until a crisis point.

I don't disagree with the concept you present of the system failing. The way we handle it now, we come up with least amount of money to bridge. If we divert 2% to private funds - we just need to bridge more money today vs tomorrow.

Personally - they need to adjust FICA or retirement age to get rid of the shortfall or maybe do it enough to create a surplus - which can be used to fund private accounts.

 

[joestein]

Excellent post, and all so very true. We were broke when we got married, and we still live frugally. We eat home all of the time. Rarely do we go out. I like finding ground beef on sale and making a good meatloaf to have the next day as leftovers. We have my stepdad with us for meals while at home. I might be more on the cheap side.

When we are in Orlando, we do eat out every day but we take sandwiches into the park for lunch (and a soda for each of us).

I like to eat out when it involves getting together with friends. But just to eat out vs home - not that interested. Maybe if new restaurants open up - I would be excited about trying - but I feel that most restaurants are mediocre and expensive. If I really want to splurge - I can buy USDA prime filet mignons at food emporium for $15.99/lb. They are great. But I enjoy making tacos or grilling chicken or burgers - just as much as eating out or more in many cases. It is really not so much the money as just have no interest.

Certainly, when traveling we eat out - but at least I am excited to try new places.

 

[easyrider]

I'll be amazed if when I'm allowed to finally draw, it amounts to any more than beer money.

That's what I thought in the 80's, 90's, and 2000's but then SS gave us our statement which showed what we might expect at different ages. Being self employed we tried not to pay in anything more than we had too because we paid the entire 12+% with no employer contributions. Anyway, even with retiring at 56, it looks like a pretty good pop when I do collect which isn't what young me expected.

Bill

 

[Ralph Sir Edward]

In the end, the question is not whether or not we will get the money, the question is what will it buy?

 

[ScoopKona]

In the end, the question is not whether or not we will get the money, the question is what will it buy?

And this is precisely why we chose the retirement we did.

 

[Ubil]

I don't disagree with the concept you present of the system failing. The way we handle it now, we come up with least amount of money to bridge. If we divert 2% to private funds - we just need to bridge more money today vs tomorrow.

Personally - they need to adjust FICA or retirement age to get rid of the shortfall or maybe do it enough to create a surplus - which can be used to fund private accounts.

Compared to Medicare, SS is straightforward to fix. 1. Eliminate max income ($176,100 for 2025) for SS Tax (this is supposed to eliminate about 75% of the shortfall); 2. Keep increasing retirement age by 2 months per year; 3) Means test SS, eg, anyone with income over $nnn,nnn amount per year does not receive SS. This might in fact result in a SS surplus. If that is the case, reduce FICA for low earners or increase the minimum SS payment.

 

[joestein]

And this is precisely why we chose the retirement we did.

Once again.... SS increased based upon inflation. It should keep up.

 

[joestein]

Compared to Medicare, SS is straightforward to fix. 1. Eliminate max income ($176,100 for 2025) for SS Tax (this is supposed to eliminate about 75% of the shortfall); 2. Keep increasing retirement age by 2 months per year; 3) Means test SS, eg, anyone with income over $nnn,nnn amount per year does not receive SS. This might in fact result in a SS surplus. If that is the case, reduce FICA for low earners or increase the minimum SS payment.

Just NO...... SS is already incredibly progressive. I dont care if I have $10 million annual income. If I paid into the system - I expect to be paid like anyone else. Your idea is just more of wealth re-allocation.

The top 10% of income earners already pay 72% of income taxes. How much more are they supposed to pay? You can't have a sustainable society with 10% supporting the rest.

 

[ScoopKona]

Compared to Medicare, SS is straightforward to fix.

1) Won't work. Needed to be implemented more than two decades ago when the policy change would have opened the monetary floodgates, filling the OASDI trust fund.
2) Cruel to anyone who isn't already a geezer.
3) Won't work for the same reason #1 won't work.

1 and 3 will buy us mere months of extra solvency. The "fix Social security by removing the income cap and means testing" ship sailed, empty, in 2000. And then it sank after hitting an iceberg and has never been found.

People act like things can be done, when we have a forty year history of doing nothing at all -- or enacting policy which weakens the system even further. Where is this miracle legislation going to come from? Point me to any path where this happens, instead of just arm-chair economic quarterbacking. My debate position is simple: "Nobody has done Jack [excrement]. We will continue to do Jack [excrement]. Eventually the fund will deplete and 'the fund has depleted' measures kick in." Nobody has to lift a finger for this to happen.

If Social Security was a person, he would be a morbidly-obese, chain-smoking, 75-year old who was just given a stage-four lung and throat cancer diagnosis.

"No problems! I'll just quit smoking and go on a diet. That'll clear it right up."

That's where we are in 2025.

 

[easyrider]

In the end, the question is not whether or not we will get the money, the question is what will it buy?

First class tickets for starters, lol.

Bill

 

[Brett]

1) Won't work. Needed to be implemented more than two decades ago when the policy change would have opened the monetary floodgates, filling the OASDI trust fund.
2) Cruel to anyone who isn't already a geezer.
3) Won't work for the same reason #1 won't work.

1 and 3 will buy us mere months of extra solvency. The "fix Social security by removing the income cap and means testing" ship sailed, empty, in 2000. And then it sank after hitting an iceberg and has never been found.

People act like things can be done, when we have a forty year history of doing nothing at all -- or enacting policy which weakens the system even further. Where is this miracle legislation going to come from? Point me to any path where this happens, instead of just arm-chair economic quarterbacking. My debate position is simple: "Nobody has done Jack [excrement]. We will continue to do Jack [excrement]. Eventually the fund will deplete and 'the fund has depleted' measures kick in." Nobody has to lift a finger for this to happen.

If Social Security was a person, he would be a morbidly-obese, chain-smoking, 75-year old who was just given a stage-four lung and throat cancer diagnosis.

"No problems! I'll just quit smoking and go on a diet. That'll clear it right up."

That's where we are in 2025.

"If Social Security was a person, he would be a morbidly-obese, chain-smoking, 75-year old who was just given a stage-four lung and throat cancer diagnosis."


That social security analogy is funny but just a little too pessimistic
Here's a prediction - within the decade the maximum income subject to SS tax will increase and the full retirement age will be extended to kick the funding can down the road.
Maybe some means testing.
(Gen X won't like it)

 

[HitchHiker71]

I don't disagree with the concept you present of the system failing. The way we handle it now, we come up with least amount of money to bridge. If we divert 2% to private funds - we just need to bridge more money today vs tomorrow.

Personally - they need to adjust FICA or retirement age to get rid of the shortfall or maybe do it enough to create a surplus - which can be used to fund private accounts.

Yes, but the point is, you have less to bridge every month of every year as existing retirees age out of the current system, versus no solution and no end to the bridge if you just keep doubling down on the same system with ever higher taxes on the young to support the old. At some point, the young will revolt, and refuse to pay for a system they won't ever have access to when their time comes. By taking a deconstruct and reconstruct process, the young will be willing to continue to pay into the system because they will see a real benefit tied to the individual as opposed to the murky reality of a massively underfunded pension system whose premise is no longer valid, making that system unsustainable. Even if we have to temporarily pay more tax to fund the transition, it's better than staying with something that just doesn't work long term given the demographic realities in play.

 

[TolmiePeak]

"If Social Security was a person, he would be a morbidly-obese, chain-smoking, 75-year old who was just given a stage-four lung and throat cancer diagnosis."


That social security analogy is funny but just a little too pessimistic
Here's a prediction - within the decade the maximum income subject to SS tax will increase and the full retirement age will be extended to kick the funding can down the road.
Maybe some means testing.
(Gen X won't like it)

And plenty of doctors convincing people it can be cured by taking an aspirin.

 

[ScoopKona]

"If Social Security was a person, he would be a morbidly-obese, chain-smoking, 75-year old who was just given a stage-four lung and throat cancer diagnosis."


That social security analogy is funny but just a little too pessimistic
Here's a prediction - within the decade the maximum income subject to SS tax will increase and the full retirement age will be extended to kick the funding can down the road.
Maybe some means testing.
(Gen X won't like it)

GenX hasn't liked anything previous generations have done in the last 50 years, so no worries there.

And if anything, I'm being charitable about our patient's chances. He will die. There's no treatment plan. And it's going to be really, really excruciating. We're going back to "seniors eating cat food because they can't afford anything else." Why? The "income cap/means testing/raise the age" suggestions won't work today. They needed to happen back before 50 million people went on the OASDI dole.

 

[Brett]

GenX hasn't liked anything previous generations have done in the last 50 years, so no worries there.

And if anything, I'm being charitable about our patient's chances. He will die. There's no treatment plan. And it's going to be really, really excruciating. We're going back to "seniors eating cat food because they can't afford anything else." Why? The "income cap/means testing/raise the age" suggestions won't work today. They needed to happen back before 50 million people went on the OASDI dole.

We will see
(assuming this boomer will still be alive in 10 years

.

But the majority in this forum (including me) are not counting on SS for the majority of their retirement income and consequently will probably not be eating cat food
Maybe our children will be eating cat food in their retirement .......

https://sepwww.stanford.edu/sep/jon/family/jos/onion.html

 

[ScoopKona]

Tick-tock...

https://www.axios.com/2025/07/24/social-security-recipients-benefit-cut

Retirees Face an $18,100 Benefit Cut in 7 Years | Committee for a Responsible Federal Budget

2025-07-24-The Social Security and Medicare trust funds are only a little more than seven years from insolvency, based on

www.crfb.org

Social Security benefits face 24% cut in less than a decade as trust fund dries up, new analysis reveals

Social Security's retirement trust fund is facing insolvency by late 2032, potentially triggering a 24% benefit cut for 62 million retirees if Congress doesn't act, an analysis found.

www.foxbusiness.com

 

[Brett]

Tick-tock...

https://www.axios.com/2025/07/24/social-security-recipients-benefit-cut

Retirees Face an $18,100 Benefit Cut in 7 Years | Committee for a Responsible Federal Budget

2025-07-24-The Social Security and Medicare trust funds are only a little more than seven years from insolvency, based on

www.crfb.org

Social Security benefits face 24% cut in less than a decade as trust fund dries up, new analysis reveals

Social Security's retirement trust fund is facing insolvency by late 2032, potentially triggering a 24% benefit cut for 62 million retirees if Congress doesn't act, an analysis found.

www.foxbusiness.com

No worries citizen

Just this month a bipartisan bill was introduced that will solve the social security funding crisis without cutting benefits or raising taxes

https://www.benzinga.com/personal-f...ting-a-single-benefit-but-will-it-really-work

https://www.wsj.com/opinion/a-risky...3Y5YHSkQv7qzhGu-6viPJbRd_eds6IzJtkMzusiudIw==

 

[MULTIZ321]

Your Social Security Check Might Be a Lot Lower Very Soon—Here’s Why​

Your Social Security Check Might Be a Lot Lower Very Soon—Here’s Why

Your Social Security Check Might Be a Lot Lower Very Soon—Here’s Why

Most retirees rely on this money in their monthly budgets. Find out if you or your loved ones will be impacted.

flip.it

Richard

 

[ScoopKona]

No worries citizen

Just this month a bipartisan bill was introduced that will solve the social security funding crisis without cutting benefits or raising taxes

Loads of plans have been floated. Remember "The Lock Box?"

What's been done? Besides raiding the trust fund to pay for pet projects? Not much.


Let's talk about bills which have actually passed -- instead of flavor-of-the-week vaporware.

 

[isisdave]

IMHO, means testing will result in a plethora of schemes to get around it.

If I were rich, which I'm not, I would entertain some scheme by which I could reduce my SS benefit by diverting some of it to charities or even to the government, if I could choose what to fund ... e.g., cancer research, clean water, the Army Band, but not birthday parades.

 

[ScoopKona]

IMHO, means testing will result in a plethora of schemes to get around it.

I agree. But people wildly overestimate the effect of means-testing and ending the income cap. If these were implemented 30 years ago, they would have been far more effective. The program has been running a deficit for more than 10 years. There aren't enough workers making not enough money paying not enough into the trust fund to keep it solvent.

We're well past the point where the standard cries of "means testing! income cap!" will do anything. If they were implemented tomorrow (fat chance), that would only buy us a few more months of solvency. Everyone points to possible solutions. Nobody can point to solutions that have actually been implemented. "But we could!"

This really is the morbidly-obese chain-smoker getting a stage-four lung cancer diagnosis and demanding, "I'll go on a diet and quit smoking. That'll clear it right up!"

 

[SmithOp]

Check out Dr Ed Weir on YouTube, former manager at SSA. He has very interesting talks on his channel.

I think Skoop nailed it, SS is in a death spiral, circling the drain.

 

[ScoopKona]

SS is in a death spiral, circling the drain.

It's going to be even worse than the government is letting on. The official line is that when the OASDI trust fund depletes, there will be across-the-board cuts in the neighborhood of 30% (Currently projected at 25%. But this number has been increasing for most of my life.)

What's actually going to happen is that everyone under the age of 50 is going to give the program a big, fat, middle finger and move to gig jobs so they can keep more of their money. They're not getting a retirement. Why should anyone else? So I think much bigger cuts are possible. It really depends on how well the government can rein in under-the-table employment. (Currently, almost non-existent enforcement.)