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Kansas Pols Have Competing Proposals for Fixing Social Security

Despite the recent announcement that Social Security benefits will increase next year, the federal program is likely to become insolvent by 2035. Congress has done little so far, but some candidates hope to change that.

(TNS) — Retirees got a raise on their Social Security benefits Thursday, Oct. 13, when the Biden Administration announced a record cost of living adjustment to match for inflation, but looming in the background is a potential cut to those benefits in the next decade.

Amanda Adkins, the Republican candidate in Kansas’ 3rd Congressional District, says fixing the country’s Social Security program is one of her top priorities if she gets elected. The issues page on her campaign website talks about her desire to reform the program. She’s brought up how the Reagan administration cut a deal with Congress to tax some Security Benefits and slowly raise the retirement age as an example of the bipartisanship she wants to see in Washington.

As Adkins and Rep. Sharice Davids, her Democratic opponent, have argued that they are the right person to represent the 3rd District in Congress, they’ve said they are focused on policy more than politics, that they want to put aside the divisive rhetoric that’s pervasive in the House.

Social Security is one of the country’s most popular, and relied upon, federal programs. There are currently more than 65 million Social Security recipients — between retired workers, disabled workers and their spouses and dependents — and more than 178 million workers pay into the program. In April, 55 percent of retirees said that Social Security was a major source of their income, according to Gallup.

“Social Security plays a fundamentally important role in our society, because there are so many people who are not able to save adequately for their retirement, or who, as FDR originally put it, sort of the vicissitudes of life get in the way,” said Shai Akabas, the director of economic policy for the Bipartisan Policy Center. “And Social Security is what protects those people from old age poverty.”

But by 2035, the program is likely to become insolvent. That means beneficiaries would see around a 20 percent cut to their benefits, likely driving more senior citizens into poverty.

Congress has done little to act. While they have known about the problems for decades, the potential solutions are politically unpopular. A majority of Americans don’t think they’ll be able to collect Social Security when they retire, according to a Gallup poll in 2015, the most recent time the question was asked.

Adkins and Davids have opposing approaches to how they would address the looming issue of insolvency in the Social Security system.

While Adkins has said the solvency of Social Security would be a top priority for her in Congress, she has used it more as a vehicle to criticize the Democratic Party’s fiscal priorities — and some of the spending bills that the most recent Congress has passed — than to present a path to solvency.

When asked about the issue, her campaign said that Adkins wants to address the solvency problem by adding more people to the workforce, particularly women and immigrants.

“The U.S. needs to consider the requirements of industries with a growing workforce and/or unmet needs,” Adkins said. “Immigration can and should be a workforce issue. New workers paying into the system is good for America and our future growth”

Davids, on the other hand, has centered her response in opposition to raising the age when retirees can receive full social security benefits or raising income taxes to help pay for the program.

“It’s a false choice to balance the budget on the backs of the middle class,” said Ellie Turner, the spokeswoman for Davids’ campaign. “Rep. Davids believes we can work to balance the budget without cutting benefits for Kansans who have paid into Social Security their entire lives.”

When asked how, specifically, Davids would address the issue, Turner said the first step would be President Joe Biden nominating and the Senate confirming a commissioner for the Social Security Administration.

Experts say neither would really address the problem.

“The longer you wait, the more drastic the changes need to be,” said Mark Warshawsky, a senior fellow at the American Enterprise Institute, a conservative-leaning think tank. “You should solve problems when they present themselves and not delay and delay.”

The unemployment rate is lower for women then men — 3.4 percent compared to 3.6 percent in September 2022, according to the Department of Labor. However, the labor force participation rate, the metric economists use to determine how many people of working age are actually looking for jobs, is around 12 percentage points lower for women than for men.

“It’s a positive, but it does not matter that much,” Warshawsky said. “It may delay bankruptcy by a couple of years, we really it does not change things that much.”

Akabas said that while getting a commissioner is important, because it would be an expert who would carry authority with Congress in speaking to the issue, it wouldn’t solve the program’s insolvency issue.

“They’re not the ones who are going to come up with the solution,” Akabas said. “That’s going to be Congress.”

Social Security was one of the New Deal programs created amid the Great Depression to help lift senior citizens out of poverty. For most people, some of the money from their paycheck goes to Social Security and their employer matches the amount. Then, when you reach the program’s retirement age (currently 67), you’re able to draw money from the program until you die.

For a long time, there was enough money going into the program from existing workers to pay for the benefits. But, as the Baby Boomers retired, the ratio switched and now more money is going to beneficiaries than is going into the system. In order to make sure people get their full benefits, the program draws money from a Social Security Trust Fund. By around 2035, that trust fund will be insolvent.

Congress last made significant changes to Social Security in 1983, when it agreed to increase taxes that fund the program and slowly phased in a minimum retirement age of 67, rather than 65. No significant changes have been made since. In the early 2000s, former President George W. Bush proposed changes to the program but they were roundly rejected by Congress.

There are largely two approaches to addressing the problem. Either Congress finds the money in the federal budget outside of the Social Security trust funds or they make changes to the program like raising taxes or cutting benefits.

While there has been some legislation proposed in the most recent Congress, none of it has gained significant momentum. In August, two House Democrats called on Congress to expand Social Security, but their legislation made little progress.

Republicans, on the other hand, have called for paring down the program. When running for president in 2015, Sen. Ted Cruz called on Congress to raise the retirement age and decrease benefits over time as payroll taxes are reduced. Cruz, who has endorsed Adkins and is campaigning with her this month, argued that his plan would give people more freedom over how they save for retirement.

House Minority Leader Kevin McCarthy mentioned Social Security in his legislative agenda if Republicans win control of the House this November, but while it’s listed on his note-card sized Commitment to America, the plan is sparse on details.

Adkins has also said she supports a budget by the Republican Study Committee that would address social security by raising the retirement age to 69, would create universal savings accounts like the ones Cruz has called for, and reduce cost of living adjustments.

Many of the Republican approaches are not supported by Democrats, particularly those that would create a new type of savings account for Social Security. Without bipartisan support, it’s unlikely major reform will be able to get through Congress.

“It is much easier to demagogue the issue, and criticize opponents for wanting to do things like cutting people’s benefits or raising people’s taxes, than it is to be the responsible one standing up for the tough choices that are going to have to be made in order to get the program back into structural balance,” Akabas said.

©2022 The Kansas City Star. Distributed by Tribune Content Agency, LLC.
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