On Tuesday, Nov. 3, citizens across the United States will vote to determine who sits in the Oval Office for the next four years. The decision will shape many things about American life-- and with Social Security slated to face impending financial shortfalls, there's a chance the outcome could determine the fate of this important entitlement program.
President Trump and Joe Biden have some very different ideas on what should happen to Social Security. Mr. Biden is promising to expand benefits and assess additional payroll taxes on high earners, while President Trump has pledged to cut the payroll tax, which would mean Social Security loses its dedicated funding stream.
Since the candidates have such divergent ideas, the big question is: What's likely to happen to Social Security after the election? While no one has a crystal ball to predict the future, there's one outcome that's most likely to occur.
This is what's most likely to happen to Social Security following the 2020 election
Regardless of whether Donald Trump serves a second term or Joe Biden takes the highest office, the most likely outcome for Social Security is that absolutely nothing changes.
The President is unable to make any fundamental modifications to the program without Congress. Congress is currently divided, with the Republicans holding a majority in the Senate and the Democrats holding the House. There's a good chance this won't change in 2020, or, if it does, the Senate may be split 50-50, with the vice president casting the deciding vote.
This divided Congress has had difficulty compromising even on pressing issues, such as another coronavirus relief bill. That makes it extremely unlikely they'll be able to find consensus on Social Security. After all, while a crisis is coming, the trust fund isn't scheduled to run out of money until 2035 -- so Congress doesn't have to act during the next president's term.
And any bill to fix Social Security's financial problems is likely to involve hard decisions that are politically unpopular and that are anathema to one party or the other. The Republicans, for example, would be unlikely to agree to the type of payroll tax increases necessary to shore up the program, while the Democrats have been vocally opposed to the types of benefit cuts that would almost assuredly be necessary to address the financial shortfall over the long term.
In other words, there's a reason Social Security has widely been viewed as the "third rail" of politics, with politicians afraid to touch it for fear of drawing the ire of a large portion of the voting public.
Even if one party is able to get control of the White House, the Senate, and the House, any legislation making major changes would likely be filibustered in the Senate. The filibuster is a tactic used to block legislation, and unless the rules change, 60 votes are needed to advance any bill that's been filibustered. It would be very difficult for either party to amass such a large Senate majority.
All of this means the odds aren't great that either Trump's or Biden's campaign promises related to Social Security will come to fruition. And that's not necessarily a good thing, because the longer a stalemate prevents some type of action, the more Social Security's asset reserves will be depleted and the more politically difficult it will become to find a fix.
If lawmakers don't do something, a 24% automatic benefit cut could occur in 2035 when Social Security's trust fund runs out and revenue coming in from payroll taxes isn't sufficient to fund all promised benefits. Current and future retirees need to plan for this to happen by maintaining a safe withdrawal rate and a balanced investment portfolio, as well as by budgeting carefully, as there's been no sign that a political solution is going to be found any time soon.