In just two days, Americans get to exercise what is perhaps their greatest freedom of all: the right to vote. This election, as with most, has a lot on the line.
Since taking office in January 2017, Donald Trump and the Republican Party have enjoyed control of Congress. Although that majority is by the slimmest of margins in the Senate, it has nonetheless allowed Trump to sign into law the biggest overhaul of the U.S. tax code in more than three decades. Should Republicans retain their majority in Congress, it could allow for a second round of tax cuts and further the effort to repeal and replace the Affordable Care Act.
Meanwhile, Democrats aim to retake one or both houses of Congress, which would almost certainly put a damper on President Trump's efforts to pass "Tax Cut 2.0."
The American public isn't forgetting about Social Security
However, not lost in the hoopla of election season, at least among the public, is the health of the Social Security program.
In early June, the Board of Trustees released its latest report on the health of the program -- and needless to say, it wasn't pretty.
The report highlights the expectation that Social Security will expend more than it collects in revenue this year for the first time since 1982. What's more, this net cash outflow is expected to really accelerate in 2020 and beyond. By 2034, the nearly $2.9 trillion in excess cash that Social Security has built up since inception is expected to be completely gone. When this happens, big benefit cuts could follow. This is a problem, given that 62% of aged beneficiaries rely on their monthly check for at least half of their income.
There's clear worry among current retirees, pre-retirees, and even working Americans who expect to receive a benefit in two, three, or four decades' time, that Social Security won't be there for them when they retire, or that it'll be substantially compromised if it does survive.
There's growing fear that Republicans may go after Social Security
Further amplifying these concerns is commentary made by Senate Majority Leader Mitch McConnell (R-KY) in a recent interview with Bloomberg. Said McConnell:
There's been a bipartisan reluctance to tackle entitlement changes because of the popularity of those programs. Hopefully at some point here, we'll get serious about this. We haven't been yet.
Following the largest federal budget deficit since 2012 ($779 billion in fiscal 2018, which ended Sept. 30, 2018), McConnell is effectively calling for cuts to Social Security, Medicare, and Medicaid to help reduce the deficit.
Social Security is facing an estimated $13.2 trillion cash shortfall between 2034 and 2092, and Republicans have long favored cutting long-term expenditures as a means to reduce or completely erase this cash shortfall. The primary way the GOP favors these "cuts" is the gradual increase of the full retirement age, or the age at which you become eligible to receive your full retirement benefit, as determined by your birth year.
Currently set to peak at age 67 for those born in 1960 or later, Republicans would prefer to see the full retirement age gradually increased to as high as age 70. This would require workers to wait longer to receive their full benefit, or to claim early and accept an even steeper monthly reduction. Either way, it saves the program money by reducing the lifetime payouts for future generations of workers.
Fear that the GOP will cut Social Security has grown so apparent that a survey conducted by NPR, PBS NewsHour, and Marist last week found that 60% of Americans would rather see the Tax Cuts and Jobs Act repealed than see Social Security benefits cut.
Relax! There's no chance Republicans are cutting Social Security benefits anytime soon
However, it would appear that this fear is unfounded. Even with McConnell eager to see Republicans tackle Social Security's problems, there are a number of reasons to suggest that the GOP will keep its distance for years to come.
Let's start with the most obvious reason why: President Trump prefers a hands-off approach. During and even prior to his campaign, Trump opined that tackling Social Security with direct reforms was akin to political suicide, without using those exact words. Rather than making direct changes to the program, Trump has preferred influencing economic growth, which, in turn, can boost revenue collection. In 2017, payroll tax revenue accounted for more than 87% of the $996.6 billion that was collected. By passing the Tax Cuts and Jobs Act, Trump and the GOP hope to boost year-over-year GDP growth, as well as increase wage inflation, leading to an increase in payroll tax collection. In sum, Trump won't allow or support direct cuts to Social Security.
Secondly, and building on the previous point, all solutions to fix Social Security's cash shortfall through 2092 would result in a loser. Regardless of whether it's a Democrat-proposed fix, Republican solution, or from an independent legislator, all Social Security resolutions lead to some group of individuals being worse off than they are now. Put simply, politicians fear the backlash of the group of individuals that loses out, and are thus reluctant to undertake serious reform efforts.
Third, it can't be overlooked that there probably aren't enough votes in the Senate to pass a Social Security resolution, even if Republicans retain their majority in both houses of Congress. Any amendment to Social Security would require 60 Senate votes, and it's been four decades since either party held that many seats in the Senate. In other words, bipartisan cooperation would be needed to enact Social Security cuts, and it's highly unlikely that Democrats would agree to such a measure.
Lastly, President Trump has his own reelection campaign to think about two years from now. Presumably, the last thing he'd want on the table is the idea that his party would consider reducing Social Security benefits in order to rein in the federal deficit.
Although it is very much true that Republicans aim to fix Social Security through long-term expenditures cuts, the chance of those cuts being enacted anytime soon might as well be zero.