Ready or not, election season is about to move into full swing in the months ahead. Though there are plenty of hot-button topics bound to get their time in the spotlight in this year's presidential election, few have more financial importance to Americans than the health of Social Security.
You see, despite successfully making payouts to retired workers for 80 years and counting, Social Security is in some pretty big trouble. According to the 2019 report from the Social Security Board of Trustees, the program is facing an estimated $13.9 trillion cash shortfall between 2035 and 2093. If lawmakers on Capitol Hill don't resolve this cash deficit, benefit cuts of up to 23% could soon be passed along to retired workers.
It's up to Congress and the president to fix these issues, which puts the 2020 presidential candidates' views on Social Security firmly in focus.
Would Joe Biden cut Social Security spending?
One of those candidates who's rightly receiving a lot of attention is the current Democratic front-runner, and the vice president under the Obama administration, Joe Biden.
A little more than a week ago, Democratic presidential hopeful Sen. Bernie Sanders (I-Vt.) railed against Joe Biden for his Social Security stance in a tweet.
Let's be honest, Joe. One of us fought for decades to cut Social Security, and one of us didn't. But don't take it from me. Take it from you. pic.twitter.com/qh7qb1Hmcl— Bernie Sanders (@BernieSanders) January 22, 2020
But Biden was both candid and clear on an episode of MSNBC's Morning Joe after Sanders' tweet that he has no intention of cutting Social Security benefits. While asked directly if he would cut benefits if he became president, Biden replied, "No. No. No. No!" Biden went on to discuss that he's worked to strengthen Social Security throughout his tenure in Congress, and that many of statements being used to say otherwise have been taken out of context.
The fact that Biden would choose not to reduce Social Security spending were he to take office certainly jibes with the core thesis of the Democratic Party. You see, most Democrats believe that the best way to resolve Social Security's imminent cash shortfall would be to raise additional revenue, and that doing so would be best served by raising or eliminating the maximum taxable earnings cap associated with the program's 12.4% payroll tax on earned income. In short, Democrats want the rich to pay their fair share and would prefer to expand, not reduce, Social Security benefits.
Open and shut case, right? Well, not so fast.
Biden's previous actions suggest Social Security cuts aren't completely off the table
Though I believe it's fair to consider that Biden's views on a number of topics have evolved over time, including Social Security, he's also had a number of instances where he's been implicated with direct or indirect cuts to the Social Security program.
For example, in 1995, while speaking to members of Congress, then-Senator Biden suggested the idea of freezing Social Security's outlays (this is the clip being played in Sanders' tweet). Here's the full citation of what Biden had to say on the Senate floor:
For example, I'm going to go on record. I'm up for re-election this year, and I'm going to remind everybody what I did at home, which is going to cost me politically. When I argued that we should freeze federal spending, I meant Social Security, as well. I meant Medicare and Medicaid. I meant veterans benefits. I meant every single solitary thing in the government. And I not only tried it once -- I tried it twice, I tried it a third time, and I tried it a fourth time. Somebody has to tell me in here how we're going to do this hard work without dealing with any of those sacred cows, some deserving more protection than others.
Though Biden notes that this quote was taken out of context at a time when lawmakers were trying to avoid a government shutdown, it's nevertheless opened the former vice president to criticism.
Furthermore, according to a report from NBC News in 2007, then-presidential candidate Joe Biden was willing to consider a bipartisan solution to resolve Social Security's imminent cash shortfall. This meant being open to the Republicans' core idea of gradually raising the full retirement age, or the age at which a retiree becomes eligible to receive their full monthly payout from Social Security. Raising the full retirement age would mean that future generations of workers would have to either wait longer to receive their full payout or accept a steeper reduction for claiming early. No matter their choice, lifetime benefits paid would be reduced.
Biden also played an instrumental role in the payroll-tax holiday that was passed along toward the beginning of the previous decade. As the lead negotiator between Democrats and Republicans at the congressional level, Biden helped orchestrate a two-year holiday in payroll tax collection that saved taxpayers $112 billion. However, in the process, he also cost the Social Security program the same amount of much-needed revenue, despite ongoing warnings from the trustees' report about insufficient revenue over the long run (75 years).
Here's why Social Security cuts remain unlikely, regardless of who's in the Oval Office
Now, before you start getting too worried, let me also point out that it's highly unlikely that Social Security benefits would be cut anytime soon.
First of all, nothing is going to get done from a policy standpoint in an election year. If and when Social Security is finally reformed, the end result is that some group of people will be worse off than they were before. Knowing this, lawmakers aren't going to risk losing votes during an election year by supporting reforms.
Secondly, any sort of major amendments to Social Security are going to require support in Congress that, frankly, doesn't exist right now. Democrats in the House have made it clear that reforms intended to reduce benefits aren't going to get their vote. Meanwhile, the Senate remains divided enough, based on party, that reaching the requisite 60 votes would be practically impossible to pass an amendment to the Social Security Act.
Third, there's also the very real possibility that Biden's views on Social Security have evolved. Let's remember that President Trump had zero desire to offer direct solutions to fix Social Security during his campaign, but in his 2020 federal budget he proposed reducing Social Security outlays by $26 billion (in total) between 2020 and 2029. Views can and do change among lawmakers, and Biden's views on Social Security may have, as well.
There's still a long way to go before the presidential election is decided, so it's important for current and future beneficiaries not to get ahead of themselves. But don't overlook the possibility that a solution to strengthen Social Security might include some components that would, ultimately, reduce lifetime benefits.