President Biden has been adamant in opposing cuts to Social Security benefits. He stated in the State of the Union address earlier this year that he wouldn't allow anyone to make cuts to the program: "Not today. Not tomorrow. Not ever."
But the members of the Republican Study Committee (RSC) have a different take. The RSC argues that its proposed 2024 budget "protects seniors from President Biden's 23 percent across-the-board cuts to Social Security."
Does Biden's Social Security plan really include 23% benefit cuts? Yes and no.
Image source: Official White House photo by Adam Schultz.
No plan equals a bad plan
The RSC stated in its proposed 2024 budget that the president's budget would lead to the aforementioned 23% reduction in Social Security retirement benefits. In one sense, that's true.
Biden's proposed 2024 budget increases funding for the Social Security Administration's field office staffing. However, it was silent on any major reforms to Social Security.
The RSC interprets that silence as doing nothing about Social Security. It maintains that if the U.S. Congress and the president take no action to bolster the program, major cuts are on the way.
This gloomy outlook is unfortunately correct. According to the latest Social Security Trustees report, the combined Social Security trust funds are on track to run out of money by 2034. Steep benefit cuts would then have to be made unless something is done to add revenue, reduce costs, or both.
So far in his presidency, Biden hasn't pushed for specific changes to Social Security that would prevent benefit cuts in the future. Meanwhile, the RSC's proposed budget includes a gradual increase in the full retirement age. The committee's chairman and budget and spending task force stated that the recommended reforms "would not affect benefits for any senior in or near retirement and would prevent insolvency for the next decade."
More to the story
It's inaccurate, though, to claim that the president has a Social Security plan that specifically includes 23% benefit cuts. Sure, Biden hasn't unveiled his own proposals to prevent Social Security from becoming insolvent since he became president. However, there's more to the story.
The president's proposed 2024 budget stated, "The Administration is committed to protecting and strengthening Social Security and opposes any attempt to cut Social Security benefits for current or future recipients." It added, "The Administration looks forward to working with the Congress to responsibly strengthen Social Security by ensuring that high-income individuals pay their fair share."
Based on these comments, it seems that Biden prefers to allow Congress to work out the details of any Social Security reforms. That could be the smartest political strategy.
The comments also underscore that the president would like for wealthier Americans to pay more to fund Social Security. This is in keeping with Biden's 2020 presidential campaign platform. In it, he called for applying the Social Security payroll tax to all income of $400,000 or more. Currently, the payroll tax cap is set at $160,200.
Should seniors worry?
Putting the political wrangling aside, should seniors who are retired or near retirement worry about looming Social Security benefit cuts? Not really.
To be sure, it's important to have other sources of retirement income outside of Social Security. The federal program was never intended to fully fund retirement.
And the clock certainly is ticking. Social Security reforms are needed to prevent cuts in the next decade.
However, neither Democrats nor Republicans want to take the blame if inaction leads to those cuts. Both political parties have ample motivation to strike a deal before it's too late.
