There is little debate that Social Security will need more funding to strengthen its trust fund. This has been true for years.
But will the trust fund go bankrupt? The doomsday prophets are strong on this issue, but there are solid reasons why the program will survive and thrive. My prediction is that Social Security will not only survive, it will grow.
According to Marc Miller, who writes the Revised pension newsletter, “The causes of the long-term social security imbalance have long been clear: the increase in benefit spending as the country ages and a dramatic drop in birth rates, resulting in declining numbers. of workers contributing to the system over time. “
Of course, Congress can act on a fix at any time now. Several proposals are on the table.
âIf we take action sooner, avoiding the depletion of trust funds is the starting point, but Congress should also use targeted benefit expansion as a means to address growing income inequality, racial gaps and gender issues that undermine retirement security, âMiller notes.
“The goal should be to increase the amount of pre-retirement income that Social Security replaces, especially for low- and middle-income households that depend the most on the program.”
Where is this taking us? There are many ways to attack this problem, Miller adds:
âWe can pay for these changes with modest increases in FICA (withholding tax) rates or by other means. For example, we could allow trust funds to invest a small portion of their holdings in stocks or impose a tax on financial market transactions.
âReforming the program as soon as possible would allow for a more in-depth debate and discussion of possible solutions. And maybe – just maybe – some action would end the demagoguery that has fueled so many concerns among the public about the future of Social Security. “