The Dumbest Way to Save Social Security

Last month the 70 million or so people receiving Social Security benefits all got an 8.7% raise. That was their “cost of living adjustment” to offset last year’s inflation.

Meanwhile, some members of Congress look at the national debt, then look at all the money going to Social Security and Medicare benefits and think, “We can’t possibly afford this.”

These programs do indeed have challenges. According to the latest Trustee’s Report, the trust fund for retirement and survivor’s benefits will be depleted in 2034. The system will then only have its payroll tax income, which the trustees estimate would cover only 77% of scheduled benefits. The same will happen to Medicare Part A (hospital benefits) in 2028. It will then have to cut benefits by about 10%.

The brick wall, while not right in front of us, is getting closer.

The good news: Putting the programs on a sustainable path is easily possible with some combination of tax increases, benefit changes, or maybe a higher eligibility age.

Congress isn’t seriously discussing any of those. They have other ideas, though. One may sound sensible but in fact would guarantee a recession, thereby hurting not just retirees but everyone else, too.

Yes, we need to do something. But this isn’t it.

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