Social Security

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Social Security provides vital financial support for more than 57 million beneficiaries. Social Security also provides critical benefits to widows and those with disabilities. With 10,000 “Baby Boomers” turning 65 every day, it is essential that we work to preserve the programs these seniors have come to count on.  As Chairman of the House Ways and Means Committee, one of my top priorities is to preserve the Social Security safety net and make sure the program remains solvent for future generations.

Social Security is Going Broke

Social Security is funded by the payroll taxes of current workers to pay the benefits of current retirees. Projected long run program costs are not sustainable under current program parameters. The Social Security Trustees project that the cash flow deficits that began in 2010 will continue permanently.  That means that to pay full Social Security benefits, the government must cut spending, raise taxes, or borrow more money to finance pension payments.

A central factor in the looming financial crunch is the fact that our society is aging.  The “Baby Boom” generation has already started to collect their Social Security retirement benefits. As a result, the number of retirees has grown more rapidly than the number of individuals whose taxes pay for future retirees’ benefits. There are currently two workers supporting each retiree compared to the 17 workers that supported each retiree at the time Social Security was created. Increasing life expectancy and the approaching retirement of more Baby Boomers continues to put increasing pressure on Social Security. According to a Congressional Budget Office report, the number of beneficiaries is expected to increase by nearly one-third from 59 million in 2014 to 78.2 million in 2025, an increase of 32.4 percent. Because of this, the number of workers supporting each Social Security recipient is projected to fall.

The Need for Reform

According to the most recent Social Security Trustees Report, beneficiaries will face a painful 23 percent benefit cut in 2033 when the Trust Funds are exhausted.  At that time, even those who are currently on Social Security, may experience indiscriminate cuts in benefits at a time when they are increasingly reliant on the program.

The Fiscal Year 2015 Budget, The Path to Prosperity

In the 20th century, the federal government forged a social contract with working families. At the end of their careers, the government would provide health and income security in their retirement. In the 21st century, that contract is in jeopardy. Rising health-care costs and an aging population threaten to bankrupt two crucial programs: Medicare and Social Security.

The failure of politicians in Washington to be honest about Medicare and Social Security is putting the health and retirement security of all Americans at risk. The fact is that Medicare and Social Security are in dire need of reform. With both programs weighed down by tens of trillions of dollars of unfunded liabilities, the federal government is making promises to current workers about their health and retirement security for which it has no means to pay. Without reform, these empty promises will soon become broken promises.  Both parties must work together to chart a path forward on common sense reforms, and the House-passed budget provides the nation’s leaders with the tools to get there.

This budget calls for setting in motion the process of reforming Social Security by altering a current-law trigger that, in the event that the Social Security program is not sustainable, requires the President, in conjunction with the Social Security Board of Trustees, to submit a plan for restoring balance to the fund. This provision would then require congressional leaders to put forward their best ideas as well. Although, in the House, the Committee on Ways and Means would make the final determination, this provision would require that:

If in any year the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, in its annual Trustees’ Report, determines that the 75-year actuarial balance of the Social Security Trust Funds is in deficit, and the annual balance of the Social Security Trust Funds in the 75th year is in deficit, the Board of Trustees should, no later than the 30th of September of the same calendar year, submit to the President recommendations for statutory reforms necessary to achieve a positive 75-year actuarial balance and a positive annual balance in the 75th year.

No later than the 1st of December of the same calendar year in which the Board of Trustees submits its recommendations, the President shall promptly submit implementing legislation to both Houses of Congress including recommendations necessary to achieve a positive 75-year actuarial balance and a positive annual balance in the 75th year.

Within 60 days of the President’s submitting legislation, the committees of jurisdiction to which the legislation has been referred shall report the bill, which shall be considered by the full House or Senate under expedited procedures.

Again, the aim of this option is to force recognition of the need to save Social Security. This procedure offers a first step in that direction.

Social Security and FY2015 Consolidated Appropriations

Members of the House and Senate Appropriations Committees introduced the Fiscal Year 2015 Consolidated Appropriations Bill on January 14, 2014.  The legislation combines the 11 individual spending bills that typically fund programs within the government with a continuing resolution to keep DHS operating at current levels until a separate spending measure is passed.  In compliance with the Bipartisan Budget Agreement, the bill provides $1.013 trillion for the operations of the federal government. 

$1.4 billion was authorized for Program Integrity activities within the Social Security Administration.  This is a $199 million increase from the enacted FY2014 level.  These programs include activities to ensure that disability and SSI benefits are properly paid. The bill, H.R. 83, was passed in the House on January 15, 2014—with my support—by a vote of 359 to 67.  On January 16, 2014, it was passed by the Senate, and on January 17, 2014, President Obama signed the Consolidated Appropriations bill into law.

Social Security Cost of Living Adjustment

On October 15, 2015, the Social Security Administration announced that there will be no Cost-of-Living-Adjustment (COLA) for 2016.  To compensate for the effects of inflation as measured by the Consumer Price Index (CPI), Social Security recipients may receive a COLA in their checks beginning in January of each year.  I understand that seniors, families, and individuals are hurting, and I will continue to work with my colleagues to ensure that Congress does more to encourage economic growth and bolster savings.

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