So let’s put aside the criticisms and counter-criticisms and focus on three questions: What’s the problem with Social Security? What do the candidates want to do about it? And how is this likely to play out in the general election?
We’ll do the wonky part first, but to understand it you have to remember that there exists a center-right consensus that deficits are a dire threat to the republic, and it’s worth making painful cuts to government services to reduce them. It’s hard to overstate how powerful this idea has been in Washington; there are entire organizations, well-funded by wealthy people and corporations, whose mission is to spread panic about deficits and urge cuts to entitlement programs (with perhaps some tax increases here and there).
When it comes to Social Security in particular (which has its own funding apart from the rest of the federal budget), the deficit scolds argue that the program is “going broke,” a falsehood meant to convince people that if radical steps aren’t taken soon — including benefit cuts — the program will be unable to provide benefits for retirees.
But the program is not “going broke.” With the retirement of the baby boom generation, Social Security is now giving out more in benefits than it takes in, but this isn’t some kind of unforeseen emergency. It’s exactly what we knew would happen, and it’s the reason the Social Security Trust Fund exists: to make up the shortfall.
According to the latest Social Security trustees report, that trust fund will be exhausted in 2035 (for old-age pensions; the fund for disability benefits has enough reserves to last until 2052). At that point, if the projections are accurate, the program will still be able to provide about three-quarters of benefits.
Getting three-quarters of your scheduled benefits is worse than getting 100 percent. But it’s not nothing. So how do we fix it?
One way is to make the tax that funds Social Security less regressive than it is now. In 2020, you’ll only pay Social Security tax on the first $137,700 of income. If you make anything below that, you and your employer together pay 12.4 percent of your income in the tax. But let’s say you’re a hedge fund manager and you make $15 million a year. Then you’d only be paying about one-tenth of one percent of your income in Social Security tax. So we can just eliminate that cap to make everyone pay the same.
The other part of the solution would be to raise the tax. You could do it very slowly — say by adding one-tenth of one percent a year until you’ve reached your target. But cutting benefits is not necessary.
That brings us to the second question. The Democratic candidates all agree that benefits shouldn’t be cut and the retirement age shouldn’t be raised. The ones who have released detailed plans all argue that, in fact, benefits should be increased. This isn’t a new thing for Democrats; in 2016, President Obama proposed just that at a time when Hillary Clinton and Sanders were advocating the same thing.
So this is a simple contrast between the parties: Democrats want to increase Social Security benefits, while Republicans either explicitly say they want to scale them back or do so implicitly with lots of dark warnings about the coming catastrophe while simultaneously opposing any tax increase, especially on the wealthy.
Here’s where we get to the current argument between the candidates. Remember that Biden, like Sanders and Warren, proposes to increase benefits and pay for it by increasing Social Security taxes on the wealthy. Whether more moderate or more progressive, the candidates are all taking pretty much the same position. But Sanders and Warren now charge that in the past, Biden has flirted with that center-right belief that says the program is in crisis and to solve it we must increase the retirement age or cut benefits.
Which, to be fair, he has (Ryan Grim documents Biden’s history on the topic). Biden long portrayed himself as a contrast to supposedly irresponsible tax-and-spend Democrats, as evidenced by his horror at deficits in both the main federal budget and entitlements for the elderly.
But that’s less important than what he’s saying now. I’ve argued repeatedly that when a candidate flip-flops in some high-profile way, that isn’t a bad thing. They almost always do it when a position they used to hold is no longer tenable within their party, and they’re moving to where the party is. Once they make that move, they don’t go back. If you think that whether a president agrees with you deep in his heart is more important than whether he actually does the thing you want him to do, you have a view of politics that ignores what actually matters.
Now, maybe you think that Biden can’t be trusted on this, and his history suggests that he might consent to Social Security benefit cuts in some kind of “grand bargain” with Republicans. It’s impossible to say that would never happen, but the more of an issue it is right now, the more he’ll feel committed to holding his ground.
And what about the general election? As my colleague Helaine Olen recently argued, Biden’s history could make him vulnerable to attacks from President Trump regardless of his current position. Trump was smart enough in 2016 to say he’d protect Social Security, using a bit of fiscal liberalism to season his xenophobic hate-mongering, and he could claim that Biden is secretly planning to turn everyone’s retirement into a nightmare of deprivation.
Would it work? Probably not, but it’s hard to know for sure. We do know that this will continue to be a strong issue for Democrats. Americans love Social Security (as well they should), and only one party is truly committed to protecting and expanding it.