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Social Security could go broke by 2035, but lawmakers have new ideas to fix it

Doug Sword, CQ-Roll Call on

Published in News & Features

The trustees' report issued Monday paints a slightly rosier short-term picture than last year's forecast, showing that over the next six years, more than a million workers eligible for retirement benefits will keep working and put off claiming Social Security.

And a look at the new figures shows that an additional 700,000 people eligible for disability insurance will take a pass, as officials say the booming labor market has enabled more people to discard their disabled status in favor of full-time work.

These are "interesting" developments, but they don't change the wall that the retirement fund, in particular, is destined to hit without congressional action, said Andrew Biggs, a resident scholar at the American Enterprise Institute, a conservative think tank.

"This isn't going to change anybody's views on Social Security," said Biggs, who testified before Larson's subcommittee earlier this year.

While more Americans may work longer, the number of retirement fund beneficiaries is still projected to balloon from 53.5 million to 62 million by 2025. "You've got a similar long-term trend ... with the trust fund running out," Biggs said.

While disagreeing with Larson's approach because it includes payroll tax increases, Biggs agrees that it is the one proposal on the board that makes the program solvent for the next 75 years.

"The report underscores why it is so important that Congress take action now to prevent cuts from occurring in 2035, by ensuring Social Security is fully funded and strengthened for today's seniors and future generations," Larson said in a statement Monday. He said his bill "makes the trust fund sustainably solvent for the rest of this century and beyond."

But Rep. Tom Reed, R-N.Y., the ranking member on the Social Security subcommittee, drew a line in the sand on tax increases at a panel hearing earlier this month.

"The mission of the Republicans on this subcommittee is to secure benefits without tax increases," he said. Reed said payroll tax increases in Larson's bill would, by 2043, amount to $600 for someone making $50,000 annually.

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"(W)e're asking millennials to bear a higher tax increase in a program that they don't believe is going to be" there when they retire, Reed said.

Conservatives would address the funding problem not by cutting benefits, but certainly by curtailing benefit growth, Biggs said. Conservatives and liberals don't differ on wanting to secure benefits for lower-income retirees, but disagree on middle- and upper-income recipients, he said.

Both the Larson and Sanders plans, Biggs said, would raise taxes on middle- and upper-income earners while providing the same groups with greater benefits.

But middle- and upper-income earners are already saving for retirement. "All of this to pay higher benefits to people who really don't need them," Biggs said.

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