For 80 years, Social Security has been a promise hardworking, taxpaying Americans can trust — a promise that should they retire, become disabled, or die, a safety net would be there for them and their families. It’s an important program on which many Americans rely after a lifetime of hard work.
And yet as Social Security turns 80, that promise is in serious danger of being broken if Washington fails to act upon the latest warnings about Social Security’s financial health.
Just last month Social Security’s trustees warned that the disability program can’t pay full benefits. Not in 10 years. Not in 20 years. Next year. Make no mistake — disability’s impending crisis is the canary in the coal mine when it comes to America’s entitlement programs. The stark reality is that if nothing is done, then folks on disability could see an approximately 20 percent cut in their benefits.
Bottom-line: We can no longer afford to wait to take action. In just the last five years Social Security’s finances have gone south — fast. When Social Security turned 75, we were told disability would run short of money in 2018. We were also told Social Security’s 10-year shortfall was just under $200 billion — meaning the difference between the amount of tax revenues collected and benefits paid.
Today that shortfall is over $1 trillion.
Given that Social Security is in trouble, what do we do?
Some people in Washington suggest that we simply raise taxes — but history has shown we cannot tax our way to solvency. Here are the facts: When Social Security first began, the payroll tax was only 2 percent — evenly split between employers and employees — on the first $3,000 in wages. But the payroll tax rate has since been increased to 12.4 percent.
Moreover, the payroll tax rate now applies on the first $118,500 in wages. Raising taxes on today’s workers, whose paychecks are growing at the slowest pace in 33 years, is not just wrong — it does nothing to fix the underlying problem. You see, when it comes to the retirement side, there simply aren’t enough workers to support retiring Baby Boomers. In 1950 there were 16.5 workers for each beneficiary. Today there are just 2.8 workers for each beneficiary. This ratio will only continue to shrink.
When it comes to disability, another bad idea many Democrats support is to do nothing — just shift some funds from the retirement program to the disability program without doing anything to shore up the finances of either. I don’t agree with that approach.
I want real solutions that will work for hardworking taxpayers. That’s why — first thing this year — I successfully pushed for a change in the House rules that encourages much-needed reform so we can fairly and responsibly improve Social Security. With this rule in place, there’s no more kicking the can down the road.
In addition, I issued a four-point commitment to the disability community that included ensuring benefits continue to be paid and promoting opportunity for those who are trying to return to work. I also introduced several measures aimed at putting the disability program onto sounder financial footing.
More specifically, these common-sense measures would:
- Increase penalties for those who commit Social Security fraud
- Prohibit doctors who have committed fraud against Medicare from participating in the disability program
- Require the Social Security Administration to review decisions by judges to ensure judges are accurately following the rules; and
- Give individuals who are denied disability benefits the information to get back to work.
The Ways and Means Committee also recently held a hearing on how we can promote opportunity for folks who want to work. The disability program has a complex array of rules and regulations that are difficult for anyone to understand. We need to do better.
Since my first day as the Social Security chairman on the Ways and Means Committee, I’ve been committed to rising to the important challenge of fairly and responsibly fixing Social Security. For 80 years Social Security has embraced the American spirit of hard work and provided a vital safety.
I want to see that legacy continue. Americans want, need and deserve a Social Security program that will be there for them, their children and grandchildren.