“Stop Aiding Countries That Hate Us!”: Billions of Us Dollars Wasted Abroad While Social Security Suffers

Gabriel RomanNov 16, 2023

Minute Read

The Social Security program is at a crossroads. According to the latest trustees’ report, lawmakers have only 12 years to reform the program before it faces significant financial challenges. This report highlights the urgency for legislative action to ensure the continuation of full benefits for future beneficiaries.

The Approaching Deadline

By 2034, the Social Security trust fund, valued at $2.9 trillion, is expected to be drained. If no legislative steps are taken, the program would have to depend solely on current tax revenues, which would only cover about 75% of the planned benefits. This situation demonstrates the need for prompt and effective solutions.

Good News on the Horizon

Despite these challenges, there is a silver lining. Numerous policy proposals are gaining bipartisan support among voters. These could potentially offer paths to bridge the Social Security funding gap. These proposals present a hopeful outlook for the program’s future and suggest not everything is doomed.

Understanding Public Opinion

The University of Maryland’s Program for Public Consultation (PPC) conducted a study that included over 2,500 registered voters about Social Security. This survey was conducted through an online policymaking simulation. It provided insights into public preferences for different solutions to fix the budget shortfall.

A Surprising Consensus

The PPC’s findings were unexpected. Most Republican and Democrat voters supported many proposals to increase revenue, reduce benefits, or enhance benefits for low-income earners. These measures could potentially resolve 78-95% of the funding shortfall over the next 75 years.

Comprehensive Reforms for Social Security

The American electorate shows openness to various proposals aimed at reforming Social Security. These ideas span from payroll tax adjustments to benefits structure changes and even revising the retirement age. Clearly, the American public is willing to explore different avenues to ensure Social Security’s effectiveness.

Proposal to Increase Payroll Tax Cap

A key proposal is the idea of raising the payroll tax cap from its current limit of $147,000 to $400,000. This change is projected to resolve about 61% of Social Security’s financial shortfall. The support for this proposal cuts across party lines, indicating a rare bipartisan agreement on a crucial fiscal issue.

Active Congressional Response

In response to this public sentiment, Congress has seen movement. Notable figures like Elizabeth Warren and Bernie Sanders have called for an increase in payroll tax on incomes exceeding $250,000. This includes capital gains, which is often a significant portion of income for high earners. The “Social Security 2100: A Sacred Trust” proposal echoes this public opinion.

Adjusting Benefits for the Wealthier Retirees

There’s also considerable support for a plan that reduces the benefits for the wealthiest 20% of Social Security recipients. This approach is considered a fair method to balance the program’s books, potentially eliminating around 11% of the budget shortfall. However, higher earners would still benefit more significantly than their lower-earning counterparts.

Proposal for Raising Retirement Age

Reflecting the reality of increased life expectancy and longer working years, there is a proposal to incrementally raise the full retirement age to 68. This idea builds on changes initiated by the federal government in 1983. If effective, this proposal could potentially reduce the program’s financial deficit by 14%.

Slight Increase in Payroll Tax Rate

Another solution under consideration is a modest increase in the payroll tax rate. Raising it from the current 6.2% to 6.5% of wages could significantly address the funding challenges. Analysts suggest this method could solve up to 16% of the Social Security shortfall.

Boosting Minimum Benefits for Lower-Income Retirees

There is widespread support for increasing the minimum benefit amount. The proposal suggests raising it to $1,341 for individuals with a 30-year work history, which would recognize the challenges lower-income retirees face. This increase, although adding 7% to the shortfall, is seen as a critical step to ensure a dignified living standard for these retirees.

Revising the Inflation Adjustment

The current method of adjusting Social Security benefits is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. However, some argue for a shift to the Consumer Price Index for the Elderly, or CPI-E, which may more accurately reflect the living costs for seniors. Adopting CPI-E could increase the shortfall by 12% but is argued to offer a more realistic financial support system for older adults.

Increased Benefits for Older Retirees

There is also a growing call for enhanced benefits for Social Security recipients over 80. Increasing these benefits by 5% would add to the budget shortfall. For many, it is seen as an essential move to help the oldest retirees cope with their escalating expenses in their advanced years.

The Challenge of Political Consensus

Image Credit: mark reinstein/Shutterstock.

Despite various reform proposals in Congressional discussions, reaching a consensus remains a significant challenge. Social Security reform is often considered a politically sensitive issue, which hinders decisive action. This reluctance to tackle Social Security reform shows how complex the program is.

Balancing Immigration and Aid Costs with Social Security

In response, one user said, “The cost of illegal immigration costs the U.S. taxpayers billions of dollars every year, and the political leadership is doing nothing to stop the economic bleeding.” Another added, “Now, the political leadership is considering cutting social security because they don’t have enough money to fund the program. How about stopping illegal immigration and stop sending taxpayer money to foreign countries to fund endless wars.”

Contrast Between Foreign Spending and Social Security

Sharing this idea, one user said, “It’s sad we can spend billions of dollars on wasted wars like Vietnam and Afghanistan, or fund other countries wars and steal trillions from the social security fund, but we can’t afford to fund social security. What a joke.” Many users questioned current fiscal policies and priorities, suggesting reevaluating how national resources are distributed.

Domestic Focus Over International Obligations

Many people argue that the U.S. government should prioritize its citizens’ needs, including ensuring the solvency of Social Security, over international responsibilities. One person said, “Maybe our government needs to take care of Americans before they take care of other people in other countries or cross the borders.”

Accountability for Past Actions

Criticism also targets past governmental decisions, particularly using Social Security funds for purposes other than the program itself. One commenter said: “The government raided this fund for decades now, and there is a shortfall. How about replacing that money? Stop aiding foreign countries that hate us and take care of our own.”