President Joe Biden claimed that Democrats will protect Social Security and that Republicans threaten its future in a speech Tuesday in Hallandale Beach, Florida. But the “reality” Biden portrayed is misleading and undermines Social Security’s future.

Social Security’s future is not secure. The program is running out of time and money, and recent increases in debt and spending have crowded out options for reform.

The following are seven things Americans deserve to know so that they can make informed decisions about their own futures and about which Social Security reforms would be best for them.    

  1. Workers’ Social Security taxes aren’t set aside for their retirement. Despite the notion that the Social Security taxes that workers pay are saved to fund their future benefits, the federal government has consistently used Social Security’s revenues to pay for other government spending, issuing Social Security’s trust fund IOUs in return. And starting 12 years ago, Social Security began paying out more in benefits than it collects in taxes, which requires cashing in on those IOUs and adding to deficits. But those IOUs will run out in about 12 years.
  2. Social Security is not secure. If policymakers do nothing, Social Security’s retirement program will be insolvent in 2034 and benefits will be cut by 23% across the board.  
  3. Social Security has a $20.4 trillion shortfall. Part of the reason Social Security is so popular is because it has paid out more in benefits than it takes in taxes. Social Security’s combined old-age and survivors’ insurance and disability insurance programs are scheduled to pay $20.4 trillion more in benefits than they will collect in taxes over the next 75 years. That’s a shortfall of about $157,000 for every household in America. Confronting that reality is why Social Security reform is so difficult, but the longer policymakers wait, the higher that cost will rise.
  4. The cost of inaction is exponential. Between just 2010 and 2020, Social Security’s combined retirement and disability programs’ unfunded obligations surged from $8.6 trillion and $71,000 per household to $20.4 trillion and $157,000 per household. Those costs will continue to grow until policymakers confront Social Security’s insolvency.
  5. Social Security is a bad deal for current and future workers. Social Security may have been a good deal for Biden’s generation, but it’s not a good deal for current and future workers. A Heritage Foundation analysis showed that the average younger worker could receive nearly three times as much as Social Security can provide if they were instead able to save Social Security taxes in their own retirement accounts. (The Daily Signal is the news outlet of The Heritage Foundation.) Even low-wage workers making about $20,000 a year could have 40% larger incomes in retirement as a result of saving on their own. And personal savings can be passed on to family members or friends, something that’s especially important for lower-income Americans, who are less likely to be able to save outside of Social Security and also for individuals with shorter life expectancies. One in five black men will die between the ages of 45 and 65, meaning they will pay tens or even hundreds of thousands of dollars into Social Security and could get little or nothing in return.
  6. Democrats’ plan for Social Security would hasten insolvency and exacerbate shortfalls. Democrats have a proposal—“Social Security 2100: A Sacred Trust”—that they say will expand Social Security benefits, reduce the program’s shortfalls, and conform to Biden’s pledge to not raise taxes on people making less than $400,000. But that claim is disingenuous at best. Their “Sacred Trust” uses 75 years of tax increases on high-income earners to pay for just five years of benefit increases for everyone. If those benefit increases were made permanent—as is the intent of its supporters—“Social Security 2100: A Sacred Trust” would hasten Social Security’s insolvency by two years (to 2032) and increase the program’s already massive shortfalls by an additional 21%.
  7. Democrats’ plan for Social Security would require a $3,000 tax hike for a typical household. Making the benefit increases of “A Sacred Trust” permanent would require raising Social Security’s payroll tax from 12.4% to 16.7% (in addition to the proposal’s tax increases on people making over $400,000). That would equal an extra $3,000 per year and $11,800 total in Social Security taxes for the median household.

Social Security reform is difficult, and Americans need to recognize that. Disingenuous proposals have no place in much-needed discussions and action to preserve and improve Social Security.

While there’s no way to undo past excesses that have made Social Security so popular and so indebted, the good news is that there’s a way to protect the most vulnerable Americans while improving Social Security for current and future generations.

Congress can refocus the program on its original purposes; namely, providing financial security and protecting seniors from poverty. By reducing Social Security’s drag on personal incomes and nest eggs, it’s possible to make more people—and the entire economy—better off.

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