Why isn't Congress motivated to save Social Security?

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Why isn't Congress motivated to save Social Security?

1 00:00:00,060 –> 00:00:05,190 >> For literally the past three years Congress has chosen not to fix Social Security and by 2 00:00:05,190 –> 00:00:09,140 pushing the problem off it becomes a more difficult problem for all of us to solve. 3 00:00:09,150 –> 00:00:15,120 >> We do intend to have the roll out of it though and introduce it in 4 00:00:15,120 –> 00:00:22,560 late September or early October. 5 00:00:22,590 –> 00:00:27,900 >> Social Security's trust fund is projected to become insolvent one year earlier than 6 00:00:27,900 –> 00:00:33,240 it was in last year's report. We know that Congress has to either raise taxes or cut 7 00:00:33,240 –> 00:00:38,400 benefits to make Social Security solvent. We could also increase the cap the maximum wage on 8 00:00:38,400 –> 00:00:44,190 which payroll taxes are levied. We can reduce the initial benefits that retirees get 9 00:00:44,190 –> 00:00:45,990 when they first claim benefits. 10 00:00:45,990 –> 00:00:51,870 >> We could increase the retirement age which is another way of reducing benefits. The most popular plan is 11 00:00:51,870 –> 00:00:57,480 from Congressman John Larson of Connecticut. That's a so skewed expansion plan that actually increases benefits 12 00:00:57,480 –> 00:01:02,560 across the board for rich retirees and for poor retirees and it funds this by increasing taxes. 13 00:01:02,580 –> 00:01:07,720 >> It will enhance benefits for the first time in more than 50 years. 14 00:01:07,720 –> 00:01:13,020 And this is a president Biden's strong suggestion that we lift the cap on 15 00:01:13,020 –> 00:01:18,450 recipients who are currently not paying their full salary when the Social Security 16 00:01:18,450 –> 00:01:19,950 trust fund runs out. 17 00:01:19,950 –> 00:01:25,470 >> Benefits must be cut by around 22 percent. They'd be cut for current retirees if 18 00:01:25,470 –> 00:01:31,410 he cut for future retirees or retirees of all income levels. They'd be cut for people receiving disability benefits 19 00:01:31,410 –> 00:01:37,200 as well who are receiving survivor's benefits. Demographics are the real driving force behind Social Security's 20 00:01:37,200 –> 00:01:42,720 funding shortfall. We have more retirees with the baby boomers retiring at a rate of 10000 21 00:01:42,720 –> 00:01:48,300 per day life expectancies increased with low birth rates means there's fewer workers in 22 00:01:48,300 –> 00:01:50,520 the workforce paying into Social Security. 23 00:01:50,520 –> 00:01:55,920 >> The cold pandemic had a number of effects on Social Security. Unfortunately a certain number 24 00:01:55,920 –> 00:02:01,200 of retirees have died. That does reduce costs a little bit for the program but it 25 00:02:01,200 –> 00:02:07,140 also had an effect on the economy which meant fewer taxes being paid into the system. Many progressives 26 00:02:07,140 –> 00:02:12,570 honestly don't trust private markets to provide retirement security for people and 27 00:02:12,570 –> 00:02:16,980 so for progressives a strong government role seems to make sense. 28 00:02:16,980 –> 00:02:22,350 >> On the other hand for Republicans they often distrust a government role. They think that individuals can 29 00:02:22,350 –> 00:02:27,700 make better choices on their own. Both sides have points. Individuals do make mistakes and 30 00:02:27,700 –> 00:02:33,490 in saving for retirement but on the whole retirement savings are much higher today than they were in the past. 31 00:02:33,510 –> 00:02:39,000 >> The opponents profess to love Social Security and they profess to love 32 00:02:39,000 –> 00:02:43,730 what it will do and what they don't like to do is actually pay for it. 33 00:02:43,740 –> 00:02:49,320 >> The chances that Congress is going about Social Security cutting benefits in a precipitous way are very very 34 00:02:49,320 –> 00:02:54,990 small. The reality though is this long term program is being managed by politicians who 35 00:02:54,990 –> 00:03:00,840 have very very short time horizons. Are thinking about their poll ratings today. I think by the next congressional 36 00:03:00,840 –> 00:03:06,480 election which is at most two years away they're not thinking about how do we make this system solvent for 75 37 00:03:06,480 –> 00:03:06,840 years. 38 00:03:06,870 –> 00:03:12,050 >> I think it is likely this will get left to the last minute before a solution is come up with 39 00:03:12,050 –> 00:03:17,490 and to be honest for Democrats in Congress there are strong incentives to delay reform 40 00:03:17,490 –> 00:03:22,770 . We know that reforming early makes the problem easier to solve but 41 00:03:22,770 –> 00:03:28,290 the longer we delay reform the more retirees we have collecting benefits 42 00:03:28,290 –> 00:03:31,900 than the stronger the political force against any sort of benefit. 43 00:03:31,980 –> 00:03:37,610 >> I won't be shocked at all if this becomes a 2033 solution to a 20 three 44 00:03:37,610 –> 00:03:38,250 insults.



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