Economists challenge warnings of Social Security's demise

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Published Saturday, September 18, 2021
by Eric Galatas

(Wyoming News Service) Social Security, the program credited with lifting 15 million older residents across the U.S. out of poverty, will become insolvent by 2034, according to the most recent report by Social Security Trustees.

However, some economists say dire predictions do not reflect the reality of how the program operates.

Max Sawicky, senior research fellow at the Center for Economic Policy Research, has studied the program for nearly three decades. He said any actual threats to Social Security are not economic, they are political.

"If people are persuaded that the program will fail, then it's easy to take it away from them," Sawicky contended. "We've been hearing these scare stories about deficits forever, and none of the doom that was predicted has panned out."

Social Security always has delivered full benefits owed to people who paid into the program their entire working lives, in part because presidents and Congresses of both parties have taken steps to keep revenues and spending in balance.

Sawicky suggested the easiest fix would be to remove the cap on taxable wages. Currently, top earners only pay Social Security taxes on the first $142,000 of their income.

Sawicky pointed to the TRUST Act as the latest attempt to cut so-called entitlement spending. The measure, proposed by Sen. Mitt Romney, R-Utah, Joe Manchin, D-W.Va., and Krysten Sinema, D-Ariz., would create a committee to fix Social Security's finances, which Sawicky argued are not broken.

He worried the so-called remedies could be attached to larger spending packages, out of the public eye, and with very little opportunity for debate.

"It's really a way to evade democratic accountability, by people who are really hell-bent on cutting benefits and shrinking the program," Sawicky emphasized.

Social Security has long been viewed as a "third rail" of U.S. politics, largely due to its popularity among a strong majority of Americans.

Sawicky recommended instead of reducing average benefits of $1,500 dollars a month, the program should be expanded, through payroll taxes on the nation's wealthiest earners, tapping general funds, or harnessing growth in wages and productivity.

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