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As Social Security turns 90, Congress faces financial deadline<\/p>\n
Social Security has a cash flow problem. For years, the agency has been paying out more benefits than it takes in via payroll taxes.<\/p>\n
Scripps News<\/p>\n
Americans like Social Security, but no one wants to pay for it, a new survey shows.<\/p>\n
To keep Social Security, 53% of Americans under age 30 say they\u2019d rather cut benefits for current retirees than pay more taxes to help keep benefits intact, according to a survey<\/a> of 2,000 adults by the libertarian think tank Cato Institute. In contrast, 89% of seniors aged 65 and older said younger workers should pay higher taxes to help keep current retirees\u2019 benefits steady.<\/p>\n Social Security benefits are in danger<\/a> of getting a more than 20% haircut in 2033<\/a> unless Congress does something to shore up the program\u2019s finances, but no one, including Congress, can agree on what reforms to make.<\/p>\n \u201cThere are no good options on the table,\u201d said Emily Ekins, Cato polling director. \u201cWe only have a series of bad options.\u201d<\/p>\n Do people even understand Social Security?<\/p>\n Further complicating matters, most Americans don\u2019t seem to understand how Social Security works, the survey showed.<\/p>\n Half don\u2019t know Social Security is a pay-as-you-go program in which current workers\u2019 payroll taxes fund current retirees\u2019 benefits \u2013 not the workers\u2019 own future retirement, Cato said.<\/p>\n Nearly two-thirds of respondents believe Social Security is a mandatory retirement savings plan they pay for, polling showed.<\/p>\n One in 5 wrongly believe their payroll tax is \u201cinvested\u201d in \u201cThe Social Security Trust Fund\u201d until they retire. Eight percent think their taxes are saved in a personal account<\/a> for them, and 21% admit they don\u2019t know what happens to their payroll taxes.\u00a0<\/p>\n Almost half (43%) don\u2019t even know what a payroll tax<\/a> is, and only 17% know the tax is about 12% split between employer and employee, the survey said.<\/p>\n \u201cThere\u2019s a profound lack of understanding, not just from the standpoint of mechanics but also the structure and how [the program] was initially designed,\u201d Ekins said.<\/p>\n \u00a0What is Social Security?<\/p>\n Social Security is a federal anti-poverty program established in 1935 as part of President Franklin Delano Roosevelt\u2019s New Deal after the Great Depression.<\/p>\n Social Security was never meant to be the only source of income<\/a> for people when they retire. It replaces about 40% of an average wage earner\u2019s income after retiring, according to the National Council on Aging.<\/p>\n Current workers fund current retirees\u2019 benefits through the payroll tax. The Social Security Trust Fund is a government fund that holds excess payroll taxes used to pay for Social Security. When there were more workers paying payroll taxes than Social Security beneficiaries, excess funds were held in the Fund and invested in U.S. Treasuries.<\/p>\n However, this changed in 2010 when incoming payroll taxes were no longer enough to cover Social Security needs<\/a>, and the government began dipping into the Social Security Trust Fund. The first baby boomers \u2013 the largest generation at the time \u2013 began taking Social Security in 2008.<\/p>\n And the U.S. population continues to get older. In 2025 alone, a record 4.18 million people are expected to reach 65. By 2050<\/a>, the 65-and-older group is projected<\/a> to increase 42% to 82 million\u00a0from 58 million in 2022 and its share of the total population is projected to rise to 23% from 17%.<\/p>\n What can be done to save Social Security?<\/p>\n Over the years, policy experts have suggested everything from further raising the eligibility age<\/a> for full benefits, cutting benefits, increasing taxes<\/a>, or some combination of those ideas. No suggestion has ever reached consensus, and Americans\u2019 lack of understanding the program hasn\u2019t helped, Ekins said.<\/p>\n Without better understanding of what Social Security is, \u201cthe public cannot understand why Social Security is\u00a0not\u00a0a retirement savings program and why the system has such a significant shortfall,\u201d she said. \u201cThis lack of understanding makes it more difficult for policymakers and reformers to build public support for necessary changes.\u201d<\/p>\n Absent broader education on Social Security, Ekins said Congress should consider creating an independent nonpartisan commission authorized to study and enact reforms. Most Americans (71%) would support this option, Cato\u2019s survey showed.<\/p>\n The commission would be similar to the Base Realignment and Closure Commission in the 1990s that Congress tasked with recommending how to close and consolidate military bases, Ekins said.<\/p>\n Delegating the job to an independent commission would also provide cover for politicians. If they \u201cdelegate and let the commission make tough decisions, they can say \u2018don\u2019t blame me! I would have voted against it,’\u201d Ekins said.<\/p>\n Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at\u00a0mjlee@usatoday.com<\/a>\u00a0and\u00a0subscribe to our free Daily Money newsletter<\/a>\u00a0for personal finance tips and business news every Monday through Friday morning.<\/p>\n","protected":false},"excerpt":{"rendered":"As Social Security turns 90, Congress faces financial deadline Social Security has a cash flow problem. For years,…\n","protected":false},"author":3,"featured_media":456379,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,51694,3853,17081,71051,451,635,68175,450,457,5678,255,80,700,5682,6391,4995,5677,3161,711,5681,646,766,67,132,68,4748,22060],"class_list":{"0":"post-456378","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-d","10":"tag-deal","11":"tag-franklin","12":"tag-franklin-d-roosevelt","13":"tag-negative","14":"tag-new","15":"tag-new-deal","16":"tag-overall","17":"tag-overall-negative","18":"tag-pension","19":"tag-personal-finance","20":"tag-politics","21":"tag-retirement","22":"tag-retirement-u0026-pension","23":"tag-roosevelt","24":"tag-security","25":"tag-services","26":"tag-social","27":"tag-social-security","28":"tag-social-services","29":"tag-u0026","30":"tag-unemployment","31":"tag-united-states","32":"tag-unitedstates","33":"tag-us","34":"tag-welfare","35":"tag-welfare-u0026-unemployment"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/456378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=456378"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/456378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/456379"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=456378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=456378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=456378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}