Staring down Social Security’s looming insolvency, senators found Wednesday they’re miles apart when it comes to answers.
At a hearing orchestrated to talk about solutions, Democrats and Republicans realized they can’t even agree on a process for how to debate fixes, much less agree on the fixes themselves.
GOP senators favored a bipartisan commission to talk the ideas through and bring back recommendations for Congress to bless.
But many Democrats said a commission seems like a roundabout scheme to force benefit cuts onto America’s seniors.
For them, the only answer is tax increases, particularly on the rich, to patch the troubled program. And they said any commission is an attempt to paper over the cuts that a commission would almost certainly recommend.
“A lot of that stuff is just another way to hide what people want to do in terms of cutting benefits,” said Sen. Sheldon Whitehouse, Rhode Island Democrat.
“If Republicans want to solve Social Security, put your plan on the table. Why hide it?” he said. “This shouldn’t be hard. And the first step, frankly, is going to be, [for] our Republican colleagues, put up or shut up. Give us a plan. If you don’t have one, let’s have a vote on ours.”
Sen. Mike Crapo, the Idaho Republican who chairs the Senate Finance Committee and who called the hearing, said Republicans do have plans — some of them worked on with Democrats — but they should be hashed out in a commission.
He said Congress has had decades to act but has failed, so it needs a commission to shape the solutions and create the “pressure” for lawmakers to act.
“Let’s not make this partisan. Let’s get together and work together on solutions, and then we can hopefully get to something we can put over the finish line, and pass,” he said.
All sides did, at least, agree that they’re finally in crunch time to do something.
Under the current law, Social Security’s main trust fund — which is chiefly an accounting gimmick at this point — will be depleted in about six years.
When that happens, the program will instantly be forced to reduce payments to match income from the payroll tax. Analysts predict a cut in benefit checks of somewhere around 22 cents on the dollar.
That works out to nearly $500 less each month in 2033, which would be a real dent for the one in seven seniors who rely on Social Security for most of their sustenance.
Sen. Ron Johnson, Wisconsin Republican, said Social Security was mismanaged from the start, asking current workers to pay for current retirees. The idea that a worker’s money was being stocked away for them to collect later was “a fiction,” he said.
“Social Security is a legal Ponzi scheme,” he said.
It worked better when life spans were shorter, and the ratio of workers to retirees was more favorable. It was more than five per Social Security recipient in 1960, for example.
Now, it’s less than three-to-one and still falling.
Over the next 75 years, the program’s finances will fall $190 trillion short of what is needed to pay current projected benefits.
All sides also agreed on the mix of potential solutions to make that up: increase revenue, slow the growth of benefit increases, remove wealthier people from the rolls, and delay the age when people can start collecting.
Charles Blahous, a former Social Security trustee, said the problem is now so big that no single one of those is going to work — unless lawmakers are prepared for the ramifications of crippling tax increases or a 30% cut in future payments.
But AARP, the political behemoth advocacy group for older Americans, said it’s not open to any changes to future benefits.
“Do not cut Social Security the people have earned,” said Nancy LeaMond, AARP’s executive vice president.
She also complained about using a commission.
Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, said no major Social Security changes have ever come about without a commission of some sort.
He said commissions can help create a shared set of facts and wade through the tradeoffs for different policies.
“Commissions and related entities don’t force action, but they can create an environment in which action is more likely to occur,” he told senators.
Several Republicans challenged AARP to do more than carp from the sidelines.
Sen. James Lankford, Oklahoma Republican, said the organization is running scare ads warning that a commission would pave the way to cuts.
But the reality, he said, is that if Congress does nothing, those cuts are coming in six years.
“It is a real challenge to be able to have a grown-up conversation about this,” he said.
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