For years we've been hearing that Social Security will run out of money if some action isn't taken to reinforce the program.
Although there is some truth to this, the reality is more complicated.
While it's true that the OASDI (Old-Age, Survivors and Disability Insurance) trust fund will run out of funds around 2033 (some project in 2032), if no action is taken then Social Security would continue to have money to pay some, but not all, benefits.
The problem is that the loss of money from the trust fund would mean that Social Security recipients would face a benefits cut of 23-24%. The prospect of such a cut is unacceptable, considering that millions of retirees depend on this money to survive. (See: When Will Social Security Run Out of Money? And Medicare? | Kiplinger, Retirees Face an $18,100 Benefit Cut in 7 Years-2025-07-24 )
The reason Social Security is threatened is because it was designed to be a "pay-as-you-go" program in which current workers pay into the system to support current retirees.
For many years this worked as planned because workers outnumbered retirees by so much that Social Security ran surpluses that were placed into trust funds.
As baby boomers have begun to retire in large numbers, the worker to retiree ratio has grown so narrow that the reverse situation is now taking place --- the main trust fund is currently being tapped because there are not enough workers paying into the system to cover benefits to retirees.
In 2024, almost $67 billion of the trust fund was used to cover benefits, up from $41.4 billion in 2023. As boomers continue to retire, projections are that the trust fund will continue to be drained before being depleted in 2032 or 2033. (See: Trust Fund Data)
That's the bad news.
The good news is there is still time to develop and execute a plan to make sure such a situation never happens. However, we must address this looming crisis soon because the longer we wait, the more difficult it will be to fix the problem.
One solution which I've proposed is an immigration tariff that would be paid by employers.
Although this is not a permanent fix, it's an idea that could provide money to help slow the drain of the OASDI Trust Fund.
My team and I have run calculations and believe this tariff could have provided enough money to cover last year’s trust fund deficit.
We will be doing an education tour about this in large venues in a city near you.
Please stay tuned and plan to attend.
If you are interested in learning more about this idea and how it would work, please read about it here: A Tariff That Could Rebuild U.S. Manufacturing? | Newsmax.com
While the Immigration Tariff could provide a boost to Social Security, a long-term solution is still needed. There are a number of ways to go about solving the problem.
Since a list of possible solutions can be found by doing a quick web search, I'm not going to focus on specific solutions. Instead, I'll focus on the strategy that will need to be employed to get to a permanent solution.
Most columnists writing opinion pieces offer solutions to fix Social Security which end with a call for Congress to take up the issue and pass something.
Unfortunately, such a fix in Congress would entail Democrats working with Republicans to come up with a bipartisan solution.
Although I'm generally optimistic, I've seen nothing that would lead me to believe we could get a bipartisan agreement on how to repair Social Security anytime soon.
If we're going to fix Social Security, I believe we will have to remove politics from the equation. Fortunately, there is a model for how to accomplish our goals.
Ronald Reagan demonstrated this when he was president by issuing an executive order creating a bipartisan commission to make recommendations.
The commission developed and submitted recommendations which were introduced in Congress as the Social Security Amendments of 1983, and the recommendations passed both houses of Congress with strong bipartisan support. (See: Social Security History)
President Trump has proven to be a man of action who gets things done.
If we can get his attention on this matter, I believe he will happily follow the path laid out by President Reagan to save Social Security.
You can play a key role in making this happen by contacting your congressional representatives and senators, asking them to introduce a resolution that urges the president to form a commission to save Social Security.
Additionally, it's my hope that a commission would look at the economics of allowing those who draw Social Security before full retirement age to continue working without being penalized.
By drawing early, they will always receive lower monthly benefits.
When you combine the lower benefits with the fact that America needs the workers, and factor in that the taxes they pay while working will offset some (if not all) of their benefits, it appears to be a common-sense proposal that should be explored.
For more information, please visit www.JoeFromTexas.com.
Joe from Texas is a family man with children, grandchildren, and great grandchildren. He's experienced tremendous success and lived the American Dream. His beliefs are both straightforward and deeply held. He believes in God, his family, and the United States of America. Read Joe Penland's Reports — More Here.
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