Can future generations rely on Social Security in retirement? (opinion piece)

Written by: Chas Macquarie 

The Social Security Act was passed and signed into law in 1935. In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers aged 65 or older a continuing income after retirement.  The bill passed both Houses of Congress overwhelmingly.  

Over the years many amendments have been made. A disability insurance program was added in 1954; Medicare was added in 1965; automatic annual cost-of-living allowances (COLAs) were added in 1972. Many other tweaks and revisions were made. 

Most retirees, including me, rely to some extent on their Social Security to make ends meet and Medicare for their health insurance. This year, according to the Social Security Administration (SSA), fully 20% of the entire U.S. population will receive Social Security payments. In Carson City, that is over 11,000 people. 

But Social Security is in financial trouble. Social Security payouts exceed income from payroll taxes and the SSA estimates that the Social Security Trust Fund (officially called the Old Age, Survivors, and Disability Insurance program, or OASDI) will run out of money in about 10 years. At that point, if no changes are made, Social Security payments will be reduced by 21%. 

Obviously, something needs to be done about this if we are to avoid great hardship for our senior citizens that rely on Social Security and Medicare to pay their bills. The question is what to do?    

Despite promising to not cut Social Security, the Republican Study Committee’s 2024 budget proposes to raise the Social Security retirement age for those now aged 59 by three months per year beginning in 2026 until it reaches 69 (it is currently 67 for people retiring this year) and cut some disability benefits. The SSA has not analyzed the proposal, so it is unknown if it remedies the solvency problem.  Obviously, it would mean less benefits for anyone 59 or younger. In Carson City there are roughly 8,000 residents between 50-59 who will have less in retirement. 

Democrats Senator Sheldon Whitehouse and Rep. Brendon Boyle have introduced the Medicare and Social Security Fair Share Act (MSSFSA) which would require taxpayers with over $400,000 in annual income to contribute to the OASDI at the same rate most workers do. For married couples the limit would be $500,000. This would affect about 2% of taxpayers. According to the SSA analysis, this would extend the solvency of the OASDI for at least the next 75 years. It would fix the problem and not impact 98% of taxpayers and not reduce benefits. The MSSFSA would also require these high earners to contribute 5 percent of their incomes to Medicare.  

The Inflation Reduction Act (IRA) of 2022 gave the government the ability to negotiate drug prices for Medicare beneficiaries and requires drug companies to pay rebates to Medicare when drug prices increase faster than the rate of inflation. This resulted in a reduction in several drug prices and capped insulin prices at $35, saving an estimated 1.5 million seniors on Medicare an average of $500 on insulin costs in 2023.  

No Republicans voted for the IRA. Instead, the Republican plan, called Project 2025, will cut Medicare funding, eliminate Medicare’s ability to negotiate drug prices, increase the price of insulin for over 1.5 million seniors, and allow drug manufacturers to charge whatever they want for life-saving drugs. The Republican plan will create great hardship for our seniors who are already struggling to make ends meet. 

When we go to the polls in November, we have a choice regarding Social Security and Medicare. We can vote for a party that wants to cut Social Security for future generations and increase drug costs for seniors, or we can vote for a party that will ensure that future generations have the retirement benefits they need to achieve financial security. It’s really a question of values.