12/24/18
Social Security is our country's most important social program, with an estimated 22.1 million people being kept out of poverty as a result of the guaranteed monthly payout received by eligible beneficiaries (many of whom are senior citizens). Without this income, the poverty rate for elderly Americans would probably be a lot higher. According to the newest annual report from the Social Security Board of Trustees, the program is expected to expend more than it collects in revenue for the first time in 36 years this year. The silver lining here is that Social Security is in absolutely no danger of going bankrupt. Even if the program were to lose one of its three sources of income -- the interest income from asset reserves -- it would retain its two sources of recurring revenue, which include the 12.4% payroll tax on earned income of up to $128,400 (as of 2018) and the taxation of benefits. These recurring sources of income, which simply require that Americans keep working, made up 91.5% of the $996.6 billion collected by Social Security in 2017.
During his presidential campaign and since taking office, Trump has repeatedly suggested that direct amendments to Social Security are off the table. However, Trump's hands-off approach to Social Security could come under fire from within the Oval Office. That's because on Friday, Dec. 14, 2018, it was announced that now-former director of the Office of Management and Budget, Mick Mulvaney, will be taking over as Trump's chief of staff. Although a chief of staff isn't going to be directly involved in policymaking, Mulvaney will be a voice in the president's ear at all times. In the past, Mulvaney, a fiscal hawk, has advocated for a balanced federal budget, and hasn't been shy about suggesting that so-called entitlement programs, which includes Social Security, should be on the table as a possible option for expenditure cuts. Back in 2011, Mulvaney introduced the Balancing Our Obligations for the Long Term Act. In particular, it called for increasing Social Security's full retirement age. Your full retirement age being the age at which you become eligible to claim 100% of your retirement benefit, as determined by your birth year. Does this mean Trump will change his tune on Social Security with Mulvaney as his chief of staff? Well, no, it doesn't. But having an ardent fiscal hawk as Trump's right-hand man should raise an eyebrow or two for those folks destined to receive a Social Security retirement benefit in a few decades' time.