Recap: Maya MacGuineas Gives Senate Testimony on Saving Social Security
On June 9, the Senate Budget Committee held a hearing on "Saving Social Security: Expanding Benefits and Demanding the Wealthy Pay Their Fair Share or Cutting Benefits and Increasing Retirement Anxiety." The hearing took place a week after the release of the 2022 Social Security Trustees' report. Committee for a Responsible Federal Budget president Maya MacGuineas testified before the Committee. Her written testimony can be found here and a video of the hearing is below:
Chairman Bernie Sanders (I-VT) began his remarks by citing the Social Security trust funds' projected insolvency of 2035 and the 20 percent across-the-board benefit cut that will occur upon insolvency. He then followed by announcing his introduction of the Social Security Expansion Act, which would increase costs for expanded benefits but generate enough revenue to pay for expanded benefits and make Social Security solvent over the next 75 years.
Ranking Member Lindsey Graham (R-SC) used his opening remarks to advocate for a comprehensive and bipartisan approach that would provide stability to the Social Security program.
The hearing also featured Nancy Altman of Social Security Works and the Strengthen Social Security Coalitions, Robert Roach of the Alliance for Retired Americans, and Alex Lawson of Social Security Works. Each of these witnesses voiced their support for the Social Security Expansion Act. They advocated for revenue-only approaches to Social Security's financing challenges, relying solely on increased revenues without any decreases in Social Security spending.
MacGuineas then gave her opening remarks where she touched on Social Security's financial conditions, the cost of waiting to fix the program, objectives of reform, and options to strengthen the program. She explained that in 2010, the solutions available were much larger than they are now, with the situation becoming more difficult each year. She also pointed out the fact that the United States spends 600 percent more on seniors than children.
MacGuineas explained that a balanced approach to fixing Social Security would be the best way to achieve solvency, rather than a revenue-only or spending-only approach; the former would be partisan and difficult to enact at a time when acting sooner rather than later is the best course of action for the future of Social Security. A revenue-only approach would also worsen economic inequality and require only those that are currently working - or will in the future - to contribute to extending solvency, and it would do nothing to rein in spending through reductions to cost-of-living adjustments (COLAs) or benefit reductions for those that do not rely on Social Security. Objectives for reform should be to make changes to protect those who depend on the program most, and to implement pro-economic growth and comprehensive changes.
Shai Akabas of the Bipartisan Policy Center also testified at the hearing. His testimony echoed the sentiment that Social Security insolvency is rapidly approaching and recommended a holistic and bipartisan approach to restoring solvency. He explained that the Bipartisan Policy Center's recommendations from six years ago would have made Social Security solvent for over 75 years.
Throughout the hearing, the senators debated solutions aimed at stabilizing Social Security, including raising the payroll income tax cap, reducing Social Security benefits for wealthier Americans that don't need them, raising the eligibility, and adjusting annual COLAs. MacGuineas pointed out that the economic assumptions in the 2022 Trustee's report were likely overly optimistic and out-of-date, which could mean insolvency is closer than Trustees project. She also answered a question regarding solvency plans being proposed, in which she praised Chairman Sanders for proposing a comprehensive proposal for 75-year solvency and advocated for bipartisan plans to be put forward. The TRUST Act, which would establish bipartisan commissions to restore solvency to federal trust funds, was also discussed by MacGuineas and the Committee members.
We are thankful to the Senate Budget Committee for holding this hearing and hope to see a commitment to bipartisan solutions that provide long-term solvency to Social Security for years to come. In addition to our options to secure the Social Security trust fund, we also have our Social Security Reformer, which helps users visualize the choices needed to maintain Social Security solvency.