Speaker 1: Social Security, the Trust Fund as they call it, is
Speaker 1: going to be belly up by twenty thirty three, and
Speaker 1: that could mean benefit cuts for everyone, even current retirees.
Speaker 1: But is it really Because I got to tell you, guys,
Speaker 1: I have heard in my lifetime over and over and
Speaker 1: over again this same story.
Speaker 2: So let's go to somebody.
Speaker 1: Who has what has to be the most frustrating job
Speaker 1: in the entire world. Mike Murphy works for the Center
Speaker 1: for the Responsible Federal Budget, which obviously we don't have,
Speaker 1: but he is here to talk about Social Security and
Speaker 1: what that really really looks like.
Speaker 2: Mike, Welcome to the show. First of all, thank.
Speaker 3: You, Mandy. Great to be with you. Thanks thanks for
Speaker 3: having me.
Speaker 1: Is your job trying to create a responsible federal budget?
Speaker 1: Is it just like walking up and just slamming your
Speaker 1: head against the desk every single day watching what's happening
Speaker 1: in Washington, DC?
Speaker 3: Yeah, pretty much. At the Committee for Responsible Federal Budget, Yes,
Speaker 3: we advocate for fiscal responsibility, Amandy Goilso do it in
Speaker 3: a non partisan, bipartisan way, so we're trying to work
Speaker 3: with both parties, which is also tough, okay these days
Speaker 3: to try to work on both sides. Of the aisle,
Speaker 3: but sorely needed, and that, yeah, it is. It was
Speaker 3: a little bit of pushing a boulder up the hill,
Speaker 3: to say the least.
Speaker 1: I would say that I have been so incredibly disappointed
Speaker 1: by the lack of seriousness demonstrated in Washington, DC when
Speaker 1: it comes to spending on either side of the aisle.
Speaker 1: With the exception of Thomas Massey, who is as principled
Speaker 1: about spending as any human being is ever going to get,
Speaker 1: there doesn't seem to be any measure of seriousness in
Speaker 1: DC about cutting spending because they simply refuse to acknowledge
Speaker 1: the impact that it has on the overall economy in
Speaker 1: my view. But now we've got social security. This is
Speaker 1: a sacred cow. This is the third rail of politics.
Speaker 1: And once again we're being told that in twenty thirty
Speaker 1: three the trust fund will be insolvent, which means that
Speaker 1: they will only be able to pay seventy seven percent
Speaker 1: of benefits.
Speaker 2: For all retirees.
Speaker 1: And I say that because a lot of times before
Speaker 1: we been told, well, these cuts will be in the future,
Speaker 1: this will. But now the future is now according to this,
Speaker 1: what's the reality of this, Mike.
Speaker 3: The future is now just to put one point on
Speaker 3: that too. It's it's clear to me that next year
Speaker 3: at the election box is arguably the first time, but
Speaker 3: people are going to be voting for people on the
Speaker 3: federal ballot that will be in office when this insolvency
Speaker 3: date is right up against it. Because if you think
Speaker 3: a six year Senate terms, so this this windows here
Speaker 3: now because you're right, man, he because it has been
Speaker 3: talked about for a while, it's always been in the
Speaker 3: early twenty thirties, but it's common now and then we
Speaker 3: need to get on it. So so the issue here
Speaker 3: is social Security. You know, stepping back, it's a vitally
Speaker 3: important federal program. I just seventy million people about on
Speaker 3: Social Security. There's going to be more by the time,
Speaker 3: you know, twenty thirty three rolls around. Over forty percent
Speaker 3: of people rely on for a majority of their income.
Speaker 3: So it's not it is the third rail of American politics.
Speaker 3: But it also is a vitally important program. And then
Speaker 3: when we reach that point, by law, they are required
Speaker 3: when it goes insolved, to match what the schedule benefits are,
Speaker 3: what the revenues that are coming in. And you said
Speaker 3: it already. When that happens, it would have to be
Speaker 3: in a twenty three percent across the board cut that
Speaker 3: is estimated to be about equating to about seventeen thousand
Speaker 3: dollars for the average middle income couple on consol security.
Speaker 1: To put that in context, that is a big chunk
Speaker 1: out of a relatively I mean, here's the thing. The
Speaker 1: forty percent of Americans that are living on Social Security, they're.
Speaker 2: Not living high on the hog.
Speaker 1: These are people who are probably living very modestly already,
Speaker 1: who are probably already very budget conscious already. At a
Speaker 1: seventeen thousand dollars hit would be devastating.
Speaker 3: It would be truly devastating. And it's even more so
Speaker 3: why you mentioned how you know that you're discouraged, I
Speaker 3: guess is a light way of saying about the lack
Speaker 3: of attention truly on fiscal challenges. Obviously we are too.
Speaker 3: But the one that really gets me it relates to
Speaker 3: this is this is kind of a bipartisan agreement now
Speaker 3: to talk about how we're not talking about social security,
Speaker 3: we're not touching social security. That is now the campaign
Speaker 3: talking point on both sides of the aisle. And the
Speaker 3: reality is when someone says that they're not going to
Speaker 3: touch Social Security're not going to talk about Social Security
Speaker 3: and continues that stance. They're guaranteeing that twenty three percent
Speaker 3: across the board cut. It's going to happen by law,
Speaker 3: and it's better to solve it sooner rather than later
Speaker 3: for all sorts of reasons. You can spread, spread the
Speaker 3: changes out, you can phase it in. There's logical reasons
Speaker 3: to do things sooner rather than later and not wait
Speaker 3: to the deadline, which is what Washington always does.
Speaker 2: I have a very smart listener.
Speaker 1: His name is Joe, and he sent me this earlier,
Speaker 1: and he says, the simplest and farest solution is the
Speaker 1: same one that's been used six other times in the
Speaker 1: past ninety years. Raise the payroll contribution rate. The current
Speaker 1: Fyker contribution rate is seven point sixty five percent for
Speaker 1: the employee and the same amount from the employer. Of
Speaker 1: that point two percent goes into Social Security and one
Speaker 1: point four to five percent goes into Medicare. Increasing the
Speaker 1: contribution rate zero point five percent each moves the program
Speaker 1: from its current annual cash deficit position into an annual
Speaker 1: cash flow positive position and begins to rebuild the trust fund.
Speaker 2: How accurate is that and is it possible.
Speaker 3: The number sound accurate, and it's certainly possible. The solution
Speaker 3: to Social security. People have been looking at soci security
Speaker 3: for years in the kind of public policy world, okay
Speaker 3: in DC, and the levers that you can change on
Speaker 3: social Security actually pretty well known. And you have to
Speaker 3: look at the both sides of the equation. It's on
Speaker 3: the revenue side that comes into the program, and can
Speaker 3: you adjust benefits that are going out and on the
Speaker 3: revenue side, so you touched on what the gentleman's recommending
Speaker 3: is sort of adjusting the rates of taxes. Another very
Speaker 3: common proposal. I was actually just at a couple of
Speaker 3: speaking events in Colorado yesterday talking about this, and three
Speaker 3: times this idea came up, which is not necessarily adjusting
Speaker 3: the rate. But any people realize that you stop paying
Speaker 3: Social Security tax contributions when you reach a certain income,
Speaker 3: right so it'd right throughout one hundred and seventy thousand
Speaker 3: dollars above that you don't pay any payroll tax right now,
Speaker 3: you don't get benefits either, and as a social insurance program,
Speaker 3: so it's designed that way, but they haven't adjusted that
Speaker 3: level to account for total wages and years, and you
Speaker 3: can easily adjust that cap. That's actually a much more
Speaker 3: popular and it actually polls well on both sides of
Speaker 3: the aisle to adjust that cap. So I think on
Speaker 3: the revenue side, that's a more likely scenario than maybe
Speaker 3: adjusting the rates. But then there are things you can
Speaker 3: do on the benefit side as well.
Speaker 1: Do you eliminate the cap entirely, because that seems like
Speaker 1: the most practical way to just say, look, if we're
Speaker 1: going to do this, let's do it all in one
Speaker 1: fell swoop instead of piece mealing it and saying we're
Speaker 1: going to raise it to three hundred thousand or whatever
Speaker 1: it is. I mean, that seems to me to be
Speaker 1: the most practical way if you're going to do it,
Speaker 1: And frankly, that would be preferable than some of the
Speaker 1: other asenine proposals that I've seen, things like, you know,
Speaker 1: if you are above everybody at the same level, So basically,
Speaker 1: if you have made more money in your career and
Speaker 1: you've paid in at a much higher level, you're going
Speaker 1: to get the same benefits as someone who didn't. And
Speaker 1: and that offends me that that that irritates the crap
Speaker 1: out of me, because it's just a wealth redistribution scheme
Speaker 1: at that point, and I'm very uncomfortable with that notion.
Speaker 1: So I'd rather pay more in on the front side
Speaker 1: and leave that sort of you know, if you pay more,
Speaker 1: you get more the way it is.
Speaker 3: Yeah, I think there's a there's there's several considerations, and look,
Speaker 3: that could ultimately be part of the solution. We wet
Speaker 3: the committee first, put a bunchet, don't advocate this is
Speaker 3: your exact solution. There's lots of ways to do this.
Speaker 3: That could be one, but there's some considerations to be
Speaker 3: had there. So one you already I think mentioned before.
Speaker 3: So if you let's say you lift that cap and
Speaker 3: that the name that always says you're listening to the caps,
Speaker 3: say warm Buffet's going to be paying it up to
Speaker 3: his full income, right right? Well are you paying benefits
Speaker 3: to Warren Buffett up to that full income too? Right?
Speaker 3: Because those are the considerations you have to have, and
Speaker 3: that that obviously changed the equation and the other factors
Speaker 3: you have to have thought there are Well someone might say, well, no,
Speaker 3: you shouldn't do that, but then also you've got to
Speaker 3: be cognizant of then it's somewhat changes the nature of
Speaker 3: the program. There's always been somewhat sort of as a
Speaker 3: fairness issue of like there's something related to the contributions,
Speaker 3: related to what benefits really to what you pay in.
Speaker 3: So if you start messing with that doesn't infect the
Speaker 3: political viability of the program in different ways. So the
Speaker 3: other thing you have to think about is what's the
Speaker 3: other dollar potential purpose for that same tax revenue, because
Speaker 3: a lot of people have ideas right of different programs,
Speaker 3: new programs, ways we want to spend money on different things,
Speaker 3: and if we're going to try to pay for them,
Speaker 3: potentially more revenue. A lot of times people try to
Speaker 3: put that revenue on the wealthier side of the tax base.
Speaker 3: And if you're doing it for this and also want
Speaker 3: to do it for something else, you got to take
Speaker 3: that into accounts. So those are just other considerations, Mandy.
Speaker 3: But I think different ways to adjust that cap are
Speaker 3: certainly going to be part of the discussion when politicians
Speaker 3: get around to this.
Speaker 1: And that's the sad part because the longer they wait,
Speaker 1: the more this is going, the bigger this adjustment is
Speaker 1: going to have to be. And my frustration is is
Speaker 1: that we have now normalized allowing Congress to create an emergency,
Speaker 1: and then they last minute, at midnight run in with
Speaker 1: some crap plan to fix the emergency that they created
Speaker 1: because they didn't act on it earlier. And then we're
Speaker 1: all supposed to be grateful that they came up with
Speaker 1: a garbage solution because they did it at the last minute.
Speaker 1: And I'm like, this is too big an issue to
Speaker 1: just continue to kick the can down the road. Is
Speaker 1: there any real movement? Are there enough members of Congress?
Speaker 1: Are there enough members of the Senate that are concerned
Speaker 1: about this that anything could happen feasibly in the next
Speaker 1: couple of years instead of waiting till twenty thirty two
Speaker 1: for the last minute garbage solution that will inevitably be horrible.
Speaker 3: Yeah, there are some. I can tell you that there
Speaker 3: are certainly many actually that understand the problem. They know
Speaker 3: what's coming. It is the quintessential third rail. That's why
Speaker 3: if you do step out and offer specific solutions. But
Speaker 3: I I'm I'm going to try to be an ey
Speaker 3: optimist that I tend to be an optimist that some
Speaker 3: of the things we were already talking about gives me
Speaker 3: a hope it's going to start to be on the table.
Speaker 3: When you start seeing this within the election windows of people.
Speaker 3: I think that can start to make it an issue
Speaker 3: when you know, the next presidential election, which will be
Speaker 3: here frankly before you know it's that's going to be
Speaker 3: in bad term. So thinking about how to raise this
Speaker 3: in the context of campaigns and make sure when it's
Speaker 3: talked about in campaigns that can make it be more
Speaker 3: of an issue because right now it's not being talked
Speaker 3: about during campaigns and we need to. And that's why
Speaker 3: I talking to folks like yourself and your listeners who
Speaker 3: want to press their polutmakers and candidates to how will
Speaker 3: you save Social Security? Don't tell me we're not touching it,
Speaker 3: because not touching it leads to that cut.
Speaker 2: Well, here's the thing.
Speaker 1: The thing is this. The thing is I've already solved
Speaker 1: that problem because I am a genius. I don't know
Speaker 1: if you know this. I'm a mastermind of everything. I'm kidding,
Speaker 1: but I have given this a lot of thought and
Speaker 1: how to make this a campaign issue. In this article
Speaker 1: last week actually solidified this for me. So if I
Speaker 1: am a Republican who is serious about cutting US or
Speaker 1: fixing Social Security, or if I'm a Democrat serious about
Speaker 1: fixing social Security. My accusation of my opponent is he
Speaker 1: wants to cut your social security twenty three percent, because
Speaker 1: that's what inaction does, and that is the campaign slogan
Speaker 1: that I go with. The opponent wants to cut your
Speaker 1: social security twenty three percent, We've got to fix it,
Speaker 1: We've got to figure it out, and that person is
Speaker 1: unseerious and wants your benefits to be cut. Now, it's
Speaker 1: a scare tactic, one hundred percent, but since the creation
Speaker 1: of social security, it's been used as a scare tactic
Speaker 1: in campaign.
Speaker 2: So I'm just leaning in on it.
Speaker 1: But I think until we get people that are serious
Speaker 1: about this and recognize that doing nothing is a twenty
Speaker 1: three percent cut, we're gonna end up with this.
Speaker 2: And I will say this, Mike, I'm gen X.
Speaker 1: When I read this article last week, I was like,
Speaker 1: of course gen X is getting ready to retire.
Speaker 2: Of course social security is going broke. Of course it
Speaker 2: happens to this generation.
Speaker 1: So you know, millennials, I think, really believe social security
Speaker 1: isn't going to be there.
Speaker 3: I know I believe it.
Speaker 1: When I was younger, I wish i'd plan more for retirement.
Speaker 1: I'm playing catch up. Now, but I don't know what
Speaker 1: to do to unscare or maybe scare them in the
Speaker 1: right direction, especially people who are already getting benefits, because
Speaker 1: I've had a few people text me today and say, well,
Speaker 1: this is just for people going forward, right, They're not
Speaker 1: going to cut my benefits, but it is going to
Speaker 1: cut everyone's benefits right.
Speaker 3: By law required across the board, everybody on the program.
Speaker 3: And so I think, look, I think your tactic is
Speaker 3: exactly a lot right, easy for me to say, right,
Speaker 3: because I completely agree with that, where we just have
Speaker 3: to be warning people that this is what's coming as
Speaker 3: a result of people not, you know, putting forward a
Speaker 3: solution if they're going to attack somebody else, you not
Speaker 3: putting forward a solution as leading to that twenty three
Speaker 3: percent cut, I completely agree with that, and I think
Speaker 3: that you know, what we really need to do is
Speaker 3: have it. It's going to have to come from voters,
Speaker 3: because voters. Actually, this is kind of when you're folks
Speaker 3: like ourselves who we talk about this all the time,
Speaker 3: we always actually find it surprising because we say it
Speaker 3: all the time and it's in the news a decent amount,
Speaker 3: but people still don't know that that date's coming. I
Speaker 3: said it multiple times in some of these events this day,
Speaker 3: and I had several people go, wait, that's in twenty
Speaker 3: thirty three. That's actually not that far away. Yeah, and
Speaker 3: so people actually don't know what's coming. So we really
Speaker 3: need to get out there and tell the truth about
Speaker 3: the state of Social Security during the campaigns, going out
Speaker 3: to voters, making sure they're aware so they then can
Speaker 3: convey that same message maybe that you just said.
Speaker 1: Let me put this in the context of a bigger
Speaker 1: conversation about the federal budget itself. Here's my problem, right, Okay,
Speaker 1: so raise the cap, take more of my money. I
Speaker 1: don't trust the federal government to just keep it for
Speaker 1: social Security because we already know how that.
Speaker 2: Song and dance sense. I mean, that's my problem.
Speaker 1: Is there anything that, in the course of reforming what
Speaker 1: we've got now, we could create or rather remove the
Speaker 1: ability of the federal government to pilt for the Social
Speaker 1: Security funds?
Speaker 3: Yeah? I think I think that should be part of
Speaker 3: the discussion going forward, to think about how you're putting
Speaker 3: some guardrails around this. But the broader point there is
Speaker 3: that they just have to get the whole fiscal house
Speaker 3: in order. Okay, because what's been going on is, which
Speaker 3: I think is what you're alluding to, is that, yes,
Speaker 3: like the social security quote unquote surplus that was there,
Speaker 3: what's been going on is they actually just use a
Speaker 3: lot of that revenue that's coming in to kind of,
Speaker 3: you know, make the deficit frankly appear less than it
Speaker 3: otherwise would have been. Okay, but it's still huge, and
Speaker 3: so it's just a matter of if we got to
Speaker 3: get the overall deficit under control. That goes back to
Speaker 3: your original point, Mandy, of what's been going on in Washington.
Speaker 3: People talk a big game on the deficit and spending,
Speaker 3: and then when they get to governing and they have
Speaker 3: the opportunity to do so, they don't get a time.
Speaker 3: And that's actually is what we're seeing right now with
Speaker 3: the big beautiful billets moving forward. That's concerned that that
Speaker 3: will inc increase the deficit based on the way it's
Speaker 3: structured right now, because they're not cutting enough spending to
Speaker 3: all set the spending increases in the taxes. So that's
Speaker 3: the issue is, yes, they should try to figure out
Speaker 3: to put some guardrails, but the broader point is they
Speaker 3: need to get more responsible at the entire federal budget
Speaker 3: right as part of the conversation.
Speaker 1: You appreciate it with the choir on that. I really
Speaker 1: appreciate your time, Mike. I wish that you know some
Speaker 1: of the ideas that are floating around there. I think
Speaker 1: are way better than others. But I hope that we
Speaker 1: can inspire the conversation and maybe, as I said, those
Speaker 1: politicians need to run on they're in action, And somebody
Speaker 1: rightfully texted this, they said, but the candidate must present
Speaker 1: a plan, not just run on the mantra. But I
Speaker 1: think if you came out as a candidate and said, look,
Speaker 1: we have multiple options, and here are the options that
Speaker 1: I like best, but I'm open to a bigger conversation
Speaker 1: about fixing this issue, I think then you can at
Speaker 1: least begin to have the conversation and get people who
Speaker 1: are serious about fixing the problem in office. Because I
Speaker 1: do believe that laying it out in those stark terms
Speaker 1: would motivate older people who are already getting benefits, who
Speaker 1: are absolutely going to vote, to really think about that.
Speaker 1: The solvency of their own pocketbooks may be the thing
Speaker 1: that makes this happen. Mike murphylic you have the last
Speaker 1: word from the committee for the responsible federal government.
Speaker 3: Well, I just agree. I agree with everything you just
Speaker 3: said about the fact that people, when they're talking about
Speaker 3: in the campaign, actually I think it, frankly is better
Speaker 3: that you're actually putting out there. You don't have to
Speaker 3: put out your specific solution. This is exactly how I'm
Speaker 3: going to say. But that would be nice, not be preferable,
Speaker 3: but frankly, the political reality is that that actually might
Speaker 3: hurt people to basically, like, all of a sudden, you're
Speaker 3: kind of honing in on that one thing, and people
Speaker 3: are going to attack that. When there's a range of
Speaker 3: frankly common sense options, we have them on our website.
Speaker 3: People can go and check that out at CERFB dot org.
Speaker 3: We have a tool it's called the Reformer that you
Speaker 3: can go on there and basically fix all scared of yourself.
Speaker 3: It shows a lot of these options. So I think
Speaker 3: that's a great approach, and I just thank you Mandy
Speaker 3: for caring about this issue and drawing attention to it.
Speaker 3: I just hope for for folks that are concerned about
Speaker 3: it to get more involved, impress their representatives to make
Speaker 3: this an issue that they're going to solve.
Speaker 1: Mike Murphy, I appreciate your time today, and we'll keep
Speaker 1: preaching the same message.
Speaker 3: Thank you, Mandie, thank you for having me