“They are in a nowhere zone on policy,” says Andrew Biggs, resident scholar at the conservative American Enterprise Institute think tank, and a former deputy commissioner of the Social Security Administration during the George W. Bush administration. “In response to Democratic proposals to expand Social Security and raise taxes, Republicans will say, ‘We don’t want to raise taxes, and we don’t want to cut benefits, either’ — as though there are other options.”
How urgent is the problem?
The public already is pessimistic about Social Security’s future. A Pew Research Center study released last March found widespread worry among today’s workers about the program’s future — 83 percent expected benefit cuts by the time they retire, and 42 percent did not expect to receive any benefits in retirement.
The public worry is understandable, but out of proportion, says Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a left-leaning think tank. “The odds that benefits are going to disappear are as close to zero as possible,” he said. “But the continual talk about the financial problems leads people to worry excessively about it.”
Despite public sentiment and trust fund projections, the next president and Congress may not feel pressure to act during the next four years. Much will depend on the balance of control in Congress and the White House.
“The more power Democrats have, the more likely it is that there will be action,” said Ms. Altman of Social Security Works. “If Republicans stay in power, they will try for a bipartisan solution, but Democrats won’t go for it.”
If the problem is not solved before the 2035 depletion date gets near, experts note that odds will favor restoring solvency to the trust funds with new revenue — rather than benefit cuts.
That is because any benefit cuts almost certainly would not be applied retroactively to current beneficiaries, Mr. Van de Water said. “That means the cuts could only apply to new beneficiaries, with the possible exception of a less generous C.O.L.A., which would affect people receiving benefits now and in the future,” he added.