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The US Treasury is projecting that the Social Security system will not be fully funded within a decade which means that recipients will not receive 100% of their benefits, but rather only 89% of what they currently enjoy. It is necessary to make positive changes either to the funding or to payout limitations. This idea has been kicked around for decades, but if our legislators had the will and foresight to make these difficult decisions twenty years ago, we wouldn’t have to make the sizable changes necessary to shore up Social Security and Medicare now. I recommend funding Social Security/Medicare by increasing the withholding to both individual and employers’ tax from the combined 7.65% to 8%. I propose no cap on the tax. Currently, individuals who make over $168K do not fund this tax, and employers are also not subject to the tax. An additional 15.3% (current) or 16% (proposed) for roughly the top 10% of earners will have an immediate impact on funding Social Security.
In addition, I propose a tax on all minerals mined on federal lands. This will diversify the future funding of Social Security as we transition to a country that works less than a 40 hour week.
Critics might argue that higher taxes could disincentivize work or burden businesses. However, the long-term benefits of a well-funded Social Security system—such as stability in retirement planning and reduced poverty rates among seniors—outweigh these concerns. By ensuring that Social Security remains robust and secure, we can support future generations and uphold the promise of a reliable safety net.
The following is the 2022 US Treasury Report on Social Security
Trustees Report Summary (ssa.gov)
The Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs each year. This document summarizes the findings of the 2023 reports. As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues.
Based on our best estimates, this year's reports show that:
Since last year's reports, projected long-term finances of the OASI and the OASDI Trust Funds worsened due to the Trustees revising down the expected levels of gross domestic product (GDP) and labor productivity by about 3 percent over the projection window. The Trustees made this change as they reassessed their expectations for the economy in light of recent developments, including updated data on inflation and U.S. economic output.
Despite the downward revision to economic assumptions, the projected long-term finances of the HI Trust Fund improved since last year’s report. The improvement is mainly due to lower projected health-care spending stemming from updated analysis that uses more recent data.
SMI Trust Fund expenditures for Medicare Part B as a share of GDP are also projected to be lower than previously estimated in part for the same reason. In addition, expenditures on drugs under SMI in Medicare Parts B and D are projected to be markedly lower as a share of GDP due to the impact of provisions of the Inflation Reduction Act, which became law in August 2022.
Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. We urge Congress to consider such options for both Medicare and Social Security, like the proposal for Medicare in the President’s FY24 Budget. With each year that lawmakers do not act, the public has less time to prepare for the changes.
By the Trustees:
Janet Yellen,
Secretary of the Treasury,
and Managing Trustee of the Trust Funds.
Xavier Becerra,
Secretary of Health and Human Services,
and Trustee.
Julie A. Su,
Acting Secretary of Labor,
and Trustee.
Kilolo Kijakazi,
Acting Commissioner of Social Security,
and Trustee.
Phone: 860-563-8292
Email: matt@matthillforsenate.org
Address: Box 377 W. Burke, VT 05871