What would you do if you lost 17% of your income? That’s a possibility for people who rely on Social Security benefits.
The issue is that the program’s trust fund is depleting. It needs more funding, and only Congress has the ability to make that happen.
On June 19, KSAT12 and AARP Texas held a panel discussion to understand what’s at stake and what we can do to protect the program.
Here are the five main takeaways from the discussion (see all the takeaways in one video at the top of this article):
Why is the Social Security trust fund being depleted?
Social Security released their annual reports and if Congress does nothing to shore up Social Security’s finances by 2035, there could be a possible cut of 17% cut in benefits.
For example, if individuals who receive about $1,500 a month, they would only receive about $1,245 a month. This all relates back to the Social Security Trust Fund.
According to Dr. Dennis Jansen, Economics professor at Texas A&M University, when an extra amount of payroll taxes is collected, it gets put into the trust fund like a savings account. Therefore, it accumulates some savings.
When Social Security is worth more than the collected tax revenue, then the trust fund gets drained. The fund will continue to be used until about 2034-2035.
“Under current law, Social Security can only be able to pay benefits equal to what’s available from incoming payroll taxes. There’s no trust fund to draw on, and that’s the cut that you talked about,” Dr. Jansen said. “This is a pay as you go system.”
What are the biggest struggles for Texans and how can Social Security help? Who will be impacted the most with Social Security cuts?
According to Marisa Bono, CEO of Every Texan, there is an increase in property taxes and also cost of rent in Texas has been impacted.
“People who are poor and people of color are going to be the major, are going to bear the brunt of that cut, and as I’ve indicated you have the poverty rates already 125% or lower where about more than one out of every five persons of color,” said Dr. Rogelio Saenz, UTSA professor in the Department of Demography. “Latino, African American, American Indian, Alaskan native, we’re talking about one out of every five individuals being in poverty compared to about 10% for the white population.”
How can Congress keep Social Security Solvent?
People have recommended raising the retirement age or lifting the cap on the payroll tax which would make the highest earners pay more than current payroll tax and it is capped at $168,600.
Dr. Jansen said to increase revenue, which means raising taxes and faces some benefit cuts.
How can Americans get involved and keep Social Security solvent?
“Be informed, talk to other people that aren’t here today,” Jansen said. " We mentioned earlier that you’d like a broad movement that brings some sort of pressure on our elected officials.”
How can challenges with Social Security unite us?
With challenges with Social Security, to be united Dr. Saenz said interaction with youth is also important.