Looking Back 40 Years When Policy Trumped Politics

Q: How was Social Security saved 40 years ago?

A: A bipartisan commission created in 1981 by Congress and President Ronald Reagan set aside partisanship for the public good to save Social Security. Back then, the public retirement program was heading for fiscal insolvency. Specifically, the Old-Age and Survivors Insurance Trust Fund would have run out of money if no changes were made. Monthly benefits for Social Security recipients hung in the balance. Reforms were hammered out in good faith to preserve the social safety net for retirees for the next half-century. On April 20, 1983, President Reagan signed bipartisan legislation into law that included the support of then-Senator Joe Biden and myself. It was a consequential vote that required lawmakers and the White House to put policy ahead of politics. As President Reagan noted: “With bipartisan cooperation and political courage, Social Security can and will be saved. For too long, too many people dependent on Social Security have been cruelly frightened by individuals seeking political gain through demagoguery and outright falsehood, and this must stop. The future of Social Security is much too important to be used as a political football.”

The same can be said this very day.

Back then, Congress and the White House acted with political courage, punting politics to the backseat to put Social Security on solid financial footing. In March, the Social Security Board of Trustees issued its annual audit with yet another wake-up call to policymakers. Keep in mind, the board is comprised of President Biden appointees, including members of his Cabinet. It estimates that once the trust fund is depleted in 2033, existing revenues would cover only 77 percent of benefits. That means, with no changes in law, recipients across-the-board would face a 23 percent cut in monthly benefits. The longer policymakers push off reforms to extend the solvency of Social Security, more drastic measures impacting taxes and benefits would be required to restore the fiscal integrity of this social safety net.

Q: How is Social Security funded?

A: Social Security has served Americans since the program was signed into law by FDR in August 1935. Last year, 57 million retirees and survivors received monthly benefits and 9 million people received benefit payments from the disability trust fund. More than 180 million workers paid into the Social Security trust funds. Employees pay a 6.2 percent contribution that employers match. The self-employed pay the full share of the 12.4 percent payroll tax. Social Security is part of the social fabric of America. It is incumbent upon the president of the United States to take the leadership reins and set aside partisan grandstanding to ensure its solvency for generations to come.

Q: What’s your message to the Biden administration?

A: At a committee hearing earlier this year, I pressed the Secretary of Treasury about the Biden administration’s plan to secure the program’s financial solvency. The Social Security Board of Trustees, of which Secretary Yellen is a member, recommended that imminent fiscal shortfalls be addressed sooner rather than later. History shows?—?with the bipartisan cooperation four decades ago between President Ronald Reagan and House Speaker Tip O’Neill?—?that it’s possible to save Social Security if partisanship is set aside. President Biden knows it. He voted for it. And yet, as president, he has refused to take the lead. Putting short-term political interests in the driver’s seat puts the best interests of taxpayers, retirees and future generations in the back seat.

What’s more, the Biden economy’s soaring inflation and rising interest rates have pumped the brakes on economic productivity. That reduces revenue coming into the Social Security trust funds. President Biden fueled the fires of inflation with multi-trillion dollar spending sprees on top of trillions of pandemic relief dollars already in the pipeline.

In April, I held 24 county meetings across Iowa, including Q&A’s with hundreds of students at six high schools. I make it a priority to meet with young people to encourage their participation in government. We owe it to the next generation to fix the nation’s fiscal mess. It’s unacceptable that President Biden’s budget builds on a reckless record of fiscal irresponsibility that kicks deficit-spending into high gear and kicks the can down the road on Social Security. As ranking member of the Senate Budget Committee, I’ll continue working to restore fiscal discipline. Washington must get serious about paying down the $31 trillion debt, reining in deficit spending and ensuring our children and grandchildren can count on Social Security when they reach retirement.