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AUTHOR: R Quinn on 8/22/2025
I say it does, but that does not stop it from being attacked. The words Ponzi Scheme are being thrown about. The fact it is underfunded is being used as a argument that it doesn’t work. Some in government are calling for it to be replaced with private accounts. I read one official say there is plenty of money to pay all the benefits to those now collecting, but we can’t continue. Well, that’s not true on either point.
No doubt Social Security is underfunded, but that is the fault of every Congress since the 1990s and of the Americans they fear will not support higher taxes or other changes. That is not a valid reason to claim the system can no longer work.
It’s true the worker to retiree ratio is shrinking-fewer workers to support a growing number of retirees and that needs to be considered as well and can be over time by increasing the tax paying base – another discussion about what we are doing to our workforce.
The irony is that making Social Security sustainable requires relatively minor changes and increases in funding. If changes had been made gradually over the years, they would hardly be noticed. For example, today just increasing the payroll tax by 3% (1.5% each on employer and worker) and applying FICA to employer cafeteria plans results in 97% of funding covered for the next 75 years (Committee for a Responsible Federal Budget SS calculator.) That amounts to about $17.00 a week for the median wage earner – meaning half would pay less. That seems a small price for future retirement income. The increase would be considerably lower had it been applied ten years ago.
The challenge now is a general anti-government anti-tax ideology in favor of individual empowerment and responsibility.
What’s missing is a realistic understanding of human behavior- in this case related to finances and long-term planning. Americans are not even adequately saving and managing money for their share of retirement income, let alone all the required income.
I used to joke that there was no reason to worry about Social Security, it will always be there. My confidence is waning.
QUINNSCOMMENTARY 
After 50+ years of payments into Social Security, I expect the agency to honor its promise to provide me and my wife with income.
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Unfortunately, the promise that was made was that Congress could do whatever it wanted to do. The promise was never contractual and you and I should never have relied on the promise, whether the one in place prior to 1983, or even the one after 1983. Congress can make any change it wants or terminate the program tomorrow.
Worse, whether President Biden/Vice President Harris or Trump was elected in 2024, they were no different than the Presidents that preceeded them.
See: The Biden-Trump Plan to Cut Social Security: Doing nothing won’t protect beneficiaries. It’ll subject them to automatic 23% cuts in 10 years. https://www.wsj.com/opinion/the-biden-trump-plan-to-cut-social-security-mccarthy-debt-ceiling-payroll-tax-automatic-trust-fund-6a6c7586
See my prior post for the last 30 years of history over known funding shortfalls.
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You say: “He has promised to preserve SS, yet during his first term and today so far has done nothing, no suggestions, no push for Congressional action.”
Response: Trump has same plan as Biden and Obama and Clinton and Carter – promise to safeguard SS and kick the can down the road so it becomes someone else’s problem (unlike Reagan and George W. Bush). Not sure about Trump 2. My bet is that he will introduce something so he san “save” Social Security. At worst, Trump 1 and Trump 2 are no different than Obama and Biden. See: the Biden-Trump Plan to Cut Social Security by DavidMMcintosh https://www.wsj.com/opinion/the-biden-trump-plan-to-cut-social-security-mccarthy-debt-ceiling-payroll-tax-automatic-trust-fund-6a6c7586?
You say: He made the funding worse with the tax changes.
Response: No, he did not. The two major changes are no tax on tips and no tax on overtime. The “No tax on tips” and “No tax on overtime” provisions authorize eligible individual workers to deduct qualified tips and overtime pay from their federal taxable income for 2025–2028, but Social Security and Medicare taxes still apply.
And, where was your criticism of President Biden, with his Social Security Fairness Act, which gave benefits to public employees in a clear giveaway to buy votes – people who had wages but paid NO FICA or FICA-Med taxes.
You said: At the same time he is following the project 2025 playbook in many ways. Regarding SS, that’s raising the FRA to 69 and partial privatization.
No. What legislation has Trump had Congress introduce that would raise the Full Retirement Age to 69 or to partially privatize Social Security?
First you say he is doing nothing. Then you mistakenly say he is cutting funding via the Big Beautiful Bill. Then you say, he is cutting benefits and privatizing Social Security.
Which is it ????????? None of the above.
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As Jack says, there has been tampering with the program over the years and a refusal to make Social Security a true retirement plan. Toss in the declining birth rate and the stagnant wages of the great mass of workers paying in and you get perpetual problems. Increased longevity adds even more to the cost.
I gave up following much about the funding but I have noticed that some calculations raise the 3.5% needed up to as much as 3.84%. That is not a trivial bite out of somebody making say, 20 bucks an hour.
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To make it solvent you need a total 3% increase half ee/emp. 1.5% added to average earnings is pretty minor for a future secure retirement. That also means the individual does not have to save as much on their own-which of course too many are not doing adequately now.
There is also the possibility of making it two thirds on the employer.
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Again, I’ve shared how I would “fix” the Social Security funding issue, today and indefinitely, with first identifying the funding everyone (all lives in being) should have made had we fully funded/made Social Security sustainable, then give each American a choice on how to fill the funding gap, either a benefit cut or an increase in taxes or a combination of the two, loading the choices for antiselection, with annual self-correcting price tags, freezing the plan design into a contract among American citizens. That would have everyone who is in the system “correct” for past underfunding – leaving the existing Socialization (progressive formula, etc.) unaffected.
And, I know the best option for the idiot ass Trump – political animal that he is. Wait until the time to approve the 2028-2029 federal budget, once the D’s and the R’s have their nominees for the November 2028 election. Then Trump would refuse to sign into law the federal budget, or sign a continuing resolution, until Congress agrees to increase FICA taxes from 12.4% to 16.4%, allocated 6.2% to workers, 10.2% to employers. The same legislation would also cap FICA Wages at $100,000 (for taxes and benefits) starting in 2029. So, the 4% tax increase is one workers won’t see, and the $100,000 cap on FICA wages is a phased in benefit cut that only affects higher earners.
Go ahead, take my two recommendations, one that is actuarially sound, the other politically savvy, and send them to YOUR congressman and senators. I’ll match mine up against theirs anyday.
But, shut up in your criticism of the idiot ass Trump when it comes to Social Security funding. He’s no worse than the folks who preceeded him, including Trump 1 – and is no different than Biden/Harris, Obama or Clinton. Yes, at least George W. Bush was recommending action – not lying to us.
https://www.wsj.com/opinion/the-biden-trump-plan-to-cut-social-security-mccarthy-debt-ceiling-payroll-tax-automatic-trust-fund-6a6c7586
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He has promised to preserve SS, yet during his first term and today so far has done nothing, no suggestions, no push for Congressional action. Only more words like many other things, words. He further undermined confidence in the system through DOGE nonsense and claims.
He doesn’t even display a basic understanding of how it works, nor does he care. He made the funding worse with the tax changes. Nothing is coordinated.
At the same time he is following the project 2025 playbook in many ways. Regarding SS, that’s raising the FRA to 69 and partial privatization.
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“Does Social Security Work?” No, not as designed. It is supposed to be a program that successfully, confidently shifts wealth from people working today to people who are retired today.
The only way to remove your concerns about sustainability was to truly fund the program as if it were a pension plan – a legal, enforceable contract among American generations.
Even though President Roosevelt said he would have preferred a funded, sustainable system, he signed off on pay as you go funding.
Because Social Security is an entitlement, it can be amended at any time. Our history is that Congress has improved benefits a number of times without agreeing to taxes sufficient to cover those costs. So, Congress knows it can improve benefits for some, without raising taxes on others, as a means to buy votes.
President Carter created benefits indexing based on wages, and an automatic COLA that required, obviously, dramatically greater funding than the Democrats were willing to implement. They crapped all over the pay as you go program, to buy votes.
Enter dramatic underfunding, and just six years later, the 1983 Amendments. Despite those changes, the actuaries knew we had a long term funding deficit.
Since then, starting with President Clinton, 30 years ago, we’ve been talking about underfunding, commissioning study fter study, when what we needed was action. When Republicans proposed action 20 years ago by allowing folks under age 55, to voluntarily invest up to one third of their future taxes in mutual funds approved by the government, Democrats charged Republicans would put: “Americans at risk of losing their retirement savings with the ups and downs of Wall Street.” … As if there were individual accounts and actual savings, accumulated assets. What if we had taken that action?
https://aei.org/wp-content/uploads/2025/06/What-If-George-W.-Bushs-Social-Security-Reforms-Had-Passed.pdf?x85095
Ot, soon thereafter, when Republicans proposed changes to shore up Medicare, the Democrats created ads that showed them pushing grandma in a wheelchair over a cliff.
https://www.youtube.com/watch?v=OGnE83A1Z4U
The tension, the stress, the potential for increased taxes and/or reduced benefits is not a bug of the Social Security system, it is a feature for politicians to buy votes by “protecting the Social Security benefit you earned”.
Guys, it is an entitlement. By definition, you never earned it. They lied. They continue to lie.
When folks say you only need just this small amount of tax increase to make the system solvent, they forget that the majority of American workers, those paying payroll taxes (FICA and FICA-Med) do not fully fund their own benefits. As Dick has said so many times, the majority of folks recover the majority of their nominal “contributions” relatively soon after benefit commencement. That is, any increase in taxes needs to be heavily concentrated/shouldered by above median income taxpayers to keep the wealth redistribution going. And, just as important, Congress is certainly willing to increase taxes and reduce benefits, a la 1983, which essentially sends much of the bill to people too young to vote and generations unborn.
Why not gradually return Social Security to its original intent, to offer a base level of income – perhaps capped out at 200% of poverty level – instead of continuing down the path where it looks more and more like an unfunded, middle class pension.
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Al Lindquist
great response Jack–appreciated per usual–just another unfunded government program with the usual folks wanting to raise taxes to pay for it.
I always wondered how folks can get back their contribution and I assume the employer contribution in a short period of time when the money has not been invested–slowly moving to a private system for a good % of retirement makes sense to me–but that is anathema to folks who want to control our lives.
Again, thanks for making us think with facts, dates, and your opinion.
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