Social Security has been a political football in the U.S. since the 1970s, but there was a Super Bowl-caliber showdown a few weeks ago that tipped the score in favor of the nation’s elders. At the State of the Union address, President Joe Biden accused Republicans in Congress of plotting to eviscerate the 87-year-old program (which they have been, for years, and everybody has the receipts), saying “if anyone tries to cut Social Security, we’re going to stop it. If anyone tries to cut Medicare, we’re going to stop it.”
What gave Biden the edge? The clown-car wing of the GOP, most memorably Marjorie Taylor Greene dressed like a baby harp seal yelling “Liar!” when Biden fired off his accusation, thereby shutting down the Republican dream of cutting or destroying what they like to refer to as “entitlements” — at least for the moment.
But for most of the 48.6 million older Americans who receive Social Security checks, it’s a different kind of game, one that causes stress levels to rise whenever those inside the Beltway start tossing the ball around.
If you’re not wealthy and you’re over 62, these are the things that will keep you up at night…
• For starters, the Great Recession of 2007-09 destroyed $3.4 trillion in retirement savings.
• It’s estimated that Social Security’s cash reserves will run out between 2033 and 2035.
• The average Social Security benefit is $1,688 a month. Median rent for a one-bedroom apartment in the Springs right now is $1,192.
• In 1983, Congress voted to start taxing Social Security benefits. They established $25,000 — figured as adjusted gross income plus half of the taxpayer’s annual benefit — as the first threshold, requiring income tax payment on 50 percent of the benefit. In 1993, Congress added a second threshold, $34,000, at which recipients would pay tax on 85 percent of their benefit.
Unlike other components of the program, those thresholds were never linked to inflation and remain the same today (though in 1983, the median family income was $24,580 and a dozen Grade A large eggs cost 89 cents). The system was designed so that as salaries increased over time, ever-growing numbers of older workers would return ever-growing amounts of their benefits to the government. Today, 56 percent of recipients pay taxes on their benefits.
While the 2023 cost-of-living increase, designed to help offset high inflation, was a very welcome 8.7 percent, it increased the amount working seniors will have to return as taxes — in addition to the Medicare and Social Security taxes deducted from their salaries.
• But given that we’re living longer, and the money can only stretch so far, most of us are probably resigned to all of this … until we come to that little wrinkle called the “taxable maximum,” which this year sits at $160,200. Anything earned beyond that is not subject to Social Security payroll tax, meaning millionaires will stop paying into the program a couple weeks from now. Just imagine how much Elon Musk has been saving all these years.
Lifting that cap is at the heart of the Social Security Expansion Act that Bernie Sanders and Elizabeth Warren introduced in the Senate on Feb. 13, designed to extend the program’s solvency for another 75 years. Doug Lamborn would hate it, but Republicans only have a four-vote majority in the House. It could happen, right?
• Our last nightmare, sorta like Ebenezer Scrooge’s, comes from The Guardian: “Over the next decade, the number of workers ages 75 and older is expected to increase in the US by 96.5 percent, according to the Bureau of Labor Statistics, with their labor force participation rate projected to rise from 8.9% in 2020 to 11.7% by 2030, a rate that has steadily increased from 4.7% in 1996.”
We hear gummies can help you sleep.