(Radio Iowa) – Without action by Congress, Iowa Senator Chuck Grassley says Social Security recipients will face a deep reduction in benefits late in 2032. Grassley, a Republican, is chairing a Senate Finance Subcommittee hearing Wednesday on the future of Social Security. With our population aging and the birth rate dropping, he says we face a quandary.
“The 1936 law says that when there’s no surplus in the Social Security Trust Fund, that you can only pay what that money brings in,” Grassley says. “That would reduce 100% down to 78%, is what I’m told by the trustees.” Given the wage cap, the federal government stops collecting Social Security taxes after a person’s earnings hit a certain amount, which is now 184-thousand-500.
Vermont Senator Bernie Sanders says because of that cap, trillionaire Elon Musk pays as much into Social Security as someone making 185-thousand dollars a year. “To listen to Senator Sanders, saying people like Musk and taxing him more can take care of all the problems in Social Security — that’s dreaming,” Grassley says. “That can help, but we also need to change the formulas that work.” Grassley says the age at which Social Security benefits can be taken may also need to be raised.
Without action, various studies project the Social Security trust fund could be exhausted by 2034 or 2035. “All of these things you see on television, the AARP says, ‘Don’t touch Social Security,'” Grassley says. “Well, what they ought to be advertising is, if you don’t touch Social Security, everybody receiving Social Security in 2032 is going to get a cut.”
Grassley credits the 1983 compromise between President Ronald Reagan and Democratic House Speaker Tip O’Neill, which led to a temporary fix for Social Security that’s already lasted more than 40 years. He says new “vision” is needed to find another lasting fix.
