In the first 100 days of his presidency, Donald Trump has made good on his promise to protect the Social Security Administration, which serves 61 million Americans. However, a disturbing new statistic just came out proving that Trump needs to do a whole lot more if he really wants to save Social Security recipients.
CNBC reported that experts say that if Congress doesn’t take action soon, benefits will be cut anyway, by at least 23 percent in 12 or 17 years.
The Social Security Trusties report reveals that last year, Social Security paid out $905 billion, almost one quarter of the U.S. government’s expenditures. Since 2010, this program has been cash flow negative, meaning that taxes and contributions no longer cover benefits.
The last person to seriously try to fix the Social Security system was President George W. Bush, who attempted to take action 12 years ago. Since then, very little has been done to fix this problem.
“To help remedy this situation and increase savings in America, we recommend pooled, nationwide Retirement Security Plans for companies with less than 500 employees,” wrote James B. Lockhart III, who co-chairs the Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings. “Small employers could automatically enroll their employees (who could opt out) in a plan run by a well-vetted sponsor. That would relieve small businesses of the costly burden of setting up their own 401(k) and allow them to transfer the legal liability to the sponsor of the pooled plan.”
“After these streamlined plans are up and running, we would require all employers with at least 50 employees to offer some form of retirement option for their employees,” he added. “Importantly, these proposals would dramatically close the coverage gap and, once phased in, they would increase average savings among middle- and lower-income workers by 50 percent, according to the commission’s research. That would be great for the workers and the economy.”
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