AARP: Federal Leaders Need To Fix Social Security

Social Security began 91 years ago when President Franklin Roosevelt signed it into law. Since then, it has provided a social safety net to Americans, allowing many of them to retire with dignity, according to John Hishta, senior vice president of Campaigns with AARP.  

But many experts say that without some action, social security benefits will have to be reduced by 20% in 2032. 

News Director Eric Douglas sat down with Hishta to understand the situation.  

This interview has been lightly edited for clarity.  

Douglas: Where do we stand with Social Security? What’s the situation?  

Hishta: First of all, Social Security is in good shape. However, it’s going to run out of what’s called reserve funds as part of its trust fund by the year 2032. What that means, in essence, is that if Congress and the new president don’t find some solutions, then everybody who is currently on Social Security would get a 20% benefit cut. And so we want to make sure over these next several years that there is a lot of conversation about this, that there’s open debate about this, and that ultimately leads to a solution for the long-term solvency over the next, say, several decades. 

Douglas: What do you want done? What’s the way to solve the problem? 

Hishta: What we don’t want done is any cuts to benefits for folks. The second thing we don’t want done is to see the retirement age raised. We believe 67 is appropriate, particularly for folks working physical jobs that can’t make it much beyond 67. And then what I would also say is we’re totally opposed to any kind of privatization of the program.  

It is in its 91st year. It’s been immensely successful. It just needs to get creative and find some new revenue in order to close that gap.  

One option is to raise the current income cap. Right now, anybody who makes over $184,500 a year stops paying Social Security taxes at that level. If they lift the cap, that in essence could solve the funding issue for the next 40 or 50 years as an example. There are other ways that you could look at bringing in revenue that could get creative, but that’s what we want to see the debate be about. For folks to come to the table, bring ideas that could generate revenue, and at the same time prevent cuts for folks, not just for this generation, but for future generations as well. You pay into it, I pay into it. Anybody as young as 16 pays into Social Security. That’s a promise we need to keep to the American people over the next several decades. 

Douglas: Do you have any kind of thoughts on the state, how it will affect West Virginia? 

Hishta: Oh, it’s huge. One in four West Virginians are on Social Security, whether it’s retirement or disability. That is a large number – 150,000 folks who are on Social Security right now are lifted out of poverty because they get Social Security benefits. Think of the strain on the system just in West Virginia if those folks didn’t receive those benefits. The average benefit in West Virginia is only around $2,000 a month. It’s not a whole heck of a lot to live on. Fortunately, it’s there and it’s solid. The days of pensions, of other retirement savings, it’s really tough for folks.  

One of the statistics I like to use, this is more nationwide, but I’m sure it’s applicable here as well, upwards of 40% to 45% of the American workers have no access to a retirement savings account, which is just stunning when you think about how important then Social Security is.  

It adds $10.6 billion to the West Virginia economy annually. And so it’s not only an economic engine driver, it keeps people out of poverty, allows people to retire with some dignity and live a decent life. And so that’s what we’re trying to make sure it continues in that form over the next several decades. 

Douglas: Are we talking about lifting the cap entirely to just no cap? 

Hishta: You could do it a number of different ways. You could lift it entirely. You could create a donut hole. I mean, the numbers would change, obviously. You could do a donut hole where from $200,000 to $400,000 you don’t pay any social security taxes, then above $400,000. As a society, we’ve also changed a lot from when this program was originally put into place. There wasn’t as much investment income. There wasn’t as much passive income. None of that is taxed for social security.  

The other problem we’re faced with is a demographic problem. I mean, when the program originally started, five workers for every beneficiary existed. Now it’s down to like two workers for every beneficiary. And so I think that there is a lot of conversation around how you change things up. But the bottom line is Congress just needs to come together in a bipartisan way to pass some sort of law that allows for this to extend.  

Douglas: What have we missed? 

Hishta: We’re trying to also encourage folks to join this fight, if you will. And I would say go to aarp.org/socialsecurity and that gives you an opportunity to learn more about the program as well as efforts to engage with your public officials, whether in Congress or the Senate. Because frankly, we’re trying to build a large grassroots army so that we can participate in this debate over the next several years and make sure that the program is sustainable for the long run.  

Think about it this way. If you’re elected to the United States Senate this year, you’re going to be directly engaged in this debate. If you’re elected as president in 2028, you’re going to be engaged. You have to show presidential leadership. So we really want people to make sure they ask their congress women and men and their senators, and those who are running for those offices to tell us what their solutions are for Social Security. Because the American people deserve that. They need to know exactly what is promised. 

Douglas: Say we get a fix before 2032, but it’s more of a kick the can down the road than a true rebuild. What’s the future of the program? 

Hishta: I would say failure is not an option. These guys, men and women [in Congress], need to come together and show the courage to do the right thing. The last time there was a major change to Social Security was in 1983. It has been a long time coming. It is the most important issue for a lot of voters, particularly those who are older, when it comes to electing their representatives and their senators. And so I believe that with the right push, Congress can come together and with the right leadership at the top, with the new president, they can come together and they can come up with a solution that extends it for the foreseeable future.  

There’s been some desire by those in the Senate and the House to form commissions, congressional commissions, which would include outside folks to make recommendations on what to do. We’re adamantly opposed to that. Our answer to that is, you’re elected to make big decisions. You’re elected to legislate. So you ought to do your job and not rely on commissions.