Rubio Confronts Long-Term Debt Crisis Calling for Social Security Reform
As he desperately seeks a victory next week in Florida’s critical GOP primary, Sen. Marco Rubio (R-FL) seemingly opted for responsible fiscal policy over smart politics in Thursday night’s Republican presidential debate in Miami.
While Republican frontrunner Donald Trump pandered to millions of seniors in the Sunshine State by declaring that Social Security reform would be off-limits in a Trump administration, Rubio under sharp questioning by a CNN moderator spelled out his plan to avert the long-term bankruptcy of the national retirement program while exempting current retirees from the effects of his cuts.
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Social Security has long been known as the Third Rail of Politics – touch it and you die. Spending last year on Social Security benefits totaled $877 billion, or nearly a quarter of all federal spending. The Congressional Budget Office projects that –absent significant changes in policy – the Social Security retirement and disability insurance funds taken together will be exhausted in 2029, requiring a 29 percent reduction in benefits from the scheduled amounts.
Many seniors’ advocacy organizations and liberal Democrats take a hard line against any tampering with the program – whether in the short-term or long term. And Sen. Bernie Sanders of Vermont, the Democratic presidential candidate, is pushing for a major expansion of Social Security benefits financed by an increase in the federal payroll tax.
“I will do everything within my power not to touch Social Security – to leave it the way it is, to make this country rich again, to bring back our jobs, to get rid of deficits, to get rid of waste, fraud and abuse, which is rampant in this country,” Trump said during the debate.
Trump has spouted this nonsense before that he could slow the growth of the national debt by eliminating waste, fraud and abuse in Social Security and other spending programs without changing the basic benefits structure or retirement age. The Committee for a Responsible Federal Budget notes, however, that even if the Social Security system could stop all improper payments, that would save only $3 billion of the $150 billion of savings that will be required in the coming decade to render Social Security solvent.
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“The bottom line is we can’t just continue to tiptoe around this and throw out things like, ‘I’m going to get at fraud and abuse,’” Rubio said last night. “You still have hundreds of billions of dollars of deficit that you’re going to have to make up. And here’s the thing: If we do not do it, we will have a debt crisis.”
Sen. Ted Cruz of Texas and Ohio Gov. John Kasich echoed Rubio’s concerns about the need to address the long-term threat of Social Security insolvency. “Social Security right now is careening towards insolvency, and it’s irresponsible,” Cruz said. “And any politician that doesn’t step forward and address it is not being a real leader.”
Rubio for months has called for reforms to slow the growth of Social Security spending—including forcing younger people to work longer before they can qualify for benefits, but until last night, he was vague as to the specifics. About one in five Florida residents – or about four million people – receive retirement benefits, and survivors and disability insurance through Social Security.
Under the current law, the retirement age for full Social Security benefits is 67 for people born in 1960 and thereafter. People who retire earlier receive lower benefits.
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Under questioning by CNN’s Dana Bash, the 44-year-old Rubio said, “Someone my age would retire at 68 . . . We'd allow the retirement age to increase until it hits 70, so my children would retire at 70."
Rubio has also said he would slow the rate of growth of benefits for wealthier seniors and abolish the retirement earnings test, which he complains discourages older Americans to keep on working while doing nothing to address the long-term solvency of Social Security.
Rubio says he would also open up the federal Thrift Savings Plans to non-government workers. That program is similar to a 401 (k) program and invests in an array of stock and bond mutual funds, and not merely the types of government bonds held by the Social Security Administration.
On the Democratic side, Sanders and former Secretary of State Hillary Rodham Clinton are vowing to protect and even expand on existing Social Security benefits and dismiss calls for reforms as an unwarranted conservative attack on a program that serves as a lifeline for many middle- and lower income senior citizens.
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Sanders has called for increasing benefits by an average of $65 a month, beefing up cost-of-living adjustments and boosting the minimum benefits for low-income seniors. He would finance these expanded benefits while keeping the program solvent for another 50 years by raising the amount of earnings that are subject to the federal payroll tax that supports Social Security.
For her part, Clinton would preserve the existing system by requiring the wealthiest seniors to contribute more – although she provides no real details on how she would go about doing that. Clinton has said she would also favor expanding benefits for widows and for people who took time off from their jobs to care for their children or for sick family members.
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