September 27, 2024 • 50 mins
On this episode of The Middle we'll be asking a question that's come up a lot in the run-up to the 2024 election: will Social Security be there for you when you need it? We're joined by economist Julia Coronado, president and founder of MacroPolicy Perspectives, and CNBC senior economic reporter Steve Liesman. The Middle's house DJ Tolliver joins as well, plus callers from around the country. #socialsecurity #medicare #taxes #benefits #Trump #Harris #election2024
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Speaker 1 (00:00):
The Middle is supported by Journalism Funding Partners, a nonprofit
organization striving to increase the sustainability of local journalism by
building connections between donors and news organizations. More information on
how you can support The Middle at Listen tooth Middle
dot com. Welcome to the Middle. I'm Jeremy Hobson, along
(00:22):
with our house DJ Tolliver and Tolliver. Before we get
to talking about senior citizens, let's talk about a baby.
A one year old baby named The Middle. We are
a year old as a weekly show as of this week.
Speaker 2 (00:33):
Oh my god, are we even teething yet?
Speaker 1 (00:36):
Are we actually?
Speaker 3 (00:37):
First step, I went, I.
Speaker 1 (00:38):
Went and looked online to see what one year olds
do exactly, and they can say Mama, dada, A lots
of things. I don't know about The Middle or Tolliver,
but anyway, very exciting and we've actually, we'd looked back
over the last year, we've had one hundred panel guests
or more more than ten thousand calls into our system.
We've done each shows on the road, so a lot
a lot happening here and this hour, Tiver, we're talking
(01:00):
about social security, one of the largest items in the
federal budget, but one that doesn't get talked about too
much because changing it is so unpopular. It is funded
by American workers and employers, and people are allowed to
start getting their benefits at age sixty two, or if
they wait, they get their full benefits at age sixty seven.
But of course the baby boom generation has put big
(01:21):
strains on Social Security with so many people retiring at
once and right now, the Trustees of Social Security say
that unless changes are made, big cuts would be necessary
starting in about nine years. So our question this hour
will social Security be there for you when you need it?
And what if any reforms would you like to see.
And we're going to get to your calls in a
(01:41):
minute at eight four four four six four three three
five three. But first last week we asked you what
the value of NATO is to the United States. We
got a lot of interesting callers. Here are some of
the comments that came in after the show.
Speaker 4 (01:54):
Hi, this is Eric, and I am calling you from Canton, Ohio.
Is bad for the United States and probably should not
have existed past nineteen ninety one. There is a great
case to be made for the United States leaving NATO,
and I'd like to make it.
Speaker 5 (02:13):
Hi, my name is Kathy and I'm from Denver, Colorado.
I need to use a football metaphor to make it
very clear. If I'm a football player and I'm being
challenged by a powerful team, let's call that one. I
don't know Jay Russia, and I want to try to
vanquish my opponent, I would say that I would like
(02:34):
to have a team of people rather than me having
to do it all by myself.
Speaker 6 (02:40):
My name is John. I'm calling from Meriden, Connecticut. NATO
serves another function, which is all the disparate members are
much stronger together than would be a part and represent
something to be reckoned with.
Speaker 1 (02:54):
Well, thanks to everyone who called in and you can
hear that entire episode on our podcast in partnership with
iHeart Podcasts, on the iHeart app or wherever you listen
to podcasts. So now to our topic this hour, Will
social security be there for you when you need it?
And what if any reforms would you like to see? Tolliver?
How can listeners reach us?
Speaker 2 (03:12):
They can call us at eight four four four Middle.
It's eight four four four six four three three five
three all right to us that listen to the Middle
dot com.
Speaker 1 (03:19):
So let's meet our panel economist Julia Coronado is the
president and founder of Macro Policy Perspectives. She also teaches
finance at the University of Texas Austin. Julia, Great to
have you on.
Speaker 7 (03:29):
The middle It's my pleasure, Jeremy.
Speaker 1 (03:32):
And also joining us is CNBC senior economics reporter Steve Leisman,
perhaps the first person in America to know what the
Fed is going to do every time they meet. Steve.
Great to have you with us as well.
Speaker 3 (03:43):
Great to be here, Jeremy, Thanks for having me.
Speaker 1 (03:45):
Well, before we get to the phones, let's start with
the importance of this program, Julia Coronado. Experts say that
without it, twenty two million adults would fall below the
poverty line. So, especially for our younger listeners, for whom
social security may be a term that they hear but
don't exactly know what it is. Why do we need
social security?
Speaker 8 (04:04):
Okay, so I will be the bearer of some good news, Jeremy. So,
first of all, social security should not be thought of
as government spending or a government spending program. It is
a social insurance program. We take money out of young
people's paychecks to provide a steady, guaranteed payment to older people.
(04:25):
In their retirement years. So it is a transfer from
one group of households to another. It is not the
government spending money, it is you spending money. You get
to choose what to do with that money. That's number one.
Number two is you know, it really is pretty easy
to fix Social Security Right now, these scheduled taxes will
(04:47):
pay more than three quarters of all benefits. So if
we were forced to balance the program today, yes there
would be some cuts, but most of the benefits are
already slated to be paid for. So the changes we
need to make to the program to balance it are
not that huge, and we can get into the specifics
(05:09):
if you are interested. But I think there's a couple
of very simple reforms that would put it right in balance,
and they would protect the people that rely on it
the most well.
Speaker 1 (05:21):
So if it is so simple to fix it, Steve Lisban,
why is it such a third rail in American politics
that nobody really wants to make the hard choices and
make the tough changes to Social Security to keep it
solvent in the long term.
Speaker 9 (05:35):
It's politics, It's I mean, Julia's right. The economists could
fix it overnight. You put three of them in a
room and they could come up with a variety of revenue,
benefit and eligibility rules, and you could put it on.
Speaker 3 (05:49):
A pretty pretty good safe course for many decades.
Speaker 9 (05:54):
But it's politics and the way it's demagogue and I
just want to say one thing that's important, I think
to your viewership is that the wrong people in the
public are engaged in this debate. The people who care
a lot about social Security are the people who are
receiving it right now, and they are politically almost no
(06:15):
danger at all of having their benefits cut or their eligibility.
Speaker 3 (06:20):
It's the young folks.
Speaker 9 (06:21):
That are going to get this or they're going to
be affected by any changes to Social Security, and most
of the polling that I've seen shows they're almost not
involved in the.
Speaker 3 (06:32):
Issue at all.
Speaker 9 (06:33):
So, if you're young and listening to this program, other
than the fact that it helps Jeremi's demographics, when it
comes to when it comes to the listenership, ye get
engaged in this issue because it's important.
Speaker 1 (06:48):
I've got news for you, Steve. Every show that we
have in Tolliver will vouch for this. There are people
under twenty five that call and sometimes under twenty that
call in and I'm putting a call out to you
right now if you are twenty and under thirty under,
I want to hear from you this hour. But why
don't we get to a caller on the line. Here?
Kate is in Fort Collins, Colorado. Kate, welcome to the middle.
(07:08):
Go ahead your thoughts on Social Security?
Speaker 10 (07:11):
Hi, Yeah, I'm not one of those that are under thirty.
I'm already collecting Social Security and it just seems like
you keep hearing that it's going to end in nine years.
And in nine years I'm going to be in my
mid eighties, and it scares me to death that it
(07:32):
won't be there, and that the increases every year don't
match the rate of inflation. It seems like my husband
and I have to cut back more and more every
year because the jump in our yearly benefits is just
(07:53):
a few dollars.
Speaker 1 (07:55):
And would you like to what would you like to
be done to it?
Speaker 3 (07:59):
Kate?
Speaker 1 (08:00):
What do you think would be a reform that would
help keep it solving in the long term for you
and others?
Speaker 10 (08:06):
Well, I really think that if people, both people in corporations,
paid the taxes that you know that they should be paying,
that Social Security could easily be funded I heard heard
it's somebody is saying it's a simple solution and it's
(08:28):
mostly politics, but something has to be done so that
more people are are paying more into it. And yet
the young people that are you know, are now paying
into it, have it available for them like, you know, like.
Speaker 1 (08:49):
When they when they retire. Yeah, Kate, thank you. Let
me take that to Julia cornado U. And you know,
one of the things you talked about there was taxing
people more. This is one of the big solutions that's
out there for Social Security is you know, right now
it's like one hundred and sixty eight thousand dollars up
to about one hundred and sixty eight that you get
taxed on. But some have said just keep going beyond
that or maybe to a whole until four hundred thousand
(09:12):
of income and then take it after that. But what
do you think about that?
Speaker 7 (09:15):
That's the easiest reform.
Speaker 8 (09:17):
So, first of all, I really hope that Kate doesn't
lose sleep over this. It will be there when you
are eighty ninety ninety five. May you live long and prosper,
and it will be there. Nobody is talking about cutting
benefits or even you know, even proposals like limiting the
cost of living adjustment, that's just simply not politically going
(09:38):
to happen. But what Jeremy you just mentioned that is
the most commonly favored reform. So right now people pay
pay taxes, as you mentioned, up to one hundred and
sixty eight thousand, six hundred in their income, and lifting
that cap so that you pay the Social Security tax
on all of your wages salary income. That would close
(10:02):
three quarters of the gap. That really is the easiest reform.
The people that can afford it the most would pay
the most, and no benefit cuts necessarily. Now that, of course,
you still have a small gap, so you can also
make some adjustments to the benefit formula at the very
top end, so it's still a comprehensive program.
Speaker 7 (10:24):
Middle and lower income.
Speaker 8 (10:25):
People still get their fully scheduled benefits, they're fully scheduled
cost of living adjustments. But higher income people pay a
little more and get a little bit of a benefit reduction.
Speaker 1 (10:38):
But Steve Leesman, just briefly, if you do something like that,
doesn't it turn it from the system that Julia was
talking about where everybody pays and everybody takes out into
more of a system where the richer giving more money,
and then people who are less wealthy are the ones
taking it. It becomes a different kind of a system.
Speaker 9 (10:54):
Yeah, that's a great point, Jeremy. And first I'd just
like to also add my sense of calm to Kate.
She's not going to lose her benefits. That's not really
the issue. It's not where anybody is talking about a
people her age or older. Anybody is talking about and
the issue of what happens in nine years is the
money that had been an excess that had been put
(11:16):
aside for paying Social Security.
Speaker 3 (11:19):
When we did not have the baby.
Speaker 9 (11:20):
Will try that money runs out, but the government still
has multiple means and we can talk later about the
fungibility of the money in so Security.
Speaker 3 (11:29):
But let me get to your question.
Speaker 1 (11:30):
We will he standby. I'm going to come back to
you right after our short break because I do want
to have Tolliver tell us about the last time Social
Security was changed in a big way, which Tolliver was
in the nineteen eighties.
Speaker 2 (11:41):
Yeah, a bipartisan reform to Social Security that raised the
retirement age and sped up payroll tax increases. Here's President
Ronald Reagan in nineteen eighty three.
Speaker 11 (11:51):
This bill demonstrates for all time our nation's ironclad commitment
to social security. It assures the elderly that America will
all always keep the promises made in troubled times a
half a century ago. It assures those who are still
working that they too have a pact with the future.
From this day forward, they have our pledge that they
(12:12):
will get their fair share of benefits when they retire.
Speaker 1 (12:15):
Those reforms Oliver, by the way, added decades to the
solvency of Social Security.
Speaker 2 (12:21):
Okay, so we'll in something new every week.
Speaker 1 (12:23):
If something like that happens again, we shall see if
they can get it, get a bipartisan deal in Washington,
but we will have bipartisan calls. See that coming up
on the middle, This is the middle. I'm Jeremy Hobson.
If you're just tuning in the Middle as a national
call in show, we're focused on elevating voices from the
middle geographically, politically and philosophically, or maybe you just want
(12:45):
to meet in the middle. This hour, we're asking you,
do you think social Security will be there for you
when you need it, and what, if any reforms would
you like to see? Tolliver, what is the number of
people to call in.
Speaker 2 (12:55):
It's eight four four four Middle. That's eight four four
four six four three three five three. You can also
write to us that listen to the Middle dot com
or on social media.
Speaker 1 (13:03):
I'm joined by economists Julia Cornado and CNBC senior economics
reporter Steve Lisman. And before we get back to the phone,
Steve Lisman, your point about social Security not as a
welfare program where the rich are giving to the poor,
but as something that everybody pays into, everybody takes out
of right.
Speaker 9 (13:19):
So this is why they have what they call in
the business at tax max, which is the maximum amount
of earnings which are taxed for Social Security. When Roosevelt
put the program together, the idea was to not make
it a welfare program so as to ensure broad based
political support for it and its continuity. So they put
a maximum amount that could be taxed. So it wasn't
(13:42):
a matter of, as Julia said, it was a matter
of really the wealthy giving to the poor. It was
a matter of, well, for a while, it was pay
as you go, the amount that came in equal to
how much was being paid out, and then actually there
was a surplus for a long time as the baby
boomers came through. And just a little bit of trivia,
that tax max that Julia talked about before at one
(14:04):
hundred and sixty eight thousand was three thousand dollars in
nineteen forty when the program started.
Speaker 3 (14:10):
Wow.
Speaker 1 (14:11):
Well, we're going to talk later about the difference in
life and expectancy, but between nineteen thirty five and now too.
But let's get back to the plans. Yeah, and Gary,
who is near Houston, Texas? Gary, Welcome to the middle
Go ahead.
Speaker 12 (14:25):
Hello. I want to point out that Social Security was
established due to the Great Depression and the suffering of
elderly people. And I've been on Social Security for ten years,
and I think one thing they overlooked is that elderly
people generally end up widowers and widows. And then when
(14:49):
you lose your your spouse after how many years, and
you lose that percentage of your income, and then on
top of the with your grief and the economy as
it is at that point in time, which ain't good
these days, you have to deal with the fact that
(15:09):
you need more but you have less. And maybe they
could look into some kind of alternative for elderly people
that lose their spouse.
Speaker 1 (15:19):
And in your situation, Gary, how much are you relying
on Social Security for your income right now?
Speaker 12 (15:26):
One hundred percent. And I've been I work for fifty
years and I've been on Social for ten years, and
my wife was on Social for five years, and when
she passed away, that was a third of my income.
And now I need even more because she's not here
to help me. I need to get people to help me.
(15:48):
And I have even less to take care of it.
And I'm older and I can't do all the shopping
and working and cooking and cleaning like she did, and
they need to, you know, possibly consider a hardship clause
and Social Security. Most elderly people either die or lose
their spouse at some point. And yeah, it's not funny,
(16:11):
but yeah, it's what they call. It's what they call
a secondary loss right. You lose your family and all
the work they did, and then you lose your income
to boot you.
Speaker 1 (16:23):
Know, Gary, Gary, We've got it, And thank you so
much for that call. Really appreciate it. Let me go
to Julia on that because Gary brings up something else,
which is so many people in this country. I think
twenty percent of retirees according to the ARP have no
other savings at all besides what they're going to get
from social Security.
Speaker 8 (16:42):
That's right, No, that's right, and it is an issue,
that's a real issue. In fact, I just dealt with
that with my own stepmother and father when he passed
and she saw a decrease in her income. And that's
common too, even if whether you have a pension or
a social or are relying on social sect security, you
do tend to see a drop in income and then
(17:04):
you're forced with making a decision of well do I
move to a smaller home or an apartment, and at
a time when you probably don't want to move. So
it is a challenge. It's a challenge across retirement planning.
And of course solving that problem would mean more benefits
paid out or you know, somehow pooling it between spouses.
(17:28):
But because every family and every couple is different, coming
up with a formula that's comprehensive and fits all situations
is very tricky. So I think Gary's putting his finger
on you know, a very difficult part of aging and
planning any kind of a retirement program, including social security.
Speaker 9 (17:50):
That you know, the character of a society is how
it takes care of us most vulnerable, and that's the
caller Garry is right. I am interested. I don't know
if he's anymore, if he ever had a four to
one K or a pension at the place where he
worked for fifty years. And one of the things that's
happened is these defined benefit programs have gone away, and
(18:12):
that was a major pillar of people's retirement. And in
the absence of those, that's one of the reasons why
so many more people are relying upon social Security right now.
And so I think the caller makes a great point.
Speaker 1 (18:27):
Yeah, let's go to Peter, who's in Chicago. Peter, welcome
to the middle. Do you think social Security will be
there for you when you need it?
Speaker 6 (18:36):
Hi?
Speaker 13 (18:36):
Yeah, well, well I certainly hope. So I'm just over
fifty and i've sort of I've always assumed that it
would be there. I mean, I have been doing planning
on my own. But as you said, the pensions don't
exist anymore. My parents are both educators, they had pensions.
But I don't really know how to fix it. But
(18:58):
there's one thing that has always bothered me in the
discussions around social security is when people refer to it
as an entitlement program, because to me that that has
this ring of that the people who are receiving it,
I think that they're entitled to something. Well, they actually
are entitled to it because they have paid. We've paid
(19:19):
into this program our whole lives, and and so that
that sort of makes it, you know, it gives it
this this false idea that that this is some sort
of handout or a gift or you know, something like that,
and and it's it's really it's a contract.
Speaker 1 (19:37):
Well, how would you fix it?
Speaker 13 (19:42):
How would I fix social Security?
Speaker 1 (19:44):
Yeah? Would you change any conversation?
Speaker 13 (19:47):
Yeah? I think, well, I think that we need to.
I do appreciate that you're having in other conversations about this.
You are getting people who are in the you know,
in their twenties who are calling in and who are
aware of this, and and because I think I think
(20:08):
we need to have need to change the national conversation
around this, and and and and also I mean it's
a big cultural shift that needs to happen for for
for this to come to a different place.
Speaker 1 (20:25):
Yea forever, great, Peter, Peter, thank you very much for that.
And you know what I said, we were going to
get younger calls, and now not just Peter in his
early fifties, but we're let's go to somebody in there. Third,
pretty young Christian is in Denver. Christian, welcome to the middle.
Speaker 14 (20:39):
Go ahead, Hey, thank you so so much.
Speaker 1 (20:44):
So you're thirty, I hear yes.
Speaker 14 (20:47):
Sir, so, I honestly am planning for retirement without social Security.
And the reason and my girlfriend is as well, and
the reason being is that the industrial world is undergoing
quite the demographic collapse. I mean, look at Japan, look
at China, look at Germany, look at Italy and their
tax base for people in their twenties and younger, the
(21:10):
primary tax source for entitlement programs like social Security, it's
drying up. So we are planning for a world where
we have an inverted demographic pyramid, and social security relies
on the demographic pyramid being healthy. And so yeah, there
(21:31):
are ways to fix social security in the short term,
such as my parents who are baby boomers can still
get the benefits that they're entitled to, but for our
generation that's not going to work.
Speaker 1 (21:43):
So let me just ask you one quick follow up, Christian,
do you feel any are you annoyed when you have
to pay part of your paycheck into Social Security given
that you don't think you're going to get anything out
of it, or do you just it's okay with you?
Speaker 14 (21:57):
I mean, who wouldn't be annoyed by that? But there's
you know, there's bigger issues at hands that need to
be solved in order for that to be picked. So
of course it's annoying, but part of the social contract
is this is what I have to do to take
care of my parents.
Speaker 1 (22:14):
Christian, thank you very much. Steve Lisman, what do you
think about about Christian's views? Now, I'm sure he's not
the only one in this country who doesn't think who's
that that agent doesn't think they're going to get anything
out of Social Security?
Speaker 9 (22:23):
Well, I think he's smart from a couple of different standpoints.
I think there will be some reduction in benefits for
younger people when they put this thing back, you know,
try try to make it solvent again.
Speaker 3 (22:38):
I think you're.
Speaker 9 (22:40):
The agent which you're entitled to get full so security
benefits will probably rise. When when Julia talked earlier about
the ease with which it's solved, it's solved on both
sides of the equation. It's solved on the benefits side.
It's solved on the tax side. And that's probably if
there ever is a you know, when they do come
(23:00):
to a solution, and they will because when it reaches
some kind of crisis point, they'll come to it. But
but what I try to tell young people is to
save as much as possible right now, live below your means.
You hear the what I'm saying about that Tolliver right there,
that's what you want to do too late. And and
here's the deal, which is that old, young, old Tolliver
(23:23):
will will thank young Tolliver for doing things like maxing
out your four O one K for whatever the company
is providing you. Any ability you have to put money away.
My guess is that it sounded. You know, I'm guessing
Kristen has the ability to do that. Not everybody does.
Many Americans live paycheck to paycheck to the extent you can.
(23:45):
Saving money for the future is a very easier road
to financial freedom and not being at the whins of
how the government's going to fix those security.
Speaker 1 (23:56):
Juliet Cornetta, your thoughts on that, And let me just
ask also, based on what Steve was just saying there,
do you think that the government should be spending more
attention on getting people to save in addition to what
they might get from Social Security, because so many people
don't feel like they have enough when they retire.
Speaker 8 (24:15):
I would say, I mean for sure, and the government
does provide a lot of tax incentives for things like
four oh one K programs. But let me just say
a couple of things here. One is, I don't like
the idea of increasing the retirement age. And here's why,
so we already that was one of the reforms in
nineteen eighty three that helped, you know, stabilize the program,
(24:36):
was raising the normal retirement age from sixty five to
sixty seven. But I actually did a lot of research
on social Security and the redistribution within the program over
your lifetime when I was in graduate schools part of
my thesis, and one of the ways that you know,
we've got this very progressive tax and benefit structure in
(24:57):
the program. But one of the things undoes the progressivity
of the program is that I income people tend to
live longer, so they draw benefits longer, whereas working class people,
people that are working in manual labor jobs, they tend
to have shorter life expectancies. So the more we raise
(25:19):
the retirement age, the harder it is on people. The
other thing, and I know Steve is sympathetic to this
because we Steve and I have been through a few cycles,
a few crises, if you will, in the macro economy,
and when an older worker loses their jobs, they're the
last person to get hired. They're often the first fired,
(25:42):
last hired. And so a lot of people don't plan
for unemployed, for becoming unemployed. They become unemployed unexpectedly in
their fifties sixties, and it's a lot harder to find
a job that paid what the job you left was.
For those reasons, I don't favor raising the retirement agin.
Speaker 7 (26:02):
I try to exactly where we got where it.
Speaker 6 (26:04):
Is, Jui.
Speaker 9 (26:05):
Maybe I'm a little I don't know what the word
is less humane about this. I see what you're saying
about that, but look, people in general are living longer.
Speaker 3 (26:15):
It is true that wealthier live.
Speaker 9 (26:16):
Longer than lower income individuals, but lower income individuals also
live longer. And remember what we're talking about. We're talking
about access. To use another acronym, the FRA, the full
retirement age. It's not as if you cannot get benefits
if you retire earlier. But the idea that you could
(26:37):
get and plus you, when I talk about the politics
of this, I just simply do not see it being solved.
If the Republicans are going to agree to something on
the tax side, which they have to do, then the
Dems have to gree to something on the benefit side.
If you saw what happened today, there's been some hearings
about a bill in Congress, and the CBO came out
(26:59):
with the report, and the Democrats demagogue did and the
Republicans have this idea about raising the fright to sixty nine.
It could be sixty eight, whatever it is. But I
just think if you're gonna be realistic, and this, by
the way, applies to solving the deficit problem, you're gonna
have to have some decline in spending along with some
increase in revenue.
Speaker 3 (27:19):
All of that's true. I'm getting the rapper.
Speaker 1 (27:22):
Well, I'll just let me because we have a full
roster of calls right now, let me sneak one more
in here. And Edie, who is in Columbia, South Carolina. Edie,
welcome to the middle. What do you think about social Security?
Speaker 15 (27:35):
Well, thank you so much for taking my call. Yeah, Honestly,
I feel like this is deja vous all over again,
because we had this discussion in the late nineties. There
were tons of hearings all over Capitol Hill and all
over the country on how to reform Social Security. First,
I would like to say to Gary, I just watched
(27:55):
my father go through the same thing he's going through,
and my heart goes out to them. One thing that
hasn't been mentioned yet is the surplus that we've talked about,
the two percent that was build and not build that
was accumulated on Social Security, called the Trust Fund. You know,
(28:15):
everyone feels like that's going to be there and giving
Social Security a few extra years, But in truth, that
trust Fund was actually used as a loan to fund
better government programs. So I mean, it's it's just taxing
all over again. And you know, I feel like the
Reagan and tithononeial reforms weren't really reforms. They were simply
(28:37):
tweaking around the edges. Real reform could come, even though difficult,
could come from something like for young people making part
of this a personal retirement account so that they could
accumulate wealth over the time of their lifetime, have an
account that they could then own and pass on to
their children and therefore you know, actually you know, had
(29:02):
generational wealth that would you know, dramatically reduce poverty in
the company.
Speaker 1 (29:07):
Let me ask let me ask Julia Cornado about that. Julia,
it sounds a little like privatization of some of social security.
But yeah, what do you think about that idea?
Speaker 8 (29:16):
Well, we did explore that in the nineties. You know,
there was a few proposals. One was to invest the
Social Security Trust Fund in the stock market instead of
government bonds. That was problematic because of course, who gets
who makes those decisions and you know, and and is
there room for you know, how do you decide to
(29:39):
invest who controls those investments was was an issue. The
other proposal was individual accounts within social Security and I
actually went on a journey myself as an economist looking
into this policy. I thought that that was a great idea,
again for the reasons outlined that, you know, building individual wealth,
having more ownership. The details of it, the cost, the
(30:03):
administrative costs of individual accounts are astronomical.
Speaker 1 (30:07):
Well, Tolliver, as we've been mentioning, Social Security started in
the wake of the Great Depression.
Speaker 2 (30:13):
Yeah, the Social Security Act was signed into law by
President Franklin Delano Roosevelt in nineteen thirty five. Here's FDR himself.
Speaker 16 (30:22):
Because it has become increasingly difficult for individuals to build
their own security single handed, government must now step in
and help them lay the foundation stones, just as government
in the past has helped lay the foundation of business
and industry. We must face the fact that in this
(30:43):
country we have a rich man security and a poor
man security, and that the government owes equal obligations to.
Speaker 2 (30:52):
Both government government government.
Speaker 1 (30:55):
You know, you know, I got to watch so many
FDR videos to get right for that clip, and uh,
he was really I mean, he got really energized and
excited in some of them. But that accent is really
quite something.
Speaker 2 (31:08):
You're gonna be talking like him every.
Speaker 1 (31:11):
People will think that that's how we talk.
Speaker 3 (31:13):
You know.
Speaker 1 (31:14):
Eighty years from now, we'll be right back with more
of the middle. This is the middle of Jeremy Hobson.
This hour, we're asking you, will social Security be there
for you when you needed? And what, if any reforms
would you like to see. You can call us at
eight four four four Middle. That's eight four four four
six four three three five three. I'm joined by CNBC
(31:34):
senior economics reporter Steve Lesman and economist Juliette Coronado. And
let's go to Lee, who is in New Orleans. Lee,
welcome to the middle. Go ahead.
Speaker 17 (31:45):
Hey guys, Hi, I'm from the government, and I'm here
to help.
Speaker 3 (31:50):
Government.
Speaker 17 (31:52):
I know a familiar sound. I have a couple of questions.
Forgive him if I don't get the fact exact. But
didn't we transfer the bulk of the money at some year,
you know, one hundred years back, just the years back,
whatever it was, to the general fund, Like there was
(32:13):
a pile of money and they just switched it over
to the general fund, diluting the amount of money that
would still be there had it been left in its
own original stage.
Speaker 1 (32:27):
Steve, this is hey Lee, stay stay there, leave but
Steve Lee, spend Why don't you answer that question?
Speaker 3 (32:33):
Lee?
Speaker 9 (32:34):
You remember Al Gore talking about the lock box lock box, right,
There is no lock box.
Speaker 3 (32:40):
There never was a lock box. It's all just government money.
Speaker 9 (32:44):
It's just this what do you want to say, this precept,
this big notion that the money that comes in, just
like the highway money for the gas tax, is supposed
to go to roads. It doesn't always go to roads
or the notion that social security it doesn't work that way.
We had a big excess in social security tax payments
(33:08):
or revenue, and that funded the government for a while.
It just reduced the amount of funding the government had
to do. So there's this I don't.
Speaker 17 (33:17):
Know, okay, So from the more point made, the social
security should be fairly solvent. And it's a political hot
potato the they toss around every year. But I have
a brother who's a Social security judge, and he told
me some of the most ridiculous things. Wasteful spending on
(33:37):
social security's part of social security disability. People that work,
they're fifty years old come into his court and say, oh,
I can't get a job. I needs help.
Speaker 3 (33:48):
And they look.
Speaker 17 (33:48):
He looks back and goes, mister so and so, mister
John Doe, you've never had a job. But we're paying
these guys found dollars a month for the rest of
their life. They've never put a penny into it.
Speaker 9 (34:01):
Uh.
Speaker 17 (34:01):
He said, it's fraught with fraud, it's fraught with wasteful spending.
It's ridiculous. It's a typical bureaucratic uh debacle, you know.
And and the dichotomy is I'm an old fossil now.
I've been putting in since I had a paper route,
And am I gonna get it when I'm When I'm
(34:21):
just a few years down the line, I'm sure it's
still gonna be there. But this whole dichotomy of the
inverted pyramid where not as many youngsters are putting in now,
I mean, let me.
Speaker 1 (34:34):
Let me, let me take that to our guests, and
I will say that the only reason I let you
ask two questions is because I love your accent from
New Orleans. It makes me want to go there right away.
Speaker 3 (34:41):
But Lee, thank you for that.
Speaker 1 (34:43):
Let me let me go to Julia Cornat Julia.
Speaker 3 (34:46):
Uh.
Speaker 1 (34:47):
Disability is a is a part of Social Security, just
like survivor benefits are a part of social security. The
main portion, though, of social Security is for senior citizens, retirees.
Speaker 7 (34:57):
That's right, That's right now.
Speaker 8 (34:59):
Disability actually, in terms of the overall budget is quite
a tiny share of it. And one of the really
interesting things we've seen in the last oh, I'd say
ten years is that actually people we do see people
moving off the disability roles. When the job market is strong,
you actually see people. It's more worth it to go
(35:19):
and get a job, and so, you know, I'm sure
there's people that you know, maybe don't deserve the benefits,
but really that's not the biggest problem that the program faces, Tulliver.
Speaker 1 (35:32):
I know a lot of comments are coming in online
as well.
Speaker 2 (35:35):
Absolutely Dion in Desert Hot Springs, California says, I believe
that one solution would be for our wealthy people, especially
members of Congress, to be booted off the program the
same way a welfare recipient would if the latter made
too much money. I believe they could reapply should their
financial situation change, but if they are rich, they don't
need the safety net.
Speaker 1 (35:55):
Wait wait, wait, Tulliver, Actually that's a really, that's a really,
that's something hasn't come up yet. But Steve Leasman means
testing people that are rich shouldn't be able to get
the benefits. What about that idea?
Speaker 9 (36:07):
Yeah, well, then you create essentially a welfare program. I mean,
that's okay, if that's what you want to do, and
then and and and and and the program can survive
the politics of that. I think there's a justication. I
do believe also that tax on Social Security does go
up with wealth. I was trying to afford this program.
Understand the taxation on social security. I am not far
from having to solve that problem in my real life,
(36:31):
but but I do believe it goes up with it.
Speaker 3 (36:33):
It's means tested that way.
Speaker 9 (36:36):
But look, it's like I said, part of the solution,
My solution is to take a little piece of everything.
One of the things you hear and folks at home,
I don't think you should buy this is that this
problem won't solve it. This solution won't solve the problem.
Of course, it won't solve the problem. It'll solve a
piece of the problem, as will the tax part, as
(36:56):
will the benefit part, as will this getting to compromise.
And this show is about the middle. And that's what
we lack in this country, is the middle. We don't
have people that come and say, come on, folks, use
your common sense. If you don't want revenue and you
don't want benefits cut, you take a little revenue cut,
and I'll take a little benefits cut, and we'll put
it together and we'll solve the damn thing. So eight
(37:19):
doesn't have to lose sleep at night.
Speaker 1 (37:22):
Let's go to Miles, who's in Edwardsburg, Michigan. Miles, welcome
to the middle What do you think about Social Security?
Speaker 18 (37:29):
Can you hear me?
Speaker 1 (37:30):
I can hear you?
Speaker 18 (37:31):
Yeah, go ahead, Okay, Hey, I think they go to
get rid of the five hundred and sixty thousand limits
and just tax people.
Speaker 1 (37:40):
Yeah, just tax everybody up to a higher level.
Speaker 18 (37:44):
Yes, And then why do you have to have a
limit and get rid of a tax? Don't tax sat
Security to when people penalize them for working, they're still
paying taxes, they're paying federal, city, state, county, and just
let them keep working and they're paying them to. So Security,
bad medicare all.
Speaker 1 (38:02):
Right, myles, thank you. You know, actually, Julia Cornado Donald
Trump one of the so there, if you look at
what the two candidates want to do about Social Security,
the thing that Donald Trump has proposed is not taxing
people on their Social Security benefits, which the experts have
said would actually make the problem. Harris hasn't talked about
it in the campaign, but when you go back and
(38:23):
look at some of her previous statements, she has talked
about taxing people beyond that one hundred and sixty eight
thousand dollars cap. But yeah, your thoughts there.
Speaker 8 (38:35):
Again that that is the low hanging fruit. You don't
necessarily need to eliminate like eliminate the cap altogether. You
can just move it up a lot higher. But that
is the easiest way to raise a lot of revenue.
That that is the lever that he gives you the
most bang for your buck. And then you know, as
Steve said, you maybe you need to balance it with
(38:57):
some benefit adjustments, and that can be done as well.
You know, not taxing Social Security benefits makes the program's
finances worse, so that would be going the other direction.
But in general, you know, if you look at the
kind of the middle household, that middle median household down,
(39:17):
social Security has done a phenomenal job protecting people's well
being in a very stable, secure way. And most proposals
look to keep that, to maintain that, to not balance
the program on the backs of the middle but to
just take a little bit tax the higher income people
(39:39):
a little bit more and and maybe adjust the benefits
at that level as well. And again it can be
done while protecting the middle down.
Speaker 1 (39:50):
Let's go to William in Philadelphia. William, welcome to the middle.
What do you think about Social Security?
Speaker 19 (39:58):
Well, I bless social Security as far as I'm concerned,
because social Security is helping me survive. That's the only
income I have.
Speaker 1 (40:14):
Are you worried about it going away?
Speaker 19 (40:18):
It will never go away. And let me tell you something.
This is just my opinion. If anybody in Washington says
it's going to go away, you think that January sixth,
twenty twenty one riot was something you don't want that.
(40:43):
Let me tell you something. In my opinion, you do
not want that. I've never worried about social Security. I'm
seventy two years old now and I never worried about it.
Because of what I just said.
Speaker 1 (41:01):
You think people will be out in the streets if
they made any changes. William thank you for that call.
And Steve Leasman, you know, we can't talk about this
in a vacuum. There are a lot of issues that
are going on right now. But if part of the
issue is people paying into Social Security versus the amount
of people who are taking the benefits, what about immigration?
Does that fit into this discussion?
Speaker 9 (41:22):
Yeah, cue the hate mail here, because this is where
I'm going to get it. One of the rules of
economics is there's no free lunch. But immigration is probably
the closest thing to a free lunch for Social Security
as we could possibly get. The deal is this, immigrants
come in, they are younger, they work longer, and especially
(41:43):
by the way, undocumented immigrants, they tend to pay into
the Social Security system. Sure, some of them work off
the books. We'll talk about that a little bit more
in a second, but to the extent they're on the books,
they pay into the system, and they do and they
are not eligible for the benefit of Social Security. Now,
(42:04):
there is a great debate about how many undocumented immigrants
are paying into the system. What I understand to be
the case is that employers tend to be more concerned
about not paying taxes for their undocumented immigrants work than
they are hiring an undocumented immigrant, because the penalties are
(42:29):
so much more severe for that in terms of back taxes.
So there's an argument about that. I think people would
many people might say, well, they're undocumented immigrants, they're not
paying taxes. We do not believe that's the case. There
have been several studies that they tend to put billions
of dollars into the tax system. Yes, there are other
(42:49):
costs that to the undocumented immigrants, but they also tend
to pay taxes and cannot receive the benefits. I don't
know if our economist Julia Carnado would qualify that as
a free lunch, because that would be a violation of
economic theory.
Speaker 7 (43:04):
Julia, I mean inflation this get.
Speaker 8 (43:07):
An earlier caller spoke to the demographic challenges of the program.
I mean, at the end of the day, the reason
we're having this challenge is that population growth slow and
so we have this bulge of the baby boomers that
are going to collect benefits, and the size of the
generation supporting them through taxes is smaller. One way to
(43:30):
address that demographic challenge is to bring in another cohort
of younger workers through immigration, and in fact, we've kind
of been doing that recently. We've had pretty strong rebound
and recovery and immigration which has had all kinds of
beneficial effects. Again, you know, it's another third rail of politics,
(43:52):
but the reality is it's pooled off the labor market
and brought help bring inflation down. And yes, it means
more workers and more tax revenues going into the social
security system. So it's not a free lunch because ultimately
down the road they'll be collecting benefits too, But it
helps smooth that demographic transition, because we are in a
(44:14):
demographic transition. We're not going back to high growth rates globally.
This is a global phenomenon. The UN projects we're going
to have zero population growth globally by twenty fifty. This
is a reality, folks. But immigration can help ease the transition.
Speaker 9 (44:33):
Jeremy, and I was qualify my remarks though, which is
that I also think we need to rely most heavily
on legal immigration, and we have reduced that over the years.
Compared with say twenty or thirty years ago, those numbers
have actually gone down, and they are, in a sense
a free lunch in the sense that Julia said, they
(44:53):
do come in as younger workers.
Speaker 3 (44:55):
Eventually they do have to get benefits.
Speaker 1 (44:57):
Let's get to Carol, who's in Myrtle Beach, South Caroline,
Carol your thoughts.
Speaker 20 (45:03):
Yes, I have an issue with retiring early at sixty
two years old.
Speaker 10 (45:10):
I retired early at sixty.
Speaker 20 (45:12):
Two and the COVID pandemic was still going on. I
wasn't icee you nurse. I'm no longer an icye you nurse,
but at the time, whenever I retired, I went back
to work to help them out, because some of those
(45:32):
girls were working eight to fourteen days in a row,
and it really got me whenever one girl turned to
me and told me she was so glad she had
the next fourteen days off because she didn't have to
watch somebody die. So in the midst of all of this,
(45:54):
with me trying to help them out because I felt
guilty about leaving, retiring at that age, and leaving the profession,
what ended up happening is I ended up having to
pay Social Security back six thousand dollars because I made
too much that year. My question is is why don't
(46:15):
they let people retire at sixty two and if they're
not able to work, you know, that full amount of
time will then so be it. Don't have a cap
on top of it and make them pay back.
Speaker 19 (46:29):
You know.
Speaker 1 (46:30):
Yeah, Carol, thank you for that question, and also thank
you for helping out in that way and everything you
did during the pandemic. The medical professionals just total heroes
in the pandemic. Julia Cornatto your response to Carol.
Speaker 8 (46:44):
Yeah, No, it's there are ways that we could probably
innovate in the Social Security program and allow people to
maybe draw partial benefits if they don't need a full
income and want to work part time. There are ideas
that we can explore to sort of think about how
to facilitate more flexible transitions instead of just going from
(47:09):
working to not working.
Speaker 7 (47:12):
At all and getting benefits.
Speaker 8 (47:14):
There are ideas that can be explored that would help
exactly what Carol is talking about and.
Speaker 1 (47:21):
Steve your thoughts quick comment.
Speaker 9 (47:23):
First of all, we haven't done enough to honor the
medical professions who work during the pandemic and the unbelievable
work they did. One thing we haven't talked about, Jeremy
real quick is one of the solutions to social security
is growth. And the more we grow the economy, the
more productive we are, the higher our growth rate, the
more tax revenue will generate, the more people are going
(47:46):
to employ. One of the keys to growing is having
the labor force to grow. One of the things to
having the labor force grow is making the workplace more
accommodating for older folks to stay in the workforce. And
what this caller talked about, I think is a very
very important reform that ought to be made that says,
if you're gonna work, you're not going to pay a
penalty on that because we need older workers to remain
(48:09):
in the workforce. It's a big part of how this
nation's going to continue to grow.
Speaker 1 (48:13):
So, Okay, we have actually run out of time, But
Steve Leesman, I'm just going to give you ten seconds
because this is the second most exciting thing you've done today,
beyond on the middle. This is the first people you interviewed,
the Treasury Secretary Janet Yellen. Give us the quick ten
second headline. What did she tell you?
Speaker 8 (48:29):
What?
Speaker 1 (48:29):
What do we need to know?
Speaker 9 (48:31):
Well, she thinks we're heading towards a soft landing, that
she finds inflation under control. She'd like to see the
Fed bring down interest rates, and she would like to
do more on the deficit. But left me a little
bit scratching my head about why she hasn't done more
about the deficit while she's been in office.
Speaker 1 (48:47):
That is CNBC Senior Economics reporter Steve Lee's been fresh
off an interview with the Treasury Secretary and economist Julia Cornado,
president and founder of Macro Policy Perspectives. Thanks to both
of you for joining us, Thank you, and thanks thanks
to all of our callers this hour. Next week, we've
got two shows Tolliver. We're going to be coming to
you with a special edition right after the vice presidential
debate on Tuesday to get your reaction, and we're back
(49:10):
at our normal time later in the week welcoming two
former governors of Tennessee, Republican Bill Haslam and Democrat Phil Bretson,
asking you what the most important issue to you is.
With just one month to go before the election.
Speaker 3 (49:23):
Time is flying.
Speaker 2 (49:25):
You can call in for both shows at eight four
four four Middle. That's eight four four four six four
three three five three. You can also reach us at
Listen to the Middle dot com. You can also sign
up for our free weekly newsletter.
Speaker 1 (49:36):
The Middle is brought to you by Long Nook Media,
distributed by Illinois Public Media in Urbana, Illinois, and produced
by Harrison Patino, Danny Alexander, Sam Burmisdas, and John barth
Are intern Azonica Deshler. Our technical director is Jason Croft.
Thanks to the podcast audience and the more than four
hundred and ten public radio stations that are making it
possible for people across the country to listen to the Middle,
(49:56):
I'm Jeremy Hobson. I'll talk to you twice next week.
Speaker 9 (50:01):
The names names,
The Middle is supported by Journalism Funding Partners, a nonprofit
organization striving to increase the sustainability of local journalism by
building connections between donors and news organizations. More information on
how you can support The Middle at Listen tooth Middle
dot com. Welcome to the Middle. I'm Jeremy Hobson, along
(00:22):
with our house DJ Tolliver and Tolliver. Before we get
to talking about senior citizens, let's talk about a baby.
A one year old baby named The Middle. We are
a year old as a weekly show as of this week.
Speaker 2 (00:33):
Oh my god, are we even teething yet?
Speaker 1 (00:36):
Are we actually?
Speaker 3 (00:37):
First step, I went, I.
Speaker 1 (00:38):
Went and looked online to see what one year olds
do exactly, and they can say Mama, dada, A lots
of things. I don't know about The Middle or Tolliver,
but anyway, very exciting and we've actually, we'd looked back
over the last year, we've had one hundred panel guests
or more more than ten thousand calls into our system.
We've done each shows on the road, so a lot
a lot happening here and this hour, Tiver, we're talking
(01:00):
about social security, one of the largest items in the
federal budget, but one that doesn't get talked about too
much because changing it is so unpopular. It is funded
by American workers and employers, and people are allowed to
start getting their benefits at age sixty two, or if
they wait, they get their full benefits at age sixty seven.
But of course the baby boom generation has put big
(01:21):
strains on Social Security with so many people retiring at
once and right now, the Trustees of Social Security say
that unless changes are made, big cuts would be necessary
starting in about nine years. So our question this hour
will social Security be there for you when you need it?
And what if any reforms would you like to see.
And we're going to get to your calls in a
(01:41):
minute at eight four four four six four three three
five three. But first last week we asked you what
the value of NATO is to the United States. We
got a lot of interesting callers. Here are some of
the comments that came in after the show.
Speaker 4 (01:54):
Hi, this is Eric, and I am calling you from Canton, Ohio.
Is bad for the United States and probably should not
have existed past nineteen ninety one. There is a great
case to be made for the United States leaving NATO,
and I'd like to make it.
Speaker 5 (02:13):
Hi, my name is Kathy and I'm from Denver, Colorado.
I need to use a football metaphor to make it
very clear. If I'm a football player and I'm being
challenged by a powerful team, let's call that one. I
don't know Jay Russia, and I want to try to
vanquish my opponent, I would say that I would like
(02:34):
to have a team of people rather than me having
to do it all by myself.
Speaker 6 (02:40):
My name is John. I'm calling from Meriden, Connecticut. NATO
serves another function, which is all the disparate members are
much stronger together than would be a part and represent
something to be reckoned with.
Speaker 1 (02:54):
Well, thanks to everyone who called in and you can
hear that entire episode on our podcast in partnership with
iHeart Podcasts, on the iHeart app or wherever you listen
to podcasts. So now to our topic this hour, Will
social security be there for you when you need it?
And what if any reforms would you like to see? Tolliver?
How can listeners reach us?
Speaker 2 (03:12):
They can call us at eight four four four Middle.
It's eight four four four six four three three five
three all right to us that listen to the Middle
dot com.
Speaker 1 (03:19):
So let's meet our panel economist Julia Coronado is the
president and founder of Macro Policy Perspectives. She also teaches
finance at the University of Texas Austin. Julia, Great to
have you on.
Speaker 7 (03:29):
The middle It's my pleasure, Jeremy.
Speaker 1 (03:32):
And also joining us is CNBC senior economics reporter Steve Leisman,
perhaps the first person in America to know what the
Fed is going to do every time they meet. Steve.
Great to have you with us as well.
Speaker 3 (03:43):
Great to be here, Jeremy, Thanks for having me.
Speaker 1 (03:45):
Well, before we get to the phones, let's start with
the importance of this program, Julia Coronado. Experts say that
without it, twenty two million adults would fall below the
poverty line. So, especially for our younger listeners, for whom
social security may be a term that they hear but
don't exactly know what it is. Why do we need
social security?
Speaker 8 (04:04):
Okay, so I will be the bearer of some good news, Jeremy. So,
first of all, social security should not be thought of
as government spending or a government spending program. It is
a social insurance program. We take money out of young
people's paychecks to provide a steady, guaranteed payment to older people.
(04:25):
In their retirement years. So it is a transfer from
one group of households to another. It is not the
government spending money, it is you spending money. You get
to choose what to do with that money. That's number one.
Number two is you know, it really is pretty easy
to fix Social Security Right now, these scheduled taxes will
(04:47):
pay more than three quarters of all benefits. So if
we were forced to balance the program today, yes there
would be some cuts, but most of the benefits are
already slated to be paid for. So the changes we
need to make to the program to balance it are
not that huge, and we can get into the specifics
(05:09):
if you are interested. But I think there's a couple
of very simple reforms that would put it right in balance,
and they would protect the people that rely on it
the most well.
Speaker 1 (05:21):
So if it is so simple to fix it, Steve Lisban,
why is it such a third rail in American politics
that nobody really wants to make the hard choices and
make the tough changes to Social Security to keep it
solvent in the long term.
Speaker 9 (05:35):
It's politics, It's I mean, Julia's right. The economists could
fix it overnight. You put three of them in a
room and they could come up with a variety of revenue,
benefit and eligibility rules, and you could put it on.
Speaker 3 (05:49):
A pretty pretty good safe course for many decades.
Speaker 9 (05:54):
But it's politics and the way it's demagogue and I
just want to say one thing that's important, I think
to your viewership is that the wrong people in the
public are engaged in this debate. The people who care
a lot about social Security are the people who are
receiving it right now, and they are politically almost no
(06:15):
danger at all of having their benefits cut or their eligibility.
Speaker 3 (06:20):
It's the young folks.
Speaker 9 (06:21):
That are going to get this or they're going to
be affected by any changes to Social Security, and most
of the polling that I've seen shows they're almost not
involved in the.
Speaker 3 (06:32):
Issue at all.
Speaker 9 (06:33):
So, if you're young and listening to this program, other
than the fact that it helps Jeremi's demographics, when it
comes to when it comes to the listenership, ye get
engaged in this issue because it's important.
Speaker 1 (06:48):
I've got news for you, Steve. Every show that we
have in Tolliver will vouch for this. There are people
under twenty five that call and sometimes under twenty that
call in and I'm putting a call out to you
right now if you are twenty and under thirty under,
I want to hear from you this hour. But why
don't we get to a caller on the line. Here?
Kate is in Fort Collins, Colorado. Kate, welcome to the middle.
(07:08):
Go ahead your thoughts on Social Security?
Speaker 10 (07:11):
Hi, Yeah, I'm not one of those that are under thirty.
I'm already collecting Social Security and it just seems like
you keep hearing that it's going to end in nine years.
And in nine years I'm going to be in my
mid eighties, and it scares me to death that it
(07:32):
won't be there, and that the increases every year don't
match the rate of inflation. It seems like my husband
and I have to cut back more and more every
year because the jump in our yearly benefits is just
(07:53):
a few dollars.
Speaker 1 (07:55):
And would you like to what would you like to
be done to it?
Speaker 3 (07:59):
Kate?
Speaker 1 (08:00):
What do you think would be a reform that would
help keep it solving in the long term for you
and others?
Speaker 10 (08:06):
Well, I really think that if people, both people in corporations,
paid the taxes that you know that they should be paying,
that Social Security could easily be funded I heard heard
it's somebody is saying it's a simple solution and it's
(08:28):
mostly politics, but something has to be done so that
more people are are paying more into it. And yet
the young people that are you know, are now paying
into it, have it available for them like, you know, like.
Speaker 1 (08:49):
When they when they retire. Yeah, Kate, thank you. Let
me take that to Julia cornado U. And you know,
one of the things you talked about there was taxing
people more. This is one of the big solutions that's
out there for Social Security is you know, right now
it's like one hundred and sixty eight thousand dollars up
to about one hundred and sixty eight that you get
taxed on. But some have said just keep going beyond
that or maybe to a whole until four hundred thousand
(09:12):
of income and then take it after that. But what
do you think about that?
Speaker 7 (09:15):
That's the easiest reform.
Speaker 8 (09:17):
So, first of all, I really hope that Kate doesn't
lose sleep over this. It will be there when you
are eighty ninety ninety five. May you live long and prosper,
and it will be there. Nobody is talking about cutting
benefits or even you know, even proposals like limiting the
cost of living adjustment, that's just simply not politically going
(09:38):
to happen. But what Jeremy you just mentioned that is
the most commonly favored reform. So right now people pay
pay taxes, as you mentioned, up to one hundred and
sixty eight thousand, six hundred in their income, and lifting
that cap so that you pay the Social Security tax
on all of your wages salary income. That would close
(10:02):
three quarters of the gap. That really is the easiest reform.
The people that can afford it the most would pay
the most, and no benefit cuts necessarily. Now that, of course,
you still have a small gap, so you can also
make some adjustments to the benefit formula at the very
top end, so it's still a comprehensive program.
Speaker 7 (10:24):
Middle and lower income.
Speaker 8 (10:25):
People still get their fully scheduled benefits, they're fully scheduled
cost of living adjustments. But higher income people pay a
little more and get a little bit of a benefit reduction.
Speaker 1 (10:38):
But Steve Leesman, just briefly, if you do something like that,
doesn't it turn it from the system that Julia was
talking about where everybody pays and everybody takes out into
more of a system where the richer giving more money,
and then people who are less wealthy are the ones
taking it. It becomes a different kind of a system.
Speaker 9 (10:54):
Yeah, that's a great point, Jeremy. And first I'd just
like to also add my sense of calm to Kate.
She's not going to lose her benefits. That's not really
the issue. It's not where anybody is talking about a
people her age or older. Anybody is talking about and
the issue of what happens in nine years is the
money that had been an excess that had been put
(11:16):
aside for paying Social Security.
Speaker 3 (11:19):
When we did not have the baby.
Speaker 9 (11:20):
Will try that money runs out, but the government still
has multiple means and we can talk later about the
fungibility of the money in so Security.
Speaker 3 (11:29):
But let me get to your question.
Speaker 1 (11:30):
We will he standby. I'm going to come back to
you right after our short break because I do want
to have Tolliver tell us about the last time Social
Security was changed in a big way, which Tolliver was
in the nineteen eighties.
Speaker 2 (11:41):
Yeah, a bipartisan reform to Social Security that raised the
retirement age and sped up payroll tax increases. Here's President
Ronald Reagan in nineteen eighty three.
Speaker 11 (11:51):
This bill demonstrates for all time our nation's ironclad commitment
to social security. It assures the elderly that America will
all always keep the promises made in troubled times a
half a century ago. It assures those who are still
working that they too have a pact with the future.
From this day forward, they have our pledge that they
(12:12):
will get their fair share of benefits when they retire.
Speaker 1 (12:15):
Those reforms Oliver, by the way, added decades to the
solvency of Social Security.
Speaker 2 (12:21):
Okay, so we'll in something new every week.
Speaker 1 (12:23):
If something like that happens again, we shall see if
they can get it, get a bipartisan deal in Washington,
but we will have bipartisan calls. See that coming up
on the middle, This is the middle. I'm Jeremy Hobson.
If you're just tuning in the Middle as a national
call in show, we're focused on elevating voices from the
middle geographically, politically and philosophically, or maybe you just want
(12:45):
to meet in the middle. This hour, we're asking you,
do you think social Security will be there for you
when you need it, and what, if any reforms would
you like to see? Tolliver, what is the number of
people to call in.
Speaker 2 (12:55):
It's eight four four four Middle. That's eight four four
four six four three three five three. You can also
write to us that listen to the Middle dot com
or on social media.
Speaker 1 (13:03):
I'm joined by economists Julia Cornado and CNBC senior economics
reporter Steve Lisman. And before we get back to the phone,
Steve Lisman, your point about social Security not as a
welfare program where the rich are giving to the poor,
but as something that everybody pays into, everybody takes out
of right.
Speaker 9 (13:19):
So this is why they have what they call in
the business at tax max, which is the maximum amount
of earnings which are taxed for Social Security. When Roosevelt
put the program together, the idea was to not make
it a welfare program so as to ensure broad based
political support for it and its continuity. So they put
a maximum amount that could be taxed. So it wasn't
(13:42):
a matter of, as Julia said, it was a matter
of really the wealthy giving to the poor. It was
a matter of, well, for a while, it was pay
as you go, the amount that came in equal to
how much was being paid out, and then actually there
was a surplus for a long time as the baby
boomers came through. And just a little bit of trivia,
that tax max that Julia talked about before at one
(14:04):
hundred and sixty eight thousand was three thousand dollars in
nineteen forty when the program started.
Speaker 3 (14:10):
Wow.
Speaker 1 (14:11):
Well, we're going to talk later about the difference in
life and expectancy, but between nineteen thirty five and now too.
But let's get back to the plans. Yeah, and Gary,
who is near Houston, Texas? Gary, Welcome to the middle
Go ahead.
Speaker 12 (14:25):
Hello. I want to point out that Social Security was
established due to the Great Depression and the suffering of
elderly people. And I've been on Social Security for ten years,
and I think one thing they overlooked is that elderly
people generally end up widowers and widows. And then when
(14:49):
you lose your your spouse after how many years, and
you lose that percentage of your income, and then on
top of the with your grief and the economy as
it is at that point in time, which ain't good
these days, you have to deal with the fact that
(15:09):
you need more but you have less. And maybe they
could look into some kind of alternative for elderly people
that lose their spouse.
Speaker 1 (15:19):
And in your situation, Gary, how much are you relying
on Social Security for your income right now?
Speaker 12 (15:26):
One hundred percent. And I've been I work for fifty
years and I've been on Social for ten years, and
my wife was on Social for five years, and when
she passed away, that was a third of my income.
And now I need even more because she's not here
to help me. I need to get people to help me.
(15:48):
And I have even less to take care of it.
And I'm older and I can't do all the shopping
and working and cooking and cleaning like she did, and
they need to, you know, possibly consider a hardship clause
and Social Security. Most elderly people either die or lose
their spouse at some point. And yeah, it's not funny,
(16:11):
but yeah, it's what they call. It's what they call
a secondary loss right. You lose your family and all
the work they did, and then you lose your income
to boot you.
Speaker 1 (16:23):
Know, Gary, Gary, We've got it, And thank you so
much for that call. Really appreciate it. Let me go
to Julia on that because Gary brings up something else,
which is so many people in this country. I think
twenty percent of retirees according to the ARP have no
other savings at all besides what they're going to get
from social Security.
Speaker 8 (16:42):
That's right, No, that's right, and it is an issue,
that's a real issue. In fact, I just dealt with
that with my own stepmother and father when he passed
and she saw a decrease in her income. And that's
common too, even if whether you have a pension or
a social or are relying on social sect security, you
do tend to see a drop in income and then
(17:04):
you're forced with making a decision of well do I
move to a smaller home or an apartment, and at
a time when you probably don't want to move. So
it is a challenge. It's a challenge across retirement planning.
And of course solving that problem would mean more benefits
paid out or you know, somehow pooling it between spouses.
(17:28):
But because every family and every couple is different, coming
up with a formula that's comprehensive and fits all situations
is very tricky. So I think Gary's putting his finger
on you know, a very difficult part of aging and
planning any kind of a retirement program, including social security.
Speaker 9 (17:50):
That you know, the character of a society is how
it takes care of us most vulnerable, and that's the
caller Garry is right. I am interested. I don't know
if he's anymore, if he ever had a four to
one K or a pension at the place where he
worked for fifty years. And one of the things that's
happened is these defined benefit programs have gone away, and
(18:12):
that was a major pillar of people's retirement. And in
the absence of those, that's one of the reasons why
so many more people are relying upon social Security right now.
And so I think the caller makes a great point.
Speaker 1 (18:27):
Yeah, let's go to Peter, who's in Chicago. Peter, welcome
to the middle. Do you think social Security will be
there for you when you need it?
Speaker 6 (18:36):
Hi?
Speaker 13 (18:36):
Yeah, well, well I certainly hope. So I'm just over
fifty and i've sort of I've always assumed that it
would be there. I mean, I have been doing planning
on my own. But as you said, the pensions don't
exist anymore. My parents are both educators, they had pensions.
But I don't really know how to fix it. But
(18:58):
there's one thing that has always bothered me in the
discussions around social security is when people refer to it
as an entitlement program, because to me that that has
this ring of that the people who are receiving it,
I think that they're entitled to something. Well, they actually
are entitled to it because they have paid. We've paid
(19:19):
into this program our whole lives, and and so that
that sort of makes it, you know, it gives it
this this false idea that that this is some sort
of handout or a gift or you know, something like that,
and and it's it's really it's a contract.
Speaker 1 (19:37):
Well, how would you fix it?
Speaker 13 (19:42):
How would I fix social Security?
Speaker 1 (19:44):
Yeah? Would you change any conversation?
Speaker 13 (19:47):
Yeah? I think, well, I think that we need to.
I do appreciate that you're having in other conversations about this.
You are getting people who are in the you know,
in their twenties who are calling in and who are
aware of this, and and because I think I think
(20:08):
we need to have need to change the national conversation
around this, and and and and also I mean it's
a big cultural shift that needs to happen for for
for this to come to a different place.
Speaker 1 (20:25):
Yea forever, great, Peter, Peter, thank you very much for that.
And you know what I said, we were going to
get younger calls, and now not just Peter in his
early fifties, but we're let's go to somebody in there. Third,
pretty young Christian is in Denver. Christian, welcome to the middle.
Speaker 14 (20:39):
Go ahead, Hey, thank you so so much.
Speaker 1 (20:44):
So you're thirty, I hear yes.
Speaker 14 (20:47):
Sir, so, I honestly am planning for retirement without social Security.
And the reason and my girlfriend is as well, and
the reason being is that the industrial world is undergoing
quite the demographic collapse. I mean, look at Japan, look
at China, look at Germany, look at Italy and their
tax base for people in their twenties and younger, the
(21:10):
primary tax source for entitlement programs like social Security, it's
drying up. So we are planning for a world where
we have an inverted demographic pyramid, and social security relies
on the demographic pyramid being healthy. And so yeah, there
(21:31):
are ways to fix social security in the short term,
such as my parents who are baby boomers can still
get the benefits that they're entitled to, but for our
generation that's not going to work.
Speaker 1 (21:43):
So let me just ask you one quick follow up, Christian,
do you feel any are you annoyed when you have
to pay part of your paycheck into Social Security given
that you don't think you're going to get anything out
of it, or do you just it's okay with you?
Speaker 14 (21:57):
I mean, who wouldn't be annoyed by that? But there's
you know, there's bigger issues at hands that need to
be solved in order for that to be picked. So
of course it's annoying, but part of the social contract
is this is what I have to do to take
care of my parents.
Speaker 1 (22:14):
Christian, thank you very much. Steve Lisman, what do you
think about about Christian's views? Now, I'm sure he's not
the only one in this country who doesn't think who's
that that agent doesn't think they're going to get anything
out of Social Security?
Speaker 9 (22:23):
Well, I think he's smart from a couple of different standpoints.
I think there will be some reduction in benefits for
younger people when they put this thing back, you know,
try try to make it solvent again.
Speaker 3 (22:38):
I think you're.
Speaker 9 (22:40):
The agent which you're entitled to get full so security
benefits will probably rise. When when Julia talked earlier about
the ease with which it's solved, it's solved on both
sides of the equation. It's solved on the benefits side.
It's solved on the tax side. And that's probably if
there ever is a you know, when they do come
(23:00):
to a solution, and they will because when it reaches
some kind of crisis point, they'll come to it. But
but what I try to tell young people is to
save as much as possible right now, live below your means.
You hear the what I'm saying about that Tolliver right there,
that's what you want to do too late. And and
here's the deal, which is that old, young, old Tolliver
(23:23):
will will thank young Tolliver for doing things like maxing
out your four O one K for whatever the company
is providing you. Any ability you have to put money away.
My guess is that it sounded. You know, I'm guessing
Kristen has the ability to do that. Not everybody does.
Many Americans live paycheck to paycheck to the extent you can.
(23:45):
Saving money for the future is a very easier road
to financial freedom and not being at the whins of
how the government's going to fix those security.
Speaker 1 (23:56):
Juliet Cornetta, your thoughts on that, And let me just
ask also, based on what Steve was just saying there,
do you think that the government should be spending more
attention on getting people to save in addition to what
they might get from Social Security, because so many people
don't feel like they have enough when they retire.
Speaker 8 (24:15):
I would say, I mean for sure, and the government
does provide a lot of tax incentives for things like
four oh one K programs. But let me just say
a couple of things here. One is, I don't like
the idea of increasing the retirement age. And here's why,
so we already that was one of the reforms in
nineteen eighty three that helped, you know, stabilize the program,
(24:36):
was raising the normal retirement age from sixty five to
sixty seven. But I actually did a lot of research
on social Security and the redistribution within the program over
your lifetime when I was in graduate schools part of
my thesis, and one of the ways that you know,
we've got this very progressive tax and benefit structure in
(24:57):
the program. But one of the things undoes the progressivity
of the program is that I income people tend to
live longer, so they draw benefits longer, whereas working class people,
people that are working in manual labor jobs, they tend
to have shorter life expectancies. So the more we raise
(25:19):
the retirement age, the harder it is on people. The
other thing, and I know Steve is sympathetic to this
because we Steve and I have been through a few cycles,
a few crises, if you will, in the macro economy,
and when an older worker loses their jobs, they're the
last person to get hired. They're often the first fired,
(25:42):
last hired. And so a lot of people don't plan
for unemployed, for becoming unemployed. They become unemployed unexpectedly in
their fifties sixties, and it's a lot harder to find
a job that paid what the job you left was.
For those reasons, I don't favor raising the retirement agin.
Speaker 7 (26:02):
I try to exactly where we got where it.
Speaker 6 (26:04):
Is, Jui.
Speaker 9 (26:05):
Maybe I'm a little I don't know what the word
is less humane about this. I see what you're saying
about that, but look, people in general are living longer.
Speaker 3 (26:15):
It is true that wealthier live.
Speaker 9 (26:16):
Longer than lower income individuals, but lower income individuals also
live longer. And remember what we're talking about. We're talking
about access. To use another acronym, the FRA, the full
retirement age. It's not as if you cannot get benefits
if you retire earlier. But the idea that you could
(26:37):
get and plus you, when I talk about the politics
of this, I just simply do not see it being solved.
If the Republicans are going to agree to something on
the tax side, which they have to do, then the
Dems have to gree to something on the benefit side.
If you saw what happened today, there's been some hearings
about a bill in Congress, and the CBO came out
(26:59):
with the report, and the Democrats demagogue did and the
Republicans have this idea about raising the fright to sixty nine.
It could be sixty eight, whatever it is. But I
just think if you're gonna be realistic, and this, by
the way, applies to solving the deficit problem, you're gonna
have to have some decline in spending along with some
increase in revenue.
Speaker 3 (27:19):
All of that's true. I'm getting the rapper.
Speaker 1 (27:22):
Well, I'll just let me because we have a full
roster of calls right now, let me sneak one more
in here. And Edie, who is in Columbia, South Carolina. Edie,
welcome to the middle. What do you think about social Security?
Speaker 15 (27:35):
Well, thank you so much for taking my call. Yeah, Honestly,
I feel like this is deja vous all over again,
because we had this discussion in the late nineties. There
were tons of hearings all over Capitol Hill and all
over the country on how to reform Social Security. First,
I would like to say to Gary, I just watched
(27:55):
my father go through the same thing he's going through,
and my heart goes out to them. One thing that
hasn't been mentioned yet is the surplus that we've talked about,
the two percent that was build and not build that
was accumulated on Social Security, called the Trust Fund. You know,
(28:15):
everyone feels like that's going to be there and giving
Social Security a few extra years, But in truth, that
trust Fund was actually used as a loan to fund
better government programs. So I mean, it's it's just taxing
all over again. And you know, I feel like the
Reagan and tithononeial reforms weren't really reforms. They were simply
(28:37):
tweaking around the edges. Real reform could come, even though difficult,
could come from something like for young people making part
of this a personal retirement account so that they could
accumulate wealth over the time of their lifetime, have an
account that they could then own and pass on to
their children and therefore you know, actually you know, had
(29:02):
generational wealth that would you know, dramatically reduce poverty in
the company.
Speaker 1 (29:07):
Let me ask let me ask Julia Cornado about that. Julia,
it sounds a little like privatization of some of social security.
But yeah, what do you think about that idea?
Speaker 8 (29:16):
Well, we did explore that in the nineties. You know,
there was a few proposals. One was to invest the
Social Security Trust Fund in the stock market instead of
government bonds. That was problematic because of course, who gets
who makes those decisions and you know, and and is
there room for you know, how do you decide to
(29:39):
invest who controls those investments was was an issue. The
other proposal was individual accounts within social Security and I
actually went on a journey myself as an economist looking
into this policy. I thought that that was a great idea,
again for the reasons outlined that, you know, building individual wealth,
having more ownership. The details of it, the cost, the
(30:03):
administrative costs of individual accounts are astronomical.
Speaker 1 (30:07):
Well, Tolliver, as we've been mentioning, Social Security started in
the wake of the Great Depression.
Speaker 2 (30:13):
Yeah, the Social Security Act was signed into law by
President Franklin Delano Roosevelt in nineteen thirty five. Here's FDR himself.
Speaker 16 (30:22):
Because it has become increasingly difficult for individuals to build
their own security single handed, government must now step in
and help them lay the foundation stones, just as government
in the past has helped lay the foundation of business
and industry. We must face the fact that in this
(30:43):
country we have a rich man security and a poor
man security, and that the government owes equal obligations to.
Speaker 2 (30:52):
Both government government government.
Speaker 1 (30:55):
You know, you know, I got to watch so many
FDR videos to get right for that clip, and uh,
he was really I mean, he got really energized and
excited in some of them. But that accent is really
quite something.
Speaker 2 (31:08):
You're gonna be talking like him every.
Speaker 1 (31:11):
People will think that that's how we talk.
Speaker 3 (31:13):
You know.
Speaker 1 (31:14):
Eighty years from now, we'll be right back with more
of the middle. This is the middle of Jeremy Hobson.
This hour, we're asking you, will social Security be there
for you when you needed? And what, if any reforms
would you like to see. You can call us at
eight four four four Middle. That's eight four four four
six four three three five three. I'm joined by CNBC
(31:34):
senior economics reporter Steve Lesman and economist Juliette Coronado. And
let's go to Lee, who is in New Orleans. Lee,
welcome to the middle. Go ahead.
Speaker 17 (31:45):
Hey guys, Hi, I'm from the government, and I'm here
to help.
Speaker 3 (31:50):
Government.
Speaker 17 (31:52):
I know a familiar sound. I have a couple of questions.
Forgive him if I don't get the fact exact. But
didn't we transfer the bulk of the money at some year,
you know, one hundred years back, just the years back,
whatever it was, to the general fund, Like there was
(32:13):
a pile of money and they just switched it over
to the general fund, diluting the amount of money that
would still be there had it been left in its
own original stage.
Speaker 1 (32:27):
Steve, this is hey Lee, stay stay there, leave but
Steve Lee, spend Why don't you answer that question?
Speaker 3 (32:33):
Lee?
Speaker 9 (32:34):
You remember Al Gore talking about the lock box lock box, right,
There is no lock box.
Speaker 3 (32:40):
There never was a lock box. It's all just government money.
Speaker 9 (32:44):
It's just this what do you want to say, this precept,
this big notion that the money that comes in, just
like the highway money for the gas tax, is supposed
to go to roads. It doesn't always go to roads
or the notion that social security it doesn't work that way.
We had a big excess in social security tax payments
(33:08):
or revenue, and that funded the government for a while.
It just reduced the amount of funding the government had
to do. So there's this I don't.
Speaker 17 (33:17):
Know, okay, So from the more point made, the social
security should be fairly solvent. And it's a political hot
potato the they toss around every year. But I have
a brother who's a Social security judge, and he told
me some of the most ridiculous things. Wasteful spending on
(33:37):
social security's part of social security disability. People that work,
they're fifty years old come into his court and say, oh,
I can't get a job. I needs help.
Speaker 3 (33:48):
And they look.
Speaker 17 (33:48):
He looks back and goes, mister so and so, mister
John Doe, you've never had a job. But we're paying
these guys found dollars a month for the rest of
their life. They've never put a penny into it.
Speaker 9 (34:01):
Uh.
Speaker 17 (34:01):
He said, it's fraught with fraud, it's fraught with wasteful spending.
It's ridiculous. It's a typical bureaucratic uh debacle, you know.
And and the dichotomy is I'm an old fossil now.
I've been putting in since I had a paper route,
And am I gonna get it when I'm When I'm
(34:21):
just a few years down the line, I'm sure it's
still gonna be there. But this whole dichotomy of the
inverted pyramid where not as many youngsters are putting in now,
I mean, let me.
Speaker 1 (34:34):
Let me, let me take that to our guests, and
I will say that the only reason I let you
ask two questions is because I love your accent from
New Orleans. It makes me want to go there right away.
Speaker 3 (34:41):
But Lee, thank you for that.
Speaker 1 (34:43):
Let me let me go to Julia Cornat Julia.
Speaker 3 (34:46):
Uh.
Speaker 1 (34:47):
Disability is a is a part of Social Security, just
like survivor benefits are a part of social security. The
main portion, though, of social Security is for senior citizens, retirees.
Speaker 7 (34:57):
That's right, That's right now.
Speaker 8 (34:59):
Disability actually, in terms of the overall budget is quite
a tiny share of it. And one of the really
interesting things we've seen in the last oh, I'd say
ten years is that actually people we do see people
moving off the disability roles. When the job market is strong,
you actually see people. It's more worth it to go
(35:19):
and get a job, and so, you know, I'm sure
there's people that you know, maybe don't deserve the benefits,
but really that's not the biggest problem that the program faces, Tulliver.
Speaker 1 (35:32):
I know a lot of comments are coming in online
as well.
Speaker 2 (35:35):
Absolutely Dion in Desert Hot Springs, California says, I believe
that one solution would be for our wealthy people, especially
members of Congress, to be booted off the program the
same way a welfare recipient would if the latter made
too much money. I believe they could reapply should their
financial situation change, but if they are rich, they don't
need the safety net.
Speaker 1 (35:55):
Wait wait, wait, Tulliver, Actually that's a really, that's a really,
that's something hasn't come up yet. But Steve Leasman means
testing people that are rich shouldn't be able to get
the benefits. What about that idea?
Speaker 9 (36:07):
Yeah, well, then you create essentially a welfare program. I mean,
that's okay, if that's what you want to do, and
then and and and and and the program can survive
the politics of that. I think there's a justication. I
do believe also that tax on Social Security does go
up with wealth. I was trying to afford this program.
Understand the taxation on social security. I am not far
from having to solve that problem in my real life,
(36:31):
but but I do believe it goes up with it.
Speaker 3 (36:33):
It's means tested that way.
Speaker 9 (36:36):
But look, it's like I said, part of the solution,
My solution is to take a little piece of everything.
One of the things you hear and folks at home,
I don't think you should buy this is that this
problem won't solve it. This solution won't solve the problem.
Of course, it won't solve the problem. It'll solve a
piece of the problem, as will the tax part, as
(36:56):
will the benefit part, as will this getting to compromise.
And this show is about the middle. And that's what
we lack in this country, is the middle. We don't
have people that come and say, come on, folks, use
your common sense. If you don't want revenue and you
don't want benefits cut, you take a little revenue cut,
and I'll take a little benefits cut, and we'll put
it together and we'll solve the damn thing. So eight
(37:19):
doesn't have to lose sleep at night.
Speaker 1 (37:22):
Let's go to Miles, who's in Edwardsburg, Michigan. Miles, welcome
to the middle What do you think about Social Security?
Speaker 18 (37:29):
Can you hear me?
Speaker 1 (37:30):
I can hear you?
Speaker 18 (37:31):
Yeah, go ahead, Okay, Hey, I think they go to
get rid of the five hundred and sixty thousand limits
and just tax people.
Speaker 1 (37:40):
Yeah, just tax everybody up to a higher level.
Speaker 18 (37:44):
Yes, And then why do you have to have a
limit and get rid of a tax? Don't tax sat
Security to when people penalize them for working, they're still
paying taxes, they're paying federal, city, state, county, and just
let them keep working and they're paying them to. So Security,
bad medicare all.
Speaker 1 (38:02):
Right, myles, thank you. You know, actually, Julia Cornado Donald
Trump one of the so there, if you look at
what the two candidates want to do about Social Security,
the thing that Donald Trump has proposed is not taxing
people on their Social Security benefits, which the experts have
said would actually make the problem. Harris hasn't talked about
it in the campaign, but when you go back and
(38:23):
look at some of her previous statements, she has talked
about taxing people beyond that one hundred and sixty eight
thousand dollars cap. But yeah, your thoughts there.
Speaker 8 (38:35):
Again that that is the low hanging fruit. You don't
necessarily need to eliminate like eliminate the cap altogether. You
can just move it up a lot higher. But that
is the easiest way to raise a lot of revenue.
That that is the lever that he gives you the
most bang for your buck. And then you know, as
Steve said, you maybe you need to balance it with
(38:57):
some benefit adjustments, and that can be done as well.
You know, not taxing Social Security benefits makes the program's
finances worse, so that would be going the other direction.
But in general, you know, if you look at the
kind of the middle household, that middle median household down,
(39:17):
social Security has done a phenomenal job protecting people's well
being in a very stable, secure way. And most proposals
look to keep that, to maintain that, to not balance
the program on the backs of the middle but to
just take a little bit tax the higher income people
(39:39):
a little bit more and and maybe adjust the benefits
at that level as well. And again it can be
done while protecting the middle down.
Speaker 1 (39:50):
Let's go to William in Philadelphia. William, welcome to the middle.
What do you think about Social Security?
Speaker 19 (39:58):
Well, I bless social Security as far as I'm concerned,
because social Security is helping me survive. That's the only
income I have.
Speaker 1 (40:14):
Are you worried about it going away?
Speaker 19 (40:18):
It will never go away. And let me tell you something.
This is just my opinion. If anybody in Washington says
it's going to go away, you think that January sixth,
twenty twenty one riot was something you don't want that.
(40:43):
Let me tell you something. In my opinion, you do
not want that. I've never worried about social Security. I'm
seventy two years old now and I never worried about it.
Because of what I just said.
Speaker 1 (41:01):
You think people will be out in the streets if
they made any changes. William thank you for that call.
And Steve Leasman, you know, we can't talk about this
in a vacuum. There are a lot of issues that
are going on right now. But if part of the
issue is people paying into Social Security versus the amount
of people who are taking the benefits, what about immigration?
Does that fit into this discussion?
Speaker 9 (41:22):
Yeah, cue the hate mail here, because this is where
I'm going to get it. One of the rules of
economics is there's no free lunch. But immigration is probably
the closest thing to a free lunch for Social Security
as we could possibly get. The deal is this, immigrants
come in, they are younger, they work longer, and especially
(41:43):
by the way, undocumented immigrants, they tend to pay into
the Social Security system. Sure, some of them work off
the books. We'll talk about that a little bit more
in a second, but to the extent they're on the books,
they pay into the system, and they do and they
are not eligible for the benefit of Social Security. Now,
(42:04):
there is a great debate about how many undocumented immigrants
are paying into the system. What I understand to be
the case is that employers tend to be more concerned
about not paying taxes for their undocumented immigrants work than
they are hiring an undocumented immigrant, because the penalties are
(42:29):
so much more severe for that in terms of back taxes.
So there's an argument about that. I think people would
many people might say, well, they're undocumented immigrants, they're not
paying taxes. We do not believe that's the case. There
have been several studies that they tend to put billions
of dollars into the tax system. Yes, there are other
(42:49):
costs that to the undocumented immigrants, but they also tend
to pay taxes and cannot receive the benefits. I don't
know if our economist Julia Carnado would qualify that as
a free lunch, because that would be a violation of
economic theory.
Speaker 7 (43:04):
Julia, I mean inflation this get.
Speaker 8 (43:07):
An earlier caller spoke to the demographic challenges of the program.
I mean, at the end of the day, the reason
we're having this challenge is that population growth slow and
so we have this bulge of the baby boomers that
are going to collect benefits, and the size of the
generation supporting them through taxes is smaller. One way to
(43:30):
address that demographic challenge is to bring in another cohort
of younger workers through immigration, and in fact, we've kind
of been doing that recently. We've had pretty strong rebound
and recovery and immigration which has had all kinds of
beneficial effects. Again, you know, it's another third rail of politics,
(43:52):
but the reality is it's pooled off the labor market
and brought help bring inflation down. And yes, it means
more workers and more tax revenues going into the social
security system. So it's not a free lunch because ultimately
down the road they'll be collecting benefits too, But it
helps smooth that demographic transition, because we are in a
(44:14):
demographic transition. We're not going back to high growth rates globally.
This is a global phenomenon. The UN projects we're going
to have zero population growth globally by twenty fifty. This
is a reality, folks. But immigration can help ease the transition.
Speaker 9 (44:33):
Jeremy, and I was qualify my remarks though, which is
that I also think we need to rely most heavily
on legal immigration, and we have reduced that over the years.
Compared with say twenty or thirty years ago, those numbers
have actually gone down, and they are, in a sense
a free lunch in the sense that Julia said, they
(44:53):
do come in as younger workers.
Speaker 3 (44:55):
Eventually they do have to get benefits.
Speaker 1 (44:57):
Let's get to Carol, who's in Myrtle Beach, South Caroline,
Carol your thoughts.
Speaker 20 (45:03):
Yes, I have an issue with retiring early at sixty
two years old.
Speaker 10 (45:10):
I retired early at sixty.
Speaker 20 (45:12):
Two and the COVID pandemic was still going on. I
wasn't icee you nurse. I'm no longer an icye you nurse,
but at the time, whenever I retired, I went back
to work to help them out, because some of those
(45:32):
girls were working eight to fourteen days in a row,
and it really got me whenever one girl turned to
me and told me she was so glad she had
the next fourteen days off because she didn't have to
watch somebody die. So in the midst of all of this,
(45:54):
with me trying to help them out because I felt
guilty about leaving, retiring at that age, and leaving the profession,
what ended up happening is I ended up having to
pay Social Security back six thousand dollars because I made
too much that year. My question is is why don't
(46:15):
they let people retire at sixty two and if they're
not able to work, you know, that full amount of
time will then so be it. Don't have a cap
on top of it and make them pay back.
Speaker 19 (46:29):
You know.
Speaker 1 (46:30):
Yeah, Carol, thank you for that question, and also thank
you for helping out in that way and everything you
did during the pandemic. The medical professionals just total heroes
in the pandemic. Julia Cornatto your response to Carol.
Speaker 8 (46:44):
Yeah, No, it's there are ways that we could probably
innovate in the Social Security program and allow people to
maybe draw partial benefits if they don't need a full
income and want to work part time. There are ideas
that we can explore to sort of think about how
to facilitate more flexible transitions instead of just going from
(47:09):
working to not working.
Speaker 7 (47:12):
At all and getting benefits.
Speaker 8 (47:14):
There are ideas that can be explored that would help
exactly what Carol is talking about and.
Speaker 1 (47:21):
Steve your thoughts quick comment.
Speaker 9 (47:23):
First of all, we haven't done enough to honor the
medical professions who work during the pandemic and the unbelievable
work they did. One thing we haven't talked about, Jeremy
real quick is one of the solutions to social security
is growth. And the more we grow the economy, the
more productive we are, the higher our growth rate, the
more tax revenue will generate, the more people are going
(47:46):
to employ. One of the keys to growing is having
the labor force to grow. One of the things to
having the labor force grow is making the workplace more
accommodating for older folks to stay in the workforce. And
what this caller talked about, I think is a very
very important reform that ought to be made that says,
if you're gonna work, you're not going to pay a
penalty on that because we need older workers to remain
(48:09):
in the workforce. It's a big part of how this
nation's going to continue to grow.
Speaker 1 (48:13):
So, Okay, we have actually run out of time, But
Steve Leesman, I'm just going to give you ten seconds
because this is the second most exciting thing you've done today,
beyond on the middle. This is the first people you interviewed,
the Treasury Secretary Janet Yellen. Give us the quick ten
second headline. What did she tell you?
Speaker 8 (48:29):
What?
Speaker 1 (48:29):
What do we need to know?
Speaker 9 (48:31):
Well, she thinks we're heading towards a soft landing, that
she finds inflation under control. She'd like to see the
Fed bring down interest rates, and she would like to
do more on the deficit. But left me a little
bit scratching my head about why she hasn't done more
about the deficit while she's been in office.
Speaker 1 (48:47):
That is CNBC Senior Economics reporter Steve Lee's been fresh
off an interview with the Treasury Secretary and economist Julia Cornado,
president and founder of Macro Policy Perspectives. Thanks to both
of you for joining us, Thank you, and thanks thanks
to all of our callers this hour. Next week, we've
got two shows Tolliver. We're going to be coming to
you with a special edition right after the vice presidential
debate on Tuesday to get your reaction, and we're back
(49:10):
at our normal time later in the week welcoming two
former governors of Tennessee, Republican Bill Haslam and Democrat Phil Bretson,
asking you what the most important issue to you is.
With just one month to go before the election.
Speaker 3 (49:23):
Time is flying.
Speaker 2 (49:25):
You can call in for both shows at eight four
four four Middle. That's eight four four four six four
three three five three. You can also reach us at
Listen to the Middle dot com. You can also sign
up for our free weekly newsletter.
Speaker 1 (49:36):
The Middle is brought to you by Long Nook Media,
distributed by Illinois Public Media in Urbana, Illinois, and produced
by Harrison Patino, Danny Alexander, Sam Burmisdas, and John barth
Are intern Azonica Deshler. Our technical director is Jason Croft.
Thanks to the podcast audience and the more than four
hundred and ten public radio stations that are making it
possible for people across the country to listen to the Middle,
(49:56):
I'm Jeremy Hobson. I'll talk to you twice next week.
Speaker 9 (50:01):
The names names,
Host
Jeremy Hobson
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