Republican Senator Tommy Tuberville of Alabama has a reputation as a controversial political figure. His trading practices have generated considerable discussion in the stock market – particularly because of the power and influence he has shown.
Recently, he has taken several digs at the country’s Social Security system – from taxing benefits to reducing its funding.
Tuberville made some bold statements during a hearing of the Senate Health, Education, Labor and Pensions Committee: “About 150 million people are going to come here and ask, ‘Where’s our pay money? I could have my Social Security money and taxes. “It took 40 years to get [the stock] to market, and today, it could be worth $8 to $10 million. But, who knows why? The federal government ruined it.”
His comments can be provocative. For example, it’s hard to imagine most Americans earning $8 million in the stock market with the same amount paid into Social Security. But there is an issue behind this. Social Security is in deep financial trouble.
With the Social Security mess, it’s easy to point the finger at federal waste and mismanagement. But in reality, the problems are much older.
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A major issue involves life expectancy. When the Social Security Act of 1935 was passed, the average life expectancy in the US was 59.9 years for men and 63.9 years for women, according to the University of California, Berkeley. Fast forward 90 years and people are living longer: 73.5 and 79.3 years for men and women, respectively, according to the Centers for Disease Control and Prevention. This is more than 20% longer for both sexes, which could not have been predicted when the program was designed.
The second involves rising costs. Even after Congress made radical changes to the coverage, financing, and benefit structure in 1983, the reserves that fund the program are expected to be depleted as early as 2034. Taxpayers will continue to pay into the system, but at that time, Social Security benefits may not be paid in full.
So, when Tuberville envisions a senior getaway in Washington, he might not be too far off.
Speaking of the nation’s capital, you might wonder why lawmakers have failed to act, knowing that the clock on Social Security is ticking, but it’s still about a dozen years away. The answer is complex.
For more than 40 years, Social Security has been called the “third rail of American politics.” That’s because any effort to fix it risks creating so much strife and resentment among voters that it’s considered safe to throw the funding down the road.
Raising taxes could provide a quick and perhaps permanent solution. But in addition to conservative lawmakers opposing it, senior citizens are doing the same – because anything that could save the program could be a hit to their wallets. Andrew G., senior fellow at the American Enterprise Institute. Biggs called it “a game of chicken.”
And while requiring members of Congress to roll up their sleeves may seem like an inevitability, these days it’s more a sign of political wrangling than a solution to a no-nonsense problem.
Arguably, Congress has never been more divided and inactive. Several bills have already been blocked in this election year and there have been cases of a government shutdown.
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