MADISON (WKOW) — The roots of Social Security are anchored in Wisconsin soil. In the 1930s, UW-Madison economics professor Edwin Witte headed the committee that drafted the Social Security program.
Fast-forward to today, where the future of Social Security is central to Wisconsin’s race for the US Senate.
Democratic challenger, Lieutenant Governor Mandela Barnes has held events and removed ads accusing Republican Senator Ron Johnson of trying to make it easier for Congress to cut Social Security cuts.
“We’re fighting to protect our hard-earned benefits,” Barnes said in an interview with WJFW-TV in Rhinelander. “The ones our parents and grandparents have paid their entire lives to, who will enable every Wisconsinite to retire without putting food on the table or having to work past retirement age.”
Johnson wants to make discretionary spending on Social Security and health care, as opposed to guaranteed entitlements. Johnson claims such a change would allow Congress to enact reforms that could prevent Social Security confidence from drying up.
“The senator is trying to save these programs, not put them on the chopping block,” Johnson’s spokesperson, Alexa Henning, said in an email. “His point is that without the fiscal discipline and oversight typically found in discretionary spending, Congress has allowed guaranteed benefits for programs like Social Security and Medicare to be threatened.”
John Witte, Edwin’s grandson and a tax policy expert at UW-Madison, said the concern about making Social Security discretionary is that it then becomes the subject of political wrangling with every budget cycle.
“You should refinance it every year,” Witte said. “That means there would be a battle for funding the social security system at least every two years, and it would come under pressure. And what I think it would do — I can’t imagine this would lead to an increase in Social Security [funding.]”
Witte said the program’s founders feared that same scenario for nearly 90 years and wanted to make sure that funding Americans’ retirement money would not be a political issue.
“The only thing that [President] Franklin Delano Roosevelt insisted, and my grandfather strongly supported and advised, was that it should not be a discretionary, funded every year thing,” said Witte. “That it is funded by a trust, and a trust is a pile of money put in there, and that trust is then managed by a committee.”
Problems and possible solutions
The trust fund that pays out Social Security benefits is on track to continue paying on time through 2034.
In the coming years, there are concerns that the program will come under pressure from an aging population: More Americans will receive Social Security benefits than younger employees who pay the trust.
“That’s one of the most important things that’s going to happen in the United States in the next two decades,” Witte said. “The number of employees compared to the number of retirees will shrink.”
Possible solutions include increasing social security taxes for high earners. Right now, the tax is the same amount for anyone earning more than $147,000 a year. Witte said he believes this number is a bit outdated and that raising taxes on earners who take home more than $150,000 a year could keep the trust fully funded for another 25 years.
Another option is to raise the retirement age under the program. Employees who contribute to the program can currently claim retirement benefits when they turn 62.
“It makes sense to do it because we live longer,” Witte said. “We are living longer, and that means people are accumulating Social Security for a much longer period of time.”
Witte added that that is unlikely as it could crush a candidate’s political ambitions.
Other options include cutting back on benefits paid out or moving to privatization, where workers would put some of their federal retirement savings on the stock market. Previous attempts to privatize Social Security have failed.