Two presidential candidates gave starkly different views on Social Security reforms yesterday (January 10) as the fifth Republican primary debate kicked off for the 2024 election year.
The candidates — former South Carolina Gov. and U.N. Ambassador Nikki Haley and Florida Gov. Ron DeSantis — took the stage last night as former President Donald Trump, the GOP front-runner, declined to participate and chose instead to hold a town hall. (Former New Jersey Gov. Chris Christie dropped out of the race earlier in the day.)
Hosted by CNN, the debate was held at Iowa’s Drake University just five days before the January 15 Iowa caucus, the first-in-the-nation GOP presidential primary.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Social Security’s solvency and retirement age
CNN moderator Jake Tapper kicked off the Social Security portion of the debate by referring to the 2022 annual report of Social Security Trustees, which found that the Social Security Administration will be unable to pay full benefits by 2034 if Congress does not take action on funding.
Tapper asked DeSantis if he still stands by his previous statement to not “mess with” Social Security. “Does that mean you have committed to never raising the retirement age and never cutting benefits?”
DeSantis responded that a promise has been made to older adults, who’ve paid for their benefits. “Every single paycheck that you’ve had your entire life, they've taken money out of,” he said, looking into the camera. “That promise needs to be fulfilled.”
Life expectancy has been decreasing in the last five years, he said, “so I don’t see how you can raise the retirement age when our life expectancy is collapsing in this country.”
When pushed for clarification on whether he would consider raising the retirement age for younger adults, as opposed to current older adults, DeSantis said he would not raise the age in the face of declining life expectancy.
Haley took a different view. “What I’ll tell you is Social Security is going to go bankrupt in 10 years. Medicare is going to go bankrupt in eight,” Haley said. “We have to keep our promises to seniors, but we also can’t put our head in the sand.”
The retirement age should be increased for those in their 20s, however, to reflect life expectancy, she said. When Tapper pressed her on that point, Haley said that those in their 20s should plan on it to be increased to reflect more of what life expectancy will be.
“We have to go and look at what we can do to get out of this. We want to make sure that everybody who was promised, gets it. But we also want to make sure that our kids have something when they get it, too,” she said.
Are their claims on target?
According to the Social Security Administration’s chief actuary, who is making a concerted effort to quell fears over dwindling reserves in the trust fund, there is a risk that Social Security benefits will be reduced in 10 years, but the trust fund will not completely run out of money. The probable “worst-case scenario here is that we, within 10 years, reach a point where we can only pay about 80% of the level of benefits that are scheduled or intended into law by Congress as of that point in time and going forward,” Steve Gross, chief actuary, said last year.
According to data from the Poynter Institute’s PolitiFact, there is data that supports each candidate’s claim regarding life expectancy.
Life expectancy rose from 1960 to 2018, according to the data. But in 2020 and 2021, life expectancy fell, which may be due in part to the coronavirus pandemic, the data shows.
But there was also a slight rise in life expectancy last year, according to preliminary data.
COLA increases
DeSantis said he would work with both sides of the political aisle, but “I am not going to mess with seniors’ benefits in this high-inflation environment.” Social Security’s cost of living adjustment (COLA) is not enough to cover rising costs, he said.
According to the Social Security Administration, the purpose of the COLA is to ensure that the purchasing power of Social Security benefits and SSI payments is not eroded by inflation.
Haley said that, instead of COLAs, increases should be based on inflation. “We limit benefits on the wealthy, and we expand Medicare Advantage plans, which seniors love,” she said.
DeSantis also said that Social Security had “massive surpluses” for decades but that Congress spent those surpluses. "They have a big problem with that so, number one, we need term limits for members of Congress,” he said, adding that a balanced budget amendment to the U.S. Constitution is needed, along with the allowance of a line-item veto for the president.
RELATED CONTENT
-
Healthcare Costs Top Concerns For Many Voters This Election Year, Study ShowsThe top financial worries for most Americans are unexpected medical expenses and healthcare costs, according to a new KFF study.
-
Starbucks Is Making Its Stores More Accessible. Here's How.
The coffee chain's move comes at a time when the number of older adults with disabilities is expected to rise.
-
Social Security Board Nominee Grilled Over Views on Program Reforms
Candidate questioned on Social Security privatization, raising retirement age and benefit cuts during Senate hearing.
-
Medicare Advantage: CMS Wants Your Feedback. Here's What To Know
CMS seeks data-related input on the Medicare Advantage program in a push to improve transparency among the myriad of plans offered.
-
Medicare Advantage Enrollee Numbers Are Rising — Here's Why
Enrollment in Medicare Advantage plans has outpaced expectations, but people should use caution when viewing these plans, expert says.
-
Insulin Now Available for $35 a Month for Many Americans
Insulin price caps from Eli Lilly, Novo Nordisk and Sanofi take effect this month.
-
President Signs Stopgap Bill To Prevent Government Shutdown
The short-term funding legislation sets deadlines to keep the lights on at key government agencies till March 8 and 22.
-
Drugmakers Hike Prices on 775 Drugs So Far This Month — Report
So far this month, drugmaker price hikes have hit hundreds of brand-name drugs that treat conditions including diabetes, asthma and heart disease, a new report shows.
