“Social Security’s combined Trust Funds will not be able to pay full benefits in 2034, at which point beneficiaries would face a 21-percent benefit cut if action is not taken,” according to a June press release by the Ways and Means Committee. With Social Security soon not being able to pay for benefits in full, there will likely either be cuts to benefits or tax increases. Unless action is taken, millennials could be getting the short end of the stick – or nothing at all.
A new piece of legislation was introduced on Thursday by Congressman Sam Johnson (R-Texas). This plan seeks to fix some of the problems with Social Security so that it can live on to assist generations to come. The legislation, if passed, would incrementally increase the retirement age from 67 to 69 and increase benefits for low-income workers. According to the Washington Examiner, the plan would also, “change the inflation metric used to calculate benefits to one that shows lower inflation, essentially slowing the growth in benefits, and eliminate cost of living adjustments for high earners.” This legislation sets out to prove that Social Security can be reformed without raising taxes or slashing benefits.
Many Democrats are against this plan, as it slows benefits for the wealthy. Instead of this plan, many democrats have preferred tax increases. This could come either by increasing the Social Security cap or by increasing the Social Security tax altogether. However, while this idea to raise taxes in order to cover current benefits might work in the short run, there is no reason to assume that no new benefits would ever be added. Thus, we must ask, what would happen if more benefits were eventually added? If such happened, would taxes then be once again increased in order to pay for the additional benefits? Using only the method of increasing taxes could lead to a slippery slope of consistent increases of the Social Security tax.
Johnson said in a statement, “For years I’ve talked about the need to fix Social Security so that our children and grandchildren can count on it to be there for them just like it’s there for today’s seniors and individuals with disabilities… My commonsense plan is the start of a fact-based conversation about how we do just that.”
This new plan could be the conversation piece that does this. If anything, this plan would be much more helpful than tax increases would be. For instance, if taxes were not increased, millennials could use the money that they would have been paying in additional taxes to invest in their own future, instead of having the government do it for them.
If our country wants to provide for the millennial generation, it should show millennials that they can be fiscally responsible. Instead of having to force people to pay more money in order to fund a program that they have already outspent, the government could simply spend within the budget that they have. Then, millennials would not have to take the burden of the government’s ill-advised spending habits.
It is better to spend what you have in order to receive what you need than to spend what you don’t have, receive wants on top of the necessities, and then make someone else pay for it. In the long run, being fiscally responsible could help ensure that millennials will not be forced to pay for the spending habits of the generations before them. This would allow for a smaller chance of increased taxes for millennials in the future, which would ultimately create an environment where millennials have a better opportunity to thrive.
