Everyone concerned about governmental waste and overreach is rightfully excited about Elon Musk’s DOGE making necessary cuts to a behemoth that isn’t used to shrinking. However, a visual posted to X by the billionaire himself last week casts a pessimistic shadow over any assertion that cutting or finding waste to eliminate in education, infrastructure, foreign aid, or even welfare programs will make any discernible difference in the ultimate path to insolvency our government seems to be headed towards.
That’s because those outlays are actually quite miniscule compared to the top four elephants in the room: Medicare, Medicaid, defense, and the largest by a ton, Social Security. The problem with those four, of course, is the fact that legislators don’t have the dual political will to do what needs to be done to make them solvent long-term. By “dual political will,” I mean that at any given time, one or the other party might display a willingness, but that display is exactly that, a display, a virtue-signal, and nothing more.
For example, Democrats might say they want to cut defense, but they know Republicans won’t let them. And Republicans might say they want to fix Social Security, but they know Democrats won’t let THEM. And so the cycle goes, with both parties pointing fingers at the other while the train to the abyss keeps barrelling onward with nobody pumping the brakes.
Optimistically, though, the ongoing political realignment, the populist one that includes anti-neocon Republicans and working-class Democrats, the one that got President Donald Trump elected in the most stunning and improbable political comeback in US history, could very well have the ability, if they choose, to actually make some lasting structural fixes to the Social Security system.
Think about it. Historically, a broad, meaningful coalition of Americans has never had the stomach to demand any meaningful changes to this system. The changes proposed by the left seem to be unworkable or 'socialist,' and the changes proposed by the right seem draconian and heartless. What ordinary working person, for example, thinks it's a great idea to increase the payroll tax for poor people or make blue-collar people work their fingers to the bone until they're 75? Meanwhile, rational solutions have always been somewhere in the ideological middle. To get there, however, those of us on our side of the political spectrum need to accept that some of these solutions might, at first glance, seem ‘left-wing.’
Except, they aren’t left-wing. Not really. The ones I'm going to describe are arguably populist, and as such, they fall right in line with something it wouldn’t at all be surprising to see Trump himself propose, should it come on his radar.
First of all, let’s establish the Oxford Dictionary definition of “populism” as “a political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups.” Now, what would most ordinary people be concerned about regarding Social Security? Obviously, the answer is their own ability to retire and draw the funds they need to live a normal life. Unless you’ve managed to become wealthy or save enough for retirement, you’re doubtless quite emotionally invested in the future of the only program you’ll be able to depend on in your elder years. Except Social Security is projected to run out of reserves in 2035, just ten years from now. That doesn’t mean it will cease to exist, but it does mean that cuts are coming that will rock the worlds of millions of people who need it most.
If populism is supposed to address the concerns of ordinary working people, what kinds of changes to the Social Security system could rightfully be defined as “populist”? For starters, here are two:
First, we should significantly raise the maximum taxable earnings or do away with it altogether. For 2025, this number sits at $176,100. Meaning, any income over that amount is not subject to FICA taxes. The problem with this is obvious. If you’re pulling in half a million or a million a year or more, 7.65% or even 15.3% (if you’re self-employed) is pocket change to you. Yet, that money could go a long way to making Social Security solvent. On the other hand, even someone who makes below the poverty line and pays zero federal income taxes still has to pay FICA taxes. Which would actually be fine if there was any guarantee they would reap benefits in retirement. In reality, Social Security is the opposite of a progressive or even a flat tax that affects everyone equally. It affects those who can least afford it the most with zero guarantee of benefits later.
The second tweak we should make is means-testing, or stop giving social security to people who don’t need it. It’s not that ‘rich’ people should be ineligible for life, but they should be ineligible during the years where they have the combination of income, retirement, and net worth needed to live comfortably. Yes, that number should be high, and it should also shift for inflation. And if the person’s financial situation changes, they should be able to apply for, and receive, Social Security. If you’re OK with billionaires receiving Social Security, you’ll never agree with this argument. But I’d wager that most ordinary working people wouldn’t be.
I know what many of you will write in the comments. Some form of, “I paid in, and I should get paid out no matter how much I’m worth,” “This would basically be de facto welfare,” and the ever-famous “It’s my money!” I get it, completely. I’ve felt the same way for most of my adult life. But something has to give. And in reality, Social Security is and has always been a safety net for a population in need of it most. As Warren Buffett has said, “A rich country takes care of its young, and it takes care of its old.” If anyone is deserving of such ‘welfare,’ it is the elderly, especially because ALL of us will someday be included in that number. In truth, the money the government takes for this, if put to the right use, is the best investment a First World society can make.
Long gone are the blue-collar jobs people worked for 35 years and retired with a fat pension. These days, Americans are lucky to pay the bills every month, much less save for retirement. And no matter how much they make, they pay at least 7.65% to FICA, banking on a promise that they’ll at least be able to make the rent when they’re too old to work or even get out of bed. It isn’t ‘socialist’ to keep our promises to these people and ourselves. It’s populist.
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