>> the president of the social security works joining us in d.c. the budget and entitlement policy director. thank you for giving us your time today. >> thank you for having me. but can we start with a little bit about your organizations but also the perspective your organization brings to the topic of social security. >> i worked for the cato institute, which is a libertarian think tank.

we advise congress and administration of public policy and we have a long history of social security known for the plan to support private accounts. and we are building a new model at this time. >> social security works. i realized there was a lot of misinformation and supposed to provide a sense of security. i forms this organization to educate everyone.

>> the social security administration put out new information about the status of the program and just to summarize, you both know this as well. currently able to pay 100% of benefits. after that the income will pay 79%. the projected fund can pay 100% of total scheduled benefits. what do these new figures mean and how we got here. is reports that come out

congress has a decade. there's no question that congress will act. >> we've seen great gains so i look forward to seeing how it plays out to the degree that finances have been deteriorating, the aging of

american society which is in combination with the decline in fertility americans are having fewer babies than ever before. these factor to social security because it's a pay-as-you-go program and what that means is current workers working today, including myself and nancy are paying for the benefits of current retirees. at a time when retirees were working, they were paying for the benefits of the retirees of that time. social security is a government redistribution program that take today's taxes to pay today's benefits and the trust fund makes up a small portion of the program. but that's only invested in treasury securities.

>> in your mind is congress truly interested in doing something at this point?>> 100%. their bills that are been introduced by democrats. social security is extremely secure and is one shortcoming. is important as it is to make sure that the financing is there, and also the president has taken the same position which is to expand benefits to

require that nobody earning under $400,000 to pay a penny more but to require those in excess of 400,000 to contribute their fair share and that will allow benefits to be increased the republicans have not introduced any legislation, but it's quite clear that they don't want to raise revenue. the only other option is to cut benefits.

>> i'd like to disagree that the benefits are too low. it depends on you are looking at. the name of this program is called the old-age and survivors insurance program. it should be what are we ensuring and i'd argue that the most legitimate is to ensure against poverty. and there are people who still fall below if you have too high

earning that make up a couple, they can cut more than six figures for this couple. in terms of options, the option that nancy mentioned, basically applying the social security tax , the limit is 168,500 after which everyone pays social security taxes and then they pay income taxes. even without increasing benefits further, trying to pay current benefits, listing them would only fund the shortfall by about half. it is not enough and that a quick fix for the program. we need to talk about broader

changes in looking at who receives benefits and how generous they are is a key change that should be on the table. spoke if i can respond to that little bit. social security's wage insurance. in the event of death or in the event of disability where you no longer able to support yourself. it is wage insurance. what most experts say is to maintain the standard of living need about 70 to 80% of your preretirement wages. lower income need a higher percentage because they cannot save themselves. social security, -- for someone

who is high income whose earning hundred and 60,000, it only replaces 20%. private pensions are disappearing we have a retirement income crisis were people are going to require social security more than today's retirees. the solution is to expand social security. the actuaries -- there was a bill introduced that simply tax those over $400,000 on all their income. it raises more money than is needed and insured set benefits can be paid 75 years and beyond.

it increases benefits $200 a month as a third bill -- over 180 cosponsors that's been introduced that has an enormous number of votes across the board increases in caregiver increases caregiver credit and that will be paid through 2066. >> we are inviting callers to

ask questions about the future of social security. different phone lines today. if you're under the age of 40, democats 202-748-8000. if you are between 40 and 65, 8001. if you're over 65, 8002. and if you receive social security benefits and you want to highlight that, please do. this idea how do satisfy those concerns despite any conversation when it comes to social security? >> social security does exist

in a vacuum. we have a robust private retirement saving systems in the u.s. that is working fabulously. we have some of the highest private saving rates among all ocd nations. that other industrialized companies. our system with features like auto enrollment that works through employers with direct deposit as a model for the world. we should not discount that income. especially when we talk about burdening lower net worth working americans with higher taxes in order to finance benefits for americans who simply don't need them. if you are a millionaire yes you pay taxes and to social security as has everyone else, but the government program.

it's not a private account in the way that your 401(k) is. we need to ask, who should receive benefits, what's the right level of benefits for those individuals that need benefits the most, and how can we encourage and support more saving and capital investment so they can have those productivity increases that allow them to thrive and save for the future. but how you prevent changes to people current benefits it means that congress should not wait until 2033. they should take action today. i've been encouraged by the bipartisan efforts of jodey arrington and scott peters to put together a commission for congress to look at a picture

of the federal budget and try to stabilize debt. social security is only one aspect of the problem. it contributes one third of the obligations. if we use all the additional tax revenue, how will we make sure that there's enough revenue available to protect seniors health when they are six because medicare has a greater shortfall. we need to look at the full picture. >> social security, there's an important distinction between insurance. social discerning doesn't add a penny to the deficit. it is financed benefits would be cut across the board, so

it's important -- and just as private pensions, that's how social security's treated and should be treated. it's important to understand what you need for events that are unlikely to happen but serious if they do is insurance and that savings. need life insurance and disability insurance which are benefits that social security provides. but most of us will reach retirement age you don't know it 20 whether you will live to 110 are you will pass with 57. do not know whether you have periods of unemployment or fuel be injured and all kinds of

uncertainties. actuaries snow for groups but they do not know for individuals. that's why what you need for future retirement is insurance. that is what social security provides. it has the best features of the private sector and a 401(k) with none of the disadvantages. that's why it's a solution. >> let's hear for mark in pennsylvania. go ahead. >> i like this topic. you had a chart up a couple of weeks ago that show my shows how much we spend on social security and medicare. i don't know in what universe this is being paid for. we are $500 billion in the hole every year. the democrats want to put more

spending on top of that. it's like putting your house on fire and pouring gasoline on and saying it's not burning down. it was an insurance policy and not a retirement plan. no one has readjusted for the longevity the american people. they planted to be 65 and most people died around 65. they were paying out for 20 or 30 years. i don't understand where you get your numbers. explain how much money we have in the social security trust fund? >> absolutely. i get my numbers from the social security administration from the office of the actuary that looks at this every day. a report that just came out shows how social security has a

cumulative surplus of 2.7 trillion brought in 1.3 trillion in revenue last year alone. so the numbers are quite clear. social security is prohibited by law from paying any benefits unless it has sufficient revenue to cover every penny and has no borrowing authority. it is a creditor of the u.s. 2.7 trillion of accumulated surplus. if you go to the website go to the -- the office of the actuary and click on the publications and look at the 2024 trustee

report and the numbers are all there. you can see every penny including 2.7 trillion of treasury bonds that the money is invested in including interest rates and so forth. it's there for anyone to see. >> i would add that i agree with what nancy said about the financing but it's important to keep in mind that the caller is right. we are hurtling toward a fiscal crisis took the three major credit agencies have taken the step of downgrading the u.s. debt. the third credit agency has turned the credit lading credit rating outlook negative. we are also paying much higher

interest rates now than we were before. how to social security play into that? that $2.7 trillion that nancy mentioned is part of the $34 trillion gross national debt, which is the biggest of the u.s. while social security has trust funds reserved in terms of cash flow because it's a pay-as-you- go program. they were not invested in market assets. they were invested in treasury bonds and where does the treasury get the money from? from current taxpayers. so doesn't alleviate the burden on credit workers especially when the proportion of workers responsible for paying for the benefits is shrinking rapidly. that's where we need to keep in

mind the economic implications drying on current workers that make up a dwindling group compared to the number of retirees, which are expanding how do we make this work without having a severe fiscal crisis where the indiscriminate cost that beneficiaries are facing in 2033 could be smaller than what might happen to more americans if we went to a fiscal crisis. because it's underfunded and another report that i recommend is the financial report of the u.s. government. makes 75 near projections and shows of the unfunded obligations, the gaps between

what the government collects in taxes and benefits, 100% can be attributed to medicare and social security ends one third social security and two thirds medicare. no matter how you look at this issue, we are on a nonsustainable fiscal trajectory. >> let me get this caller in. alexander. >> thank you for taking my call this morning. it was a difference in the outlook of utilization of social security that stood out to me this conversation. one speaker mentioned that it's meant to be wage insurance and the other speaker said it's intended to be protection against falling and poverty in

old age. i had the privilege of working with retirees for living so i see the best of both worlds. i know that social security will become insolvent in about 10 years. so it's not that far off. i understand their challenges to dealing with both. the bureaucracy of the government and inabilities keep a clean balance sheet is the biggest thing to preventing at from insuring wages. but likewise, lack of information to people is the biggest thing keeping them from the robust private retirement plans we have. it would be nice to hear each of you speak about the obstacles in the way of what you believe is going to make this system better and come to some kind of

a consensus. >> is an excellent question. u.s. is the wealthiest country in the world and we are at the wealthiest moment in our nation's history. we have an unprecedented income wealth inequality. when social security -- congress acted in major legislation with social security from 1983, actuaries issued a trustees report that showed that it was incomplete balance for the 75 year period. so what happened? they've said that they did not

anticipate the income and wealth inequality of the 1990s and it took the last decade the income equality has caused social security 1.4 trillion that stayed in the pockets of wealthy americans rather than being contributed to social security. the question of whether we expand it or cut it is a matter of values. it works extremely well and has the advantages -- when on the the disadvantages. the american people, as polarized as we are, american people are united in the

support of social security. 80% of the american people do not want to see it cut and they believe it will be more important than ever. i think what is standing in the way is much of the media reports it as congress is doing nothing when there are a number of bills that are pending in congress but they are very underreported. we need to bring them to a vote and let the american people see where the parties stand. >> thank you for taking the time to call in and chat with us. how do we make sure that more

americans can take it vantage of the robust private saving system that this country offers. education can be part but one of the primary reasons that lower earning americans to participate in the 401(k) system is because it has such strict rules under what circumstances you can take the money out early. and if you make a mistake, you pay a hefty penalty. if you're worried you might need the money may be over the next 5 to 10 years because your car breaks down or your heater needs to be replaced, you won't be willing to lock that up until retirement more than have to pull it in credit. canada has a good plan that congress should look at.

it's for universal savings accounts that not just savings accounts where money is locked up until retirement. it allows people to save for emergency needs for things they might need immediately and leave the money there if they don't need it and it will be there for them in retirement. making it more flexible and have their savings in an account that they can control and invest it would greatly expand participation among that population. >> stephanie. go ahead. >> i want to address the young lady from the cato institute. i am retired and you're saying they want to cut out social security. how can a person live on 1600 a month.

saying everything should be private. i worked over 30 years and contribute to social security. just like every working poor person. the problem is is that rich people are contributing the way they are supposed to. we are the ones contributing. is not fair to us you want to go to private partnership with cutthroat people who take money from poor people. you want us to go to private? the republican party stole from social security during the bush administration and during the reagan administration. tell them to give us the money back.>> for both of you, if you

want to factor in how many people you think depend on social security as their only means of retirement support? >> there were a lot of strong claims in there and i won't have time to debunk all of them. but i would like to say the way it is structured, it is a earning related benefit. if you want to make it more of a welfare program where people pay and without receiving commensurate benefits, that's a discussion we can have but that's not how it is set up. wealthy people contribute. and benefits reflect that. they get lower levels of return on those taxes because social security uses a formula that provides higher benefits for lower earners compared to pre-

retirement earnings and lower benefits for higher earners, which i think makes logical sense because higher earners can supplement with other savings. but we should have a conversation how it can better provide benefits for lower income workers and i think maybe democrats and republicans could find compromise. we had a social security symposium looking at potential reforms and if you look at the united kingdom, it's moved away from an earnings related benefit to a flat benefit that is predictable so you know what you can expect and it makes it easier to figure out how much need to save on your own to

have that level of retirement income the increased benefits for lower earners and increase benefits for caregivers and others that have breaks in employment history. those who have not had consistent high earning histories and they reduce benefits significantly to upper income earners so it's more targeted and provides poverty protection for those who need it the most. this is part of workers comp workers pay and with their first paycheck and pay from the first dollar that they earn. its deferred compensation and insurance.

we have another program enacted in 1972 called the supplemental security income program. was designed to make sure it's a tested program for people with disabilities. one of the architects said the program has not been expanded at supposed to keep people out of poverty congress said was guaranteed to people would not retire into poverty but pace benefits that are only three quarters of the poverty level. has access limits so you can

earn very little income. their bills to expand it, but congress has not taken the step and republicans have not allowed it to be extended. so we want to turn social security into the supplemental security income program.let it wither away. we need to expand both. concern is that no one should retire into poverty. would increase the minimum benefit by which -- to expand the supplemental security income program. >> this is frank in pennsylvania.

>> good morning. i was wondering if you can do anything about predators of social security. i got a nice raise and i social security. they took all the money. is anything they can do about that? >> do want to start?>> you make a good point. one of the important features is there some automatic adjustment every year. it simply designed to ensure that benefits stony road

overtime. that beneficiaries can tread water. but they are sinking. it uses a measure of the cost of living called the consumer price index. that was the only index available in 1972 when congress enacted these automatic adjustments. but they realized that was insufficient and it under measured the cost of living of seniors and people with disabilities spent disproportionally on things like healthcare and less on things like the latest technology where it's been going up faster than inflation. congress directed the bureau of

labor statistics to come up with a new measure. and they did it and put it out every year. congress didn't take the next step to say we will use it for social security and the other retirement programs. sanders bill and president biden have come out using the cpi e. callers right. it's better than not having any private-sector -- don't have and it's an increase. if inflation is a double-digit to get a double-digit increase. but it under measures and should be updated and those

benefits will go up and not the road but even if you live 20 or 30 or 40 years. the older you are, the more you benefits will erode. >> we disagree on the inflation adjustment. was more important to point out is the reason we have to protect seniors from excessive inflation is because of the deficit spending that the federal government is doing with social security and medicare contributing to a large degree to the deficit spending in addition to higher interest rates that the fed is having to pay. it sizes that we should protect all americans from excessive inflation which is a hidden tax that hits people and the bank

accounts and money they have invested in market assets, but if you just have savings, they get eroded from inflation. for lower income workers whose wages are not keeping up, it's a double whammy as savings are eroded and income is declining at the same time. how do we protect all americans including seniors so we don't have this band-aid fixed, but that's to get the federal budget under control and close and balanced and where we stabilize the growth and the debt. to make a broad point, the current u.s. debt is $34 trillion. over the next 30 years congress projects to accumulate four times the publicly held debt

that we've aggregated over the history of our nation just over the next 30 years. it is unsustainable and many independent outlets have said perhaps depending on economic conditions, but it's no longer a sustainable or investors are going to keep up by government debt so we continue to pay medicare and social security benefits without making changes to these programs. so congress needs to work together, which is why fiscal commission is a great vehicle to bring both sides to the table to discuss these issues and put us on a path to reform. but social security does not add to the deficit.

the patchwork system of health insurance has paid the highest healthcare costs in the world with less good outcomes. the answer is to have universal health insurance. medicare for all. was intended to be a first step. president roosevelt proposed -- president truman and president johnson so bullets to incrementally. medicare was added in 1965 for people with disabilities and it's time to put in a program and that's the way to control healthcare costs private as well as public. it will help the deficit issue but it will help families not

have to pay so much for healthcare. >> this is scott. >> thank you for taking my call. i'm glad you can talk about this subject and smile at each other. social security. it's not socialism security. but i want to reiterate what romina boccia said. the debt is $4 trillion. it seems to me that maybe i'm stupid, but how is that sustainable? and who's going to pay for that? were based on class and age and race and leaders are promoting this. but if you have 30% of

younger people paying for 70% of the older people in this demographic breakout, we seem to politicize our differences, it's a scary thing. we can't afford to saddle the younger generation with this enormous tax burden. >> final thoughts. >> i agree that it's not just a question of values. but affordability is also important. what can workers afford and given the aging of society and the benefits that social security is paying, we need to look at more transformative change so it can fulfill its original purpose of providing a measure of poverty protection without undermining the future of america's family.

>> social security in the future will be more important than ever. we need to control healthcare costs by having medicare for all and expand social security. the whole point is to provide basic economic security to the american people. that is a political question. how much do we want to provide for the pooled risk program of social security and how much do we want to do privately. social security will be more important.

we will expand social security, require the very wealthiest millionaires and billionaires to contribute their fair share as i say, the american people will have greater economic security. >> social security works as the web.org is the website for the organization in which nancy altman serves as president. she isthr budget and entitlement policy director. combine her work and lots of future nversation for both of you. thank for giving us your time today thank you. circle today did david pekoske

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