Political pundits, and millions of Americans, seem to love weighing in on the credentials and qualifications Donald Trump brings to the presidential race.
There's nothing wrong with that -- all top candidates should be vetted thoroughly before being handed the keys to 1600 Pennsylvania Avenue in Washington D.C.
But the stakes are raised when it come to economic issues, particularly Social Security, one of our nation's greatest challenges going forward. There's a major solvency issue in this guaranteed income safeguard, and by 2033, only 80% of benefits will be paid out unless there's a radical change. And Trump may just have the smart ideas for reform.
By and large, Republican and Democratic pols differ on Social Security in significant ways.
The former cohort wants to increase the retirement age on Social Security, to ensure there is enough money for Americans when they call it a career. The latter wants to keep the retirement age where it is now, but hike the payroll tax cap to raise funds to protect Social Security. (Currently, the full benefit age is 66 for people born in 1943-1954, and it will gradually rise to 67 for those born after that time period. Early retirement benefits will continue to be available at age 62, notes the National Academy of Social Insurance.)
Trump's policy leans, not surprisingly, to the GOP's side of the table, but does include some critical caveats. First, Trump is against any cuts to Social Security, and he's also against raising the retirement age for Social Security recipients.
In an October, 2015 speech, Trump issued a call for wealthy Americans to "voluntarily" give up their Social Security benefits. "I have friends that are worth hundreds of millions and billions of dollars and get Social Security," he said. "They don't even know the check comes in." Trump for president said he could save money for Social Security by "getting rid of fraud."
Trump also notes that Social Security is, as he is known to say, a "deal" between Uncle Sam and American citizens and that the federal government is bound to hold up its end of the bargain.
"It's not unreasonable for people who paid into a system for decades to expect to get their money's worth--that's not an 'entitlement,' that's honoring a deal," he writes in his 2011 book Time To Get Tough. "We as a society must also make an ironclad commitment to providing a safety net for those who can't make one for themselves. Social Security is here to stay. To be sure, we must reform it, root out the fraud, make it more efficient, and ensure that the program is solvent. Same goes for Medicare. Again, people have lived up to their end of the bargain and paid into the program in good faith. Of course they believe they're 'entitled' to receive the benefits they paid for-they are!"
Financial experts say Trump's call to reform Social Security does have some merit.
"Surprisingly enough, Trump's few comments on Social Security could actually be the start of an effective overhaul," says Chris Carosa, a retirement specialist and author of the book, Hey! What's My Number? How to Improve the Odds You Will Retire In Comfort. "It all starts with not cutting benefits to those within 15 to 20 years of retirement -- i.e. those 50 and over -- something only Trump is adamant about."
But here's the rub, Carosa adds. "In order to keep these benefits intact, there'll need to be a total revision of retirement policy for those under 35 -- including proposing what I call a 'Child IRA' for those being born now -- and some sort of hybrid for those in between, i.e. those 35 to 50 years of age," Carosa says. "But we'll only know if Trump's plan will work if and when he starts to elaborate further."
No doubt that reform is needed for Social Security somewhere down the road. "In order for Social Security to remain solvent, the government will have to either raise taxes or cut benefits," notes Barbara Whelehan, assistant managing editor at Bankrate.com. "Neither of these moves is politically palatable. But something has to be done, the sooner, the better."
Whelehan notes that in its most recent report, the Social Security Board of Trustees said that to keep Social Security solvent, revenues have to rise immediately by 2.62% from the current level (which is 12.4%.) "Or benefits for all current and future beneficiaries would have to be cut by 16.4%," she adds. "Or, if benefit cuts were to be applied only to those claiming going forward, the haircut would be 19.6%."
And she agrees with Trump on a particular score.
"I do think it's a bad idea to cut benefits," Whelehan says. "There are too many people collecting Social Security who are flirting with the poverty level right now."