By Michael Gold
How can we save Social Security?
The question becomes more urgent each day. The Social Security trust fund will run out of its cash reserve in six years. (The Medicare trust fund suffers a similar problem – it’s anticipated that Medicare will run through its reserve by 2033.)
Social Security’s Old Age and Survivors Insurance Trust Fund will still collect income because of payroll taxes, but it won’t be enough to cover every beneficiary’s checks. The government will only be able to pay beneficiaries about 78 percent of the money due them each month, according to the U.S. Social Security Administration (SSA).
It’s difficult to appreciate the scale of this problem. The trust fund holds about $2.56 trillion in investments in U.S. Treasury securities, or bonds. In other words, the trust fund loans money to the Federal government, which the government then pays out in benefits.
Assets of $2.56 trillion sounds like a lot of money. But not when it’s applied to the number of people collecting benefits every month, which includes me, officially a senior citizen.
The Disability Insurance Trust Fund (DI) holds about $230 billion, but its solvency is not in question until the year 2100. About eight million citizens receive checks from the DI.
The number of recipients collecting income from the Old Age and Survivors Trust Fund is much bigger – about 68 million people. There are approximately 325 million American citizens living in the country. So, we’re talking about twenty percent of the population that is supported by Social Security.
A big part of the problem is that more workers are retiring and collecting benefits. Baby boomers are leaving the workforce in record numbers every year.
There are less people in the workforce who are paying Social Security taxes to support them. We have about three people working for every person collecting benefits from the Old Age and Survivors Trust Fund. Families are having less children who will grow up and work. And the current Administration has largely cut off immigration, which could provide many more workers to pay into the Social Security system and help shore up its financial reserves.
Another factor in the funding problem is the cost-of-living adjustment (COLA) the government applies to every Social Security check each year.
In 2026 the COLA was 2.8 percent. The COLA for 2027 could be an additional 3.5 percent. Every beneficiary will get a 3.5 percent increase in their monthly payment, because of inflation. So, the COLA accelerates the draw-down on the trust fund reserves.
Katherine Anne Edwards, an economist and Bloomberg opinion writer, proposes two solutions. First, she says, “scrap the cap” on Social Security taxes. Employees and employers split a 12.4 percent contribution to Social Security for every paycheck, until the employee reaches $184,500 in income. Whatever an employee makes over that amount is not taxed for Social Security contributions.
This upsets a lot of middle class and poor Americans. There’s a basic issue of fairness involved. Why do people who make all this income get a free ride while the rest of us have to pay into the Social Security Trust Fund?
Edwards’ other big idea is to invest part of the trust fund in stocks and bonds. This is much trickier. It means creating a government department that will pick which corporations to invest in to make a profit.
I see this as a huge minefield for the country. What if the stocks and bonds the government invests in lose money in any given year? The trust fund will suffer. The government could be pressed by Social Security recipients to make up for the trust fund’s losses. The media will not take this event lightly, to say the least.
When the government takes shares in a private corporation, it had better be an emergency. This is what happened in 2008/2009, when the Treasury Department took control of General Motors and Chrysler, because the auto industry was about to collapse. When the crisis passed, the government sold its shares. The Troubled Asset Relief Program (TARP) worked.
The Obama Administration loaned $535 million in 2009 to Solyndra, a California-based solar manufacturer, and the company ended up going bankrupt. This made headlines all over the country and embarrassed the Obama Administration.
Now, the Trump Administration has taken stakes in Intel, U.S. Steel, Westinghouse and a spectrum of other companies in quantum computing, nuclear power, semiconductors and other businesses.
The Cato Institute, the ultimate advocate of free markets, has condemned these moves, with good reason. The U.S. government should not be picking economic winners and losers in the private sector.
Corporations must contend with the free market every day to provide the discipline they need to compete effectively for sales and earnings. Government stakes distort the market, and they open up government officials to conflicts of interest, as Cato has pointed out. The government can’t afford to further betray our trust. The public’s faith in the Feds is already pretty low.
With these investments in the private sector, “The federal government is now acting as regulator, customer, financier, and shareholder,” Cato stated in a July 30, 2026 article on its website.
So, the idea of investing Social Security reserves in the stock market looks like an idea that would be rife with financial pitfalls that the U.S. government couldn’t avoid.
The peril facing the Social Security Trust Fund is rising with each passing day. The national debt will pass the $40 trillion mark very soon. We are spending money like a drunk bachelor party dude in Las Vegas, who’s determined to lay down more bets on his credit card because he’s having such a great time. It’s irresponsible and dangerous.
“If something cannot go on forever, it will stop,” said Herbert Stein, an economist and senior fellow at the American Enterprise Institute.
There is no question that America will either have to stop spending so much on Social Security or somehow expand its funding. The issue is how and when this will occur.
We can plan for it right now and help ease the onset of this crisis. Or we can let things slide until there’s national chaos.
In the Bible, Joseph advised the Pharoah to plan for the seven years of drought by storing twenty percent of the grain during the seven years of robust harvests, so the population wouldn’t starve when famine came. The Pharoah listened to Joseph, the country saved its grain for the future lean times, and Egypt endured the famine quite well.
Joseph’s actions, as highlighted by the Bible, illustrate the benefits of prudence and conservative action – the ability to think and plan ahead because the future is capable of throwing lots of weird and terrible things at us.
Americans today are not prepared for this kind of crisis. We’re generally fat and happy and we don’t see anything but the next store or pretzel shop during our shopping trip to the mall.
We need a great leader like Joseph today.
Saving the trust fund and putting it on a more stable foundation is not glamorous work. It will probably not get a politician more views and “likes” on social media. It will not necessarily help our Representatives, Senators and Presidents advance their careers.
What it will do is help the American people – not only seniors but all working adults and their children who are not fabulously wealthy – anyone who needs a minimal old age safety net in our fiercely competitive capitalist society.
That’s what we elected them to do. They should get to it.
Michael Gold is a columnist for The Yonkers Times. His work has been published in The New York Daily News, The Albany Times-Union, The Hartford Courant and other newspapers. He’s a volunteer trustee with the Putnam County Land Trust.