The Congressional Budget Office’s economic outlook for the next 10 years, released in late January, found that the federal deficit will balloon to 4% of GDP by 2025 from 2.8% today, thanks in large part to entitlement programs like Social Security.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, declared that CBO’s estimates support reining in entitlement spending. However, political analyst Greg Valliere of Potomac Research argued that while many Republicans want to curb entitlement growth—at least Social Security COLA growth—in private, they acknowledge this could be radioactive in the 2016 campaign.
Said Valliere: “We are in total agreement with CBO and virtually all budget experts that entitlement growth will soar by the end of this decade, sending deficits sharply higher by 2019 to 2020. Unfortunately, there’s no likelihood of action on this front. There’s no angry message from the markets, not with the Treasury 10-year bond yield at 1.8%, not with the stock market still relatively strong.”
On Feb. 10, Sen. Bernie Sanders, I-Vt., ranking member of the Senate Budget Committee, released a report stating that Republicans are attempting to “manufacture a crisis” in Social Security by “complaining that it is unsustainable, that it is too generous, […] that there isn’t enough money to go around between seniors and the disabled.” Sanders called such complaints “patently untrue.”
Citing Social Security Administration data, Sanders said that Social Security has a $2.8 trillion surplus in its trust fund and can pay out all benefits to all beneficiaries for the next 18 years.
Periodically over the years, the U.S. government has acted to rebalance funds between the Social Security retirement programs and the Social Security Disability program, Sanders said, adding that such reallocations are “neither controversial nor unusual,” but are a “technical accounting decision.”