Editor's Note: This series examines the Heritage Foundation's effort to transform the government through a process called Project 2025. Lean to the Left writers CJ Waldron and V. Susan Hutchinson explore how allies of Donald Trump hope to increase the power of the presidency, eliminate career government positions, and cede regulatory responsibility to the individual states. It is critical for voters to understand key parts of this manifesto, in context with current and future GOP proposals. The statements in Project 2025 are, at best, misleading with outright lies, twisted interpretations of the Constitution, and personal opinions sprinkled throughout, and much of the document has been incorporated into the GOP Platform. So, beware.
Understanding Project 2025: Social Security
To address the need for a social safety net during the Great Depression, President Franklin D. Roosevelt put together a New Deal for Americans. Part of his plan was the Social Security Act of 1935 to keep older people out of poverty.
Over decades Social Security has had many revisions and become much more complicated than its original concept. With millions of retirees, as well as disabled persons receiving benefits, and with millions more coming to the program in the next ten years, Social Security is inching closer and closer to depletion of funds if nothing is done to prevent it. The Heritage Foundation, responsible for Project 2025, says they have the perfect plan.
How Did Social Security Get Into This Situation?
The Social Security Administration (SSA) recently announced benefits would be reduced by 17 percent in 2035 if Congress does not act. This is a slight improvement over their previous expectation of 20 percent in 2033. The Heritage Foundation website claims the deficits began in 2010 under the Obama administration.
This is far from the truth.
The baby boom after World War II plus several expansions to Social Security, which now include payments to disabled workers and to young families who have lost their primary income earner through death, have contributed to its current slide toward insolvency.
The Nixon and Ford administrations were responsible for amendments that created a new program, the Supplemental Security Income (SSI), and implementing an annual cost-of-living increase. This restructure of Social Security immediately led to funding issues and the payroll tax was slightly increased in 1977.
In George W. Bush’s first State of the Union address in 2001, he stated that Social Security reform had to be done. He wanted to preserve benefits, make the program more financially sound and offer the option of personal savings accounts to younger workers. At the start of Bush’s second term, he was still saying Social Security reform was his top priority.
Bush never accomplished Social Security reform.
The Project 2025 reference to 2010 being the tipping point is based on the American Recovery and Reinvestment Act of 2009, which appropriated money for administrative and information technology needs in SSA. As much as the Heritage Foundation wants to blame President Barack Obama, history has shown there is no one point in time that marks the potential decimation of the Social Security program.
Fiddling With the Retirement Age and Salary Cap
The original age requirement to receive full benefits was 65, but in 1956 an amendment made it possible for women age 62 to start collecting reduced benefits and in 1961 this option was extended to men. During the Reagan administration, in 1983, full retirement age was raised to 67 for anyone born in or after 1960. In addition, anyone between 62 and 67 who wanted to start collecting would now have their benefits further reduced, while anyone postponing retirement until the age of 70 would see more money in their monthly checks.
This plan was intended to discourage early retirement for those who would be at least partially dependent on Social Security and incentivize people to postpone the receipt of benefits until they reach 70.
This attempt at “reforming” Social Security to ensure funds would be available did not accomplish its goal because, well, here we are 41 years later still trying to keep the program afloat.
The other critical component of Social Security is the wage base or salary cap. This is the maximum salary an employee must earn before they no longer pay Social Security taxes. Over the last ten years there have been several significant increases to the base. In 2014 a person had to make $117,000 or more before they stopped paying.
Today, the base is $168,600 mainly due to two large increases of 9 percent in 2023 and 5.2% in 2024. These increases, under the Biden administration, give Americans an indication of where the Democrats think money should be coming from to put Social Security on a path to solvency.
And it is not the dwindling middle class footing the bill.
The Radical Right Have the Solution
Social Security benefits are distributed from the Old-Age and Survivors Insurance (OASI) Trust Fund, while disability payments come from the Disability Insurance (DI) Trust Fund. Employers and employees both contribute to these trusts, but at different percentages of gross income. Currently, the OASI contribution is based on 5.3 percent from both employer and employee up to the wage cap. The DI is solvent through at least 2097 while the OASI, as stated above, will start running short of funds in 2035 when the SSA will be forced to reduce payouts to keep the program going.
Calls by conservatives for cuts to Social Security are intended to reduce administrative costs, which only account for only 0.4 percent of the OASI budget. House Republicans have proposed a budget that calls for a $450 million cut to SSA administrative costs.
As part of their solution, it appears the Heritage Foundation and House Republicans want to defund the Social Security Administration, all while claiming that their plan will not cut Social Security payments. As OASI sees an ever-widening gap between money coming in and money going out, it is very clear that the GOP Congress just wants a fix to one side of this equation.
The other component of the conservative solution is to, again, raise the retirement age, this time to 69. Does raising the age at which you can collect full benefits add enough money to fill the coffers of the OASI fund?
It does not.
If Reagan’s Social Security reform of raising the age worked, we would not be looking at 17 percent reduced benefits in about 10 years. Raising the age people can collect full benefits is an attempt to force Americans to stay in the workforce longer hoping they will die before they can collect the money they paid into the system. And now, younger generations will now have to compete for jobs with millions of more people who would have retired.
Regarding Understanding Project 2025: Social Security, the Heritage Foundation’s webpage on Social Security and raising the minimum age makes for an interesting fictional read. They claim Social Security “sought to protect against poverty in old age and to prevent younger generations from bearing the financial burden of that protection.” They go on to say today’s younger generation bears “100 percent of the program’s costs as every dollar of Social Security benefits comes straight out of current workers’ paychecks instead of from retirees past payroll taxes.”
Sorry, what?
Do they think SSA originally had separate accounts for every person working in America that their taxes went into for retirement? And that you could only collect the exact amount you put in and now this is no longer true? So, raising the retirement age forces you to add more money to “your” account so you have more when you retire instead of using money your grandchildren are contributing. The Heritage Foundation also uses life expectancy to justify why the minimum age needs to be raised and as generations live longer it should be continually adjusted.
There are many questions about the knock-on effect of this plan to the economy and labor, but that is for another day.
The glaring omission from the conservative plan to make SSA solvent is the wage cap. As we all know the GOP and think tanks like the Heritage Foundation are all about making the rich richer at the expense of the working class.
It is not an oversight that they do not want to raise the wage cap higher to bring in enough money to OASI solvent. You don’t have to be a mathematician to figure out that increasing the amount coming in is the only sure way to have funds for the future. There is variability as to when people want or need to retire, which may include supplementing their retirement plan with Social Security or if they want to retire earlier than 69 and accept reduced payments. This variability always will affect the money going out part of the equation.
Potential Effects of Not Fixing Social Security Correctly
Most, if not all retirees craft a very careful budget for their last years of life. Some have substantial retirement funds from IRA or 401k accounts and may need very little from Social Security. The latest data from September 2023 shows about 52 million retired persons are collecting Social Security benefits. Half of the people age 65 and older get half of their income from Social Security and 25 percent rely on it for at least 90 percent of their income.
The average monthly benefit is $1918 before deducting Medicare premiums. Medicare increases their premiums annually and the Social Security cost of living increases may or may not cover these added expenses. If they do, there can sometimes be very little increase in monthly Social Security checks.
Retiree budgets can include the high cost of prescriptions if they have conditions, such as diabetes, heart disease or cancer. Housing costs like mortgages or rents and utilities also need to be included when planning for retirement as well as any property taxes
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Any reduction to Social Security payments can mean the difference between surviving and living a quality life. A 17 percent reduction, as proposed for 2035, means only $1592 less the Medicare premium, which will continue to increase every year.
Add inflation or corporate greed into the mix with these reduced benefits and some retirees may have to make decisions on whether they can afford to buy needed medication or food. Before COVID-19 there were already approximately 5.2 million seniors facing food insecurity. The pandemic made it worse.
It is critical for America’s future that a long term, final fix to Social Security be implemented as soon as possible.
The final solution is not that envisioned in the Heritage Foundation’s plan for 2025. All that plan does is kick the can further down the road and make it another generation’s problem.
Franklin Delano Roosevelt would be appalled.
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