In June, the latest iteration of the Social Security trustees’ report came out. The report provides an overview of the current finances of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds. It also provides a look at the long-term projections for the trust funds. The report projects that the OASI trust fund will be depleted in the fourth quarter of 2032. The DI trust fund is actuarially sound through 2100. However, if OASI and DI were combined, the trust funds would be depleted in the second quarter of 2034.
Either way, based on the current trajectory, Congress will face some tough choices. Lawmakers could allow Social Security benefits to be cut. The OASI trust fund will be able to pay 78 percent of scheduled benefits after depletion.1 Congress can also raise new revenues for the program, reduce benefits, or some combination of both. Another option is to plug the budgetary hole with general revenue.2
If you’ve spent enough time here, you know that I’m a fan of the idea of a bipartisan commission to address the federal government’s fiscal problems, specifically, the Fiscal Commission Act, H.R. 3289. There are other proposals, such as the Sustainable Budget Act, H.R. 222. Another proposal that was recently introduced is the Protecting Retirement Opportunities and Maintaining Income Security for Everyone (PROMISE) Act, S. 4979.
The PROMISE Act is an interesting bill, not just because of what it does, but also because of who is proposing it. The lead sponsor is Sen. Dick Durbin (D-IL). He’s joined by Sens. Bill Cassidy (R-LA), Tim Kaine (D-VA), Thom Tillis (R-NC), Angus King (I-ME), John Cornyn (R-TX), Chris Coons (D-DE), and Alan Armstrong (R-OK). Of the senators on the bill, only Kaine, King, and Coons aren’t in-cycle and will be back in the 120th Congress. Durbin and Tillis are retiring. Cassidy and Cornyn lost their respective primaries. Armstrong is a placeholder appointment and can’t run for a full term. This highlights the precarious politics of the issue. NOTUS notes that the legislation has already garnered opposition from AARP and Americans for Tax Reform.3
What does the PROMISE Act do? The bill doesn’t make any changes to Social Security benefits or taxes. It doesn’t raise the retirement age, change the benefit formula, lift the payroll tax cap, or increase the payroll tax rate. Instead, the PROMISE Act creates a process designed to force Congress to confront Social Security’s finances and develop a plan that keeps the trust funds solvent for at least 50 years.
The process would begin with the Social Security Advisory Board (SSAB), an existing independent and bipartisan federal agency that advises the president and Congress on Social Security. The SSAB would develop a legislative proposal capable of meeting the bill’s 50-year solvency requirement. That proposal would then serve as the starting point for Congress, rather than a take-it-or-leave-it package that lawmakers could only approve or reject.
From there, the PROMISE Act builds on a familiar approach used in past bipartisan efforts on Social Security, including the late-2000s commissions and the various reform panels of the 2010s. When Congress has difficulty reaching agreement on a solution, it has often turned to process-based reforms designed to encourage timely consideration of proposals. Ordinarily, congressional leaders can simply decline to bring up a bill, or a committee can indefinitely sit on legislation.
Congress would still have plenty of opportunity to change what the SSAB proposes. Lawmakers could amend the legislation in committee and offer substitute proposals during floor consideration. However, a substitute would also have to satisfy the requirement that Social Security be adequately funded for at least 50 years. In other words, lawmakers couldn’t replace the SSAB plan with something that avoids the underlying solvency problem and call it a day.
The bill also creates a path to a final vote. If House or Senate leaders refuse to move forward with the legislation, another member could initiate the process. Each chamber would then have up to 100 hours to consider the proposal before voting on final passage. The House could pass the legislation with a simple majority, while the Senate would require three-fifths of senators—60 votes if every seat is filled.
That 60-vote requirement is significant. The PROMISE Act isn’t designed to allow one party to rewrite Social Security on its own. Unless one party suddenly finds itself with a filibuster-proof Senate majority, any package produced through this process would need meaningful support from both parties. Republicans wouldn’t be able to impose a benefit-cutting package over Democratic opposition, and Democrats wouldn’t be able to impose a tax-heavy package over Republican opposition. As I’ve written before, addressing the significant issues with trust fund programs requires a bipartisan solution.
The PROMISE Act creates a mechanism intended to force Congress to solve Social Security’s serious financing problem. Lawmakers would still decide whether the eventual package relies on new revenue, changes to benefits, adjustments to eligibility, or some combination of those options. What lawmakers would have a much harder time doing is acknowledging that insolvency is getting closer and then finding another reason not to deal. Sadly, Congress has become exceptionally good at that when it comes to trust fund programs like Social Security.
Look, Congress’ failure to deal with this problem is a failure of Republicans and Democrats alike. I’ve long been worried about what the future holds for the United States. Recent movement in the bond market is specifically troubling. The yield on the ten-year Treasury has risen from 3.93 percent at the open on March 2 to 4.698 percent at close on Tuesday. The Congressional Budget Office projected that the ten-year yield would be 4.2 percent and gradually rise to 4.4 percent in 2031.4 Any upward deviation means that servicing the share of the debt held by the public will cost more.5
Every member of Congress, regardless of party, and every special interest group, regardless of ideological perspective, who allows this solvable problem to turn into the inevitable death spiral that’s so clearly coming deserves blame for it.
However, 83 percent of scheduled benefits would be paid if the trust funds are combined.
Currently, Social Security can’t use general revenue.
Americans for Tax Reform similarly opposed the Fiscal Commission Act.
This isn’t a theoretical. Outlays for net interest are projected to be $1.039 trillion, or 3.3 percent of gross domestic product (GDP), in FY 2026. A decade ago, net interest was 1.3 percent of GDP. In 2036, it’s projected to be 4.6 percent, or $2.144 trillion. CBO actually gamed this out in April, noting, “If all interest rates—including those on 3-month Treasury bills and 10-year Treasury notes—were 0.1 percentage point higher each year than they are in CBO’s economic forecast and other variables were the same as those in the agency’s forecast, the government’s net interest costs would be greater than they are in the agency’s baseline projections by amounts that grow each year through 2036. If other variables were the same as forecast, higher-than-forecast interest rates would cause deficits to exceed the agency’s baseline projections by $60 billion in 2036 and by $379 billion (or 1.6 percent) over the 2027–2036 period.” Let’s say interest rates are 1 percentage point higher. CBO says its estimates are roughly scalable and that deviations of up to 1 percentage point for interest rates should produce reasonable approximations. On that basis, a 1-point increase would add roughly $600 billion to the budget deficit in 2036 alone and about $3.8 trillion to cumulative deficits between 2027 and 2036.
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