On Thursday, CBS showed some admirable news judgment on CBS Mornings and the CBS Evening News by choosing to inform viewers about a ticking fiscal bomb many fiscal hawks have been warning about for decades, which is Social Security essentially going broke in the next decade.
Even though it’s being talked about as a Republican is in the White House, it’s still worth giving them credit for acknowledging it as an albatross around the country’s fiscal neck.
“In today’s Money Watch, we’re talking about a scary prediction about the Social Security System. Analysts now say it could run dry within the next decade, by 2033 despite millions paying into it for decades,” CBS Mornings featured co-host Vladimir Duthiers began.
Duthiers posed to CBS Money Watch’s Jill “Dollar, Dollar, Jill” Schlesinger the (false) mindset Americans probably have about Social Security: “[S]o, explain this to me. I’ve been paying, along with millions of other Americans, into Social Security for almost my entire working life through payroll deductions. And now what? It’s not going to be here for me?”
Schlesinger replied Social Security is actually set up by having those “pay in right now for people who are already retired,” not putting money away for our individual selves to use later.
She then explained the real issue, which is the retirement of Baby Boomers while subsequent generations are smaller in size, thus unable to keep up in terms of those able to pay into Social Security:
So, when all of those baby boomers were working their entire lives, there was more money coming into the system than was getting paid out. That extra money created a surplus. That’s the Social Security Trust Fund then things flipped. Baby Boomers, 11,000 are turning 65 every day. They’re now needing their retirement benefits, but there aren’t enough people working, so all of that money that built up, that trust fund, it’s being depleted and over time, by 2033 according to the Social Security Board of Trustees, there will no longer be a trust fund, and there won’t be enough people working. And what that means is the system will only be able to pay out about three-quarters of benefits that have been promised. That’s the math behind this.
Barring congressional action, Schlesinger said the consequences would be drastic with a 23 percent cut, meaning an average check of $2,000 would tumble to $1,540 and thus a huge problem as many retirees “rely on Social Security as their main form of retirement income.”
Co-host Tony Dokoupil closed with a question about to whom do Americans address this issue to. Unfortunately, Schlesinger was most averse to arguably the most sensible solution of raising the retirement age a few years for those still working (click “expand”):
I think that everybody needs to really understand that the system is not going broke. We are talking about a reduction in benefits, and there are actual fixes to the system, unlike Medicare, which is a very difficult system to solve, to actually get it solvent. When you look at Social Security, there are three main ways to fix the system. Congress could. They could say, hey, let’s raise the amount of money on which Social Security taxes are levied. We could just push that cap up. The other thing they could do is they could say, let’s raise the amount of the actual Social Security rate. So we pay 6.2 percent on our wages. Our bosses pay 6.2. What if it were 6.35? Let’s do that and the third one that you hear a lot about, which I’m going to pour a lot of cold water on, is people will say, raise the retirement age, because we all live longer. You know what stinks about that, if you have a physical job, you’re going to tell someone, oh, you know what, just keep doing construction till you’re 78 because you’re going to live longer. It also presumes that you are able to hold on to your job and we know a lot of people in their late 50s and early 60s who can’t. Get involved. Use your voice. This is something where, if you talk to your congressman, this is something they’ll hear.
The CBS Evening News eventually arrived at the topic of Social Security, but co-anchor Maurice DuBois first provided some table-setters about the birthrate and the country growing older with Census data showing “older adults outnumbered children in 11 states” versus “only three states” in 2020 with current birthrates far below the Baby Boom (click “expand”):
DUBOIS: New data from the U.S. Census Bureau shows the number of Americans 65 and older climbed by more than 3 percent last year and, for the first time ever, older adults outnumbered children in 11 states. In 2020, that was the case in only three states. This change has been in the making for more than 60 years.
WALTER CRONKITE: Good evening from our CBS Newsroom in New York.
DUBOIS: When Walter Cronkite debuted as the anchor of the CBS Evening News in 1962, the U.S. census showed youngest and oldest age groups had grown five times faster than middle-age groups in the decade before. As the population aged, the number of people relying on Social Security benefits increased. In 1970, more than 25 million people received benefits, a 4000 percent increase from when the program was signed into law in 1935. [MARY TYLER MOORE THEME SONG] In 1977, the same year the popular Mary Tyler Moore Show bid farewell, President Carter signed a bill that lowered the amount of money Social Security beneficiaries received....Americans 65 and older steadily increased from 12.4 percent in 2004 to 18 percent in 2024, while children declined from 25 percent to 21.5 percent.
It was after all those numbers he stated the fact that “[o]lder Americans continu[ing] to outpace working-age adults...could negatively impact the economy and the ability to keep those Social Security checks coming.”
Schlesinger’s Money Watch colleague Kelly O’Grady took the PM hit and explained Social Security works with current working people “paying into a fund that then gets distributed to folks that have already retired,” which “work[ed] really well when the Baby Boomers were working, because there were more people paying into this fund than there were people drawing on that fund.”
“Now, though, those folks are retiring and there are more people that are drawing on that fund than there are paying into that fund. This is called the Social Security trust. That surplus, it’s being depleted. And the projection is, 2033, that’s going to go away...It just means those checks are going to get smaller,” she added.
With less time to discuss this, O’Grady closed with the simple reality that there’s no genuine appetite to talk about either solution: “Either you and I pay more of our income into Social Security now or we raise the retirement age, neither of which people love.”
To see the relevant CBS transcripts from June 26, click here and here.
