Few issues are as controversial politically as Social Security. Even when faced with clear evidence of a coming financial disaster for the program, lawmakers in Washington have struggled even to address Social Security's problems, let alone come up with viable solutions.
It's largely in recognition of past failures in Congress to handle Social Security well that some lawmakers want to look at alternative ways of coming up with a viable strategic plan to save the program. Not everyone agrees with the new legislation, dubbed the Time to Rescue United States Trusts Act or TRUST Act for short. Yet it's a game plan that's worked before, and it might be the best bet for a solution this time around as well.
What the TRUST Act would do
Senate lawmakers recently introduced the TRUST Act of 2020, with Sen. Mitt Romney (R-Utah) spearheading the bipartisan effort. In total, 15 senators -- 10 Republicans, four Democrats, and an independent -- cosponsored the legislation. A similar bill has been introduced in the House, with dozens of representatives calling for its provisions to become part of broader legislation to help Americans financially.
Image source: Getty Images.
The TRUST Act is entirely procedural in nature. It doesn't advocate for any particular viewpoint, but rather focuses on how to set up a framework for arriving at a solution. Specifically, the TRUST Act would do the following:
- Require the Treasury Department to report on federal trust funds that could have inadequate funding within the next 15 years.
- Give the Senate Majority Leader, Senate Minority Leader, Speaker of the House, and House Minority Leader the right to name three of their members to a "rescue committee" of 12 lawmakers.
- Charge the rescue committee to make recommendations to fix the problems with each inadequately funded program. Each recommendation would require at least two members of both parties, preventing votes along party lines or 7-5 votes with just a single defecting member of a political party.
- Streamline consideration of proposed legislation from rescue committees through Congress, with the intent of avoiding many of the procedural actions that lawmakers use to delay consideration of controversial bills.
Advocates of the proposal note how serious the financial challenges to Social Security are, and how conventional efforts to find solutions have thus far failed. Opponents characterize the legislation with conspiratorial overtones, suggesting the idea is to allow closed-door discussions that would potentially lead to dramatic cuts for benefits.
Mixed results from past bipartisan efforts
Those who favor the TRUST Act point to the success of the Greenspan Commission in the early 1980s to come up with viable Social Security reforms. The resulting legislation took proposals from both sides of the aisle, raising retirement ages, increasing payroll taxes, and imposing income tax on retirees with incomes above certain thresholds.
Yet that approach hasn't always worked. In 2010, the Simpson-Bowles Commission was charged with ways to cut the budget deficit more broadly. It came out similar compromise positions on Social Security, including raising the retirement age further, adopting a more progressive formula for benefits that would result in higher-income earners getting lower benefits, and using a more gradually rising index of inflation. The commission's main income-generating provision was to boost the wage base cap on payroll taxes to cover a greater portion of overall income. Critics argued that the proposal was too biased toward benefit cuts, with only token efforts to create an ineffective minimum benefit.
Getting outside the Beltway
One key difference between the TRUST Act and past efforts to find compromise is that the TRUST Act would create committees made solely of legislators. The Simpson-Bowles Commission also included six private citizens, and the Greenspan Commission similarly had experts from outside Congress.
With the future of Social Security at stake, those supporting the TRUST Act should find ways to invite others into their discussions. That will give rescue committees the credibility they need to advocate for the American public. Without that input, it'll be hard for the TRUST Act to gain traction in seeking out solutions where others before have failed.
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Will the TRUST Act Save Social Security? - The Motley Fool
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