Even His Admin Admits ‘Bidenflation’ Is Bankrupting Social Security
In its budget last month, the White House claimed that “the Administration is committed to protecting and strengthening Social Security.” But the recently released annual report from that program’s trustees portrays a different story.
The report demonstrates how the slower economic growth and higher inflation of the Biden years have undermined Social Security’s foundation and accelerated its insolvency. If ever a document illustrated the failures of the Biden administration’s economic policies, and how those failures will harm seniors, this report does it.
Slower Growth in Perpetuity
The annual report, compiled by the Social Security actuary and approved by the program’s trustees — all of them appointed by Biden — projected that insolvency for the retirement trust fund would occur in 2033, one year earlier than estimated in last year’s report. The biggest cause for that change? A lowering of estimates for future GDP and productivity growth “by about three percent by 2026 and for all years thereafter.”
The trustees’ move came “in response to recent economic developments, including higher-than-expected inflation rates and lower-than-expected output growth.” In other words, members of Biden’s own administration admitted that the economy has permanently shifted into a lower gear on his watch.
High inflation and slow growth also resulted in negative real wages, which declined at a 3.43 percent rate in 2022. This scenario, whereby inflation grows faster than wages, places significant pressure on the Social Security program. Because its annual cost-of-living adjustment (COLA) is linked to the increase in consumer prices, a wage base growing more slowly than price inflation means Social Security spending will grow faster than the payroll taxes that fund the program.
Return of Carter-Era Stagflation?
Many Washington policymakers know that, four decades ago this spring, Congress and the Reagan administration agreed on a package of reforms that extended Social Security’s
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