While President-elect Donald Trump has generally pledged “not to touch” Social Security during his forthcoming administration, some experts wonder whether a term-limited president who favors a disruptive approach to governance could instead open a path for reforms.
This includes Jason Fichtner, a former chief economist for the Social Security Administration and current chief economist at the Bipartisan Policy Center, who sat down recently with the retirement income planning experts Wade Pfau and Alex Murguia for a wide-ranging discussion on the latest episode of their Retire With Style podcast.
As Fichtner described, there’s no question among retirement experts that Social Security reform is needed. The insolvency date for the trust fund used to support the payment of retirement benefit under the program is now projected sometime in the mid-2030s. Without changes, benefits could be cut 20% to 30%, or more, for the typical retiree.
This would be an unacceptable outcome for voters and leaders in both of the main political parties, Fichtner, Pfau and Murguia agreed. As such, they stand among the camp of experts that expects Congress and the president will eventually act to shore up the program.
The bigger question is when political leaders in Washington will finally summon the political will to make some inevitably tough decisions. Could it be during the next administration? Or will it take a looming benefit cut to spark action?
“Maybe [Trump] is the guy that wants to come out and say, ‘I’m going to save Social Security,’” Fichtner speculated. “Maybe he will back a commission. Maybe it happens after the 2026 midterms, when he has two more years left in office.”
Whatever comes next, Fichtner argued, it is beholden on financial advisors to help cut through the noise and ensure their clients are making appropriate decisions about when and how to claim their benefits — i.e., decisions based on clear-eyed analysis and not unfounded speculation about Social Security “going away within a decade.”
A Missed Opportunity Under Biden?
During the discussion, Fichtner reflected on the question of whether or not President Biden should have used the first two years of his term in office to act on Social Security. It was a time when his party controlled the House, the Senate and the White House — albeit by very narrow margins.
“It’s just speculation at this point, but I wonder if, had President Biden been a one-term president by choice, whether he could have gotten this done,” Fichtner said. “Had he come out when he was first running as a candidate and said: ‘Look, I’m going to do one term. I’m that bridge you guys all wanted back to bipartisanship. I’ll make all the heavy choices and I won't run again.”
Even after Republicans took back control of the House, a one-term Biden could still have done Social Security reform in a bipartisan way during the last Congress. Now, though, that opportunity has passed.
