1 00:00:02,200 --> 00:00:05,600 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:05,640 --> 00:00:08,720 Speaker 1: dot Com, the Radio, plus Molobile Act and on your radio. 3 00:00:09,000 --> 00:00:13,360 Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters. 4 00:00:13,400 --> 00:00:17,320 Speaker 1: I'm Charlie plot To dial the SMPNAZDAC all declined. Today's 5 00:00:17,360 --> 00:00:19,880 Speaker 1: stocks were retreating from records as a tumble in the 6 00:00:19,920 --> 00:00:24,160 Speaker 1: price of crude sinks energy shares. West Texas Intermediate Crude 7 00:00:24,160 --> 00:00:26,960 Speaker 1: down two point six percent. Drop there of one point 8 00:00:27,000 --> 00:00:30,120 Speaker 1: to a dollar fourteen to forty three oh five of 9 00:00:30,200 --> 00:00:34,600 Speaker 1: barrel on West Texas Intermediate Gold down six tenths of 10 00:00:34,640 --> 00:00:37,720 Speaker 1: one percent, falling eight ten the ounce the thirteen fifteen. 11 00:00:37,760 --> 00:00:41,640 Speaker 1: We are minutes away from getting latest numbers from Texas Instruments. 12 00:00:42,040 --> 00:00:45,560 Speaker 1: Moments ago, we heard from Gilead Sciences it lowered its 13 00:00:45,640 --> 00:00:49,640 Speaker 1: net products sales forecast for twenty sixteen, sending the shares 14 00:00:49,720 --> 00:00:52,320 Speaker 1: lower and late trading Gilliad down about four and a 15 00:00:52,360 --> 00:00:56,600 Speaker 1: half percent. SMP down six to drop there are three 16 00:00:56,600 --> 00:00:59,280 Speaker 1: tenths of one percent to down down seventy seven the 17 00:00:59,360 --> 00:01:02,560 Speaker 1: dropped there of four tense of one percent. I'm Charlie Pelt. 18 00:01:02,720 --> 00:01:08,319 Speaker 1: That's a Bloomberg business flash. You're listening to Taking Stock 19 00:01:08,520 --> 00:01:12,920 Speaker 1: with Bim Fox and Kathleen Hayes on Bloomberg Radio. The 20 00:01:13,319 --> 00:01:18,400 Speaker 1: Democratic National Convention getting underway into Philadelphia. What role will 21 00:01:18,880 --> 00:01:22,039 Speaker 1: social security play in the debates that will be hearing 22 00:01:22,080 --> 00:01:24,080 Speaker 1: this week? There's a big push to try to get 23 00:01:24,080 --> 00:01:26,320 Speaker 1: younger voters to the polls, but we know that it's 24 00:01:26,400 --> 00:01:30,119 Speaker 1: many times it's older voters that are the most faithful. 25 00:01:30,360 --> 00:01:33,039 Speaker 1: Can anybody touch the third reel of politics in a 26 00:01:33,080 --> 00:01:35,199 Speaker 1: way that we'll get them votes? Are they all going 27 00:01:35,240 --> 00:01:38,319 Speaker 1: to hold back? Join us now? Matthew Hoosier, he's a 28 00:01:38,360 --> 00:01:42,480 Speaker 1: reporter for the Kiplinger Letter, and he's been writing about 29 00:01:42,520 --> 00:01:47,360 Speaker 1: this very issue, suggesting that while Hillary Clinton and Donald 30 00:01:47,400 --> 00:01:50,960 Speaker 1: Trump could both make some proposals in all likelihood, they won't, 31 00:01:50,960 --> 00:01:54,600 Speaker 1: at least not when it comes to cutting Social Security. Matthew, 32 00:01:54,680 --> 00:01:59,120 Speaker 1: welcome to taking Stock. Hi, thanks for having me so 33 00:01:59,120 --> 00:02:02,600 Speaker 1: so far. What have we heard from Miss Clinton and 34 00:02:02,720 --> 00:02:08,240 Speaker 1: Mr Trump on this issue? Well, uh, Mrs Clinton has 35 00:02:08,639 --> 00:02:11,960 Speaker 1: suggested that she wants to expand social Security benefits kind 36 00:02:11,960 --> 00:02:15,440 Speaker 1: of following her party's moved to the last In particular, 37 00:02:15,560 --> 00:02:18,560 Speaker 1: she wants to expand them for caregivers, people who left 38 00:02:18,600 --> 00:02:21,280 Speaker 1: the workforce for a period of time to take care 39 00:02:21,280 --> 00:02:23,480 Speaker 1: of a loud when our family member and therefore weren't 40 00:02:23,520 --> 00:02:26,359 Speaker 1: able to access the Social Security system. Um So, she 41 00:02:26,400 --> 00:02:28,280 Speaker 1: wants to make sure they're going to have a secure 42 00:02:28,280 --> 00:02:30,880 Speaker 1: retirement and to do that. To pay for that, she 43 00:02:30,919 --> 00:02:34,000 Speaker 1: would ask high income earners to pay um a little 44 00:02:34,000 --> 00:02:36,919 Speaker 1: bit more into the system in order to make that work. 45 00:02:37,520 --> 00:02:41,640 Speaker 1: And Donald Trump has also pledged not to touch Social 46 00:02:41,680 --> 00:02:46,679 Speaker 1: Security benefits. His goal is to basically make the economy 47 00:02:46,760 --> 00:02:50,360 Speaker 1: better and therefore have more workers paying into the system, 48 00:02:50,360 --> 00:02:54,000 Speaker 1: and hopefully that will help ease the funding shortfall that 49 00:02:54,080 --> 00:02:57,440 Speaker 1: Social Security is currently projected to face here in the 50 00:02:57,480 --> 00:03:00,520 Speaker 1: next couple of decades. Matthew, to you give us some 51 00:03:00,600 --> 00:03:05,400 Speaker 1: detail on social Security, because it is not just the benefits. 52 00:03:05,600 --> 00:03:09,160 Speaker 1: One third of retirees receive almost all their retirement income 53 00:03:09,240 --> 00:03:12,239 Speaker 1: from the system. Two thirds received more than half from 54 00:03:12,280 --> 00:03:15,679 Speaker 1: Social Security. But yet there is also the Social Security 55 00:03:15,720 --> 00:03:21,239 Speaker 1: Disability Insurance Trust Fund. Tell us about that and whether 56 00:03:21,440 --> 00:03:23,959 Speaker 1: that is also on the table to be debated because 57 00:03:24,000 --> 00:03:28,200 Speaker 1: that's expected to run out of money certainly. Um So, 58 00:03:28,280 --> 00:03:32,040 Speaker 1: that obviously, as you mentioned, is a much more immediate problem. 59 00:03:32,400 --> 00:03:36,480 Speaker 1: Um And Uh, Ultimately it works in the same way 60 00:03:36,520 --> 00:03:39,360 Speaker 1: as the retirement fund does in the sense that it's 61 00:03:39,400 --> 00:03:44,000 Speaker 1: funded by worker contributions in PAYWORL taxes. Uh. And obviously 62 00:03:44,120 --> 00:03:47,400 Speaker 1: last at the end of last year, you had Congress 63 00:03:47,520 --> 00:03:50,840 Speaker 1: work at a deal that basically tacked took money from 64 00:03:50,840 --> 00:03:55,960 Speaker 1: the retirement fund in order to um keep the disability 65 00:03:55,960 --> 00:04:00,520 Speaker 1: funds solvents um for up through I believe eighteen And 66 00:04:00,880 --> 00:04:04,360 Speaker 1: um my, my assumption is our our assumption here at 67 00:04:04,360 --> 00:04:07,680 Speaker 1: that keeping it is that ultimately Congress will end up 68 00:04:07,720 --> 00:04:11,000 Speaker 1: having to act on that here the next couple of years, however, 69 00:04:11,160 --> 00:04:14,640 Speaker 1: on most of the discussion in the campaign season is 70 00:04:14,680 --> 00:04:17,680 Speaker 1: going to be focused on the retirement program because that's 71 00:04:17,839 --> 00:04:20,839 Speaker 1: um the aspect of the Social Security program that voters 72 00:04:20,880 --> 00:04:23,839 Speaker 1: are really really passionate about and really care about. At 73 00:04:23,880 --> 00:04:26,839 Speaker 1: this point, Okay, with Donald Trump pledging not to touch 74 00:04:26,880 --> 00:04:29,760 Speaker 1: Social Security but close the funding gap by pretty more 75 00:04:29,839 --> 00:04:32,520 Speaker 1: jobs and therefore you people have to pay more payroll 76 00:04:32,640 --> 00:04:38,040 Speaker 1: taxes and that will that will offset this deficit. How 77 00:04:38,200 --> 00:04:41,000 Speaker 1: fast would the US economy have to grow? How many 78 00:04:41,040 --> 00:04:42,840 Speaker 1: more people would have to be in the labor force 79 00:04:42,920 --> 00:04:46,080 Speaker 1: working to come close to that? Boy, I'll tell you 80 00:04:46,120 --> 00:04:48,760 Speaker 1: what I am. I am not unfortunately a trained economist 81 00:04:48,839 --> 00:04:51,200 Speaker 1: so I did not was not able to do any 82 00:04:51,240 --> 00:04:53,880 Speaker 1: calculations in that, or was not able to find anybody 83 00:04:53,920 --> 00:04:57,680 Speaker 1: who had done any sort of concrete calculations on that. 84 00:04:57,760 --> 00:05:00,040 Speaker 1: So I could not. But broadly, is there any and 85 00:05:00,240 --> 00:05:02,400 Speaker 1: I mean who who who out there agrees that, yeah, 86 00:05:02,480 --> 00:05:05,080 Speaker 1: just faster economic growth would help close the gap? Or 87 00:05:05,160 --> 00:05:07,880 Speaker 1: is this? I have not known to anybody who's any 88 00:05:08,040 --> 00:05:11,880 Speaker 1: like very reputable economist who has supports or who thinks 89 00:05:11,880 --> 00:05:15,520 Speaker 1: that that would ultimately work. Matthew, Sorry to stay in 90 00:05:15,520 --> 00:05:17,679 Speaker 1: the weeds here, but um you know, you talked about 91 00:05:17,680 --> 00:05:21,919 Speaker 1: this reallocation between the Disability Insurance Trust and the Old 92 00:05:22,040 --> 00:05:25,320 Speaker 1: Age and Survivors Insurance Trust Fund. They've been doing that 93 00:05:25,400 --> 00:05:30,440 Speaker 1: for years. But the Survivor's Insurance Trust Fund, if all 94 00:05:30,480 --> 00:05:34,320 Speaker 1: of the problems are put onto that, then won't that 95 00:05:34,440 --> 00:05:39,159 Speaker 1: just hasten its own shortfall? Um So that would be 96 00:05:39,200 --> 00:05:42,760 Speaker 1: assuming that, uh, ultimately that nothing is going to be 97 00:05:42,800 --> 00:05:48,560 Speaker 1: done about about the funding shortfall. However, we do anticipate 98 00:05:48,720 --> 00:05:52,479 Speaker 1: that at some point before um, you actually get to 99 00:05:52,480 --> 00:05:55,680 Speaker 1: the point where the Social Security program is unable to 100 00:05:56,080 --> 00:05:59,920 Speaker 1: UM fund all of its various liabilities, sometime before then, 101 00:06:00,000 --> 00:06:02,520 Speaker 1: Congress will find a way that sounds like a hope 102 00:06:02,520 --> 00:06:04,359 Speaker 1: as much. I mean, not that that's bad, but I 103 00:06:04,360 --> 00:06:06,480 Speaker 1: mean that does sound like more of a hope than 104 00:06:06,520 --> 00:06:10,720 Speaker 1: anything that's based on practical knowledge. It is it is well, 105 00:06:10,760 --> 00:06:13,880 Speaker 1: it is certainly a hope. UM. The reason that UM, 106 00:06:13,920 --> 00:06:15,880 Speaker 1: I guess we would put it like that is just 107 00:06:16,240 --> 00:06:19,960 Speaker 1: Congress tends not to act unless it absolutely must UM. 108 00:06:20,000 --> 00:06:22,760 Speaker 1: And so we don't anticipate seeing any sort of major 109 00:06:22,800 --> 00:06:25,120 Speaker 1: action on social security in the next four years, with 110 00:06:25,160 --> 00:06:28,960 Speaker 1: the exception of something done to help fund the disability funds, 111 00:06:29,240 --> 00:06:32,840 Speaker 1: which will probably just be similar to the last fix, 112 00:06:32,920 --> 00:06:36,240 Speaker 1: where you're moving money from the retirement's account into the 113 00:06:36,320 --> 00:06:40,200 Speaker 1: disability fund. So if I'm somebody relying on my social 114 00:06:40,279 --> 00:06:44,359 Speaker 1: security UH, in large part from retirement, what what should 115 00:06:44,360 --> 00:06:47,560 Speaker 1: I be worried about? We're not worried about, UM. If 116 00:06:47,560 --> 00:06:50,160 Speaker 1: you're relying on it currently. UM. If you're lying at 117 00:06:50,160 --> 00:06:52,760 Speaker 1: it currently, you shouldn't have to worry about too much. 118 00:06:52,800 --> 00:06:55,920 Speaker 1: None of the major changes that are being proposed are 119 00:06:55,920 --> 00:06:59,039 Speaker 1: going to come into effect, um obviously in the next 120 00:06:59,080 --> 00:07:02,599 Speaker 1: four years, and we don't we don't think, and probably 121 00:07:02,880 --> 00:07:05,400 Speaker 1: not within even if they were to come into effect them, 122 00:07:05,400 --> 00:07:09,360 Speaker 1: they would not affect current social Security recipient. Thanks very 123 00:07:09,400 --> 00:07:11,920 Speaker 1: much for joining us and giving us that view on 124 00:07:12,120 --> 00:07:16,480 Speaker 1: social security. Matthew Hooser is a reporter for The Kipsinger 125 00:07:16,600 --> 00:07:21,520 Speaker 1: Letter based in Washington, d C. I'm pim Fox. My 126 00:07:21,720 --> 00:07:25,000 Speaker 1: co host Kathleen Hayes. This is taking stock are thanks. 127 00:07:25,040 --> 00:07:29,640 Speaker 1: Thank your producer, Reggie basil Our. Thanks also to Sam Lana, 128 00:07:29,760 --> 00:07:35,200 Speaker 1: our producer. Coming up. The Democratic National Conventional kicks off 129 00:07:35,360 --> 00:07:48,680 Speaker 1: in Philadelphia, Pennsylvania. And this is Bloomberg coming up Bloomberg 130 00:07:48,760 --> 00:07:50,880 Speaker 1: Law brought you by ben Zel Bush. 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