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Speaker 1: That's a Bloomberg business flash. You're listening to Taking Stock
Speaker 1: with Bim Fox and Kathleen Hayes on Bloomberg Radio. The
Speaker 1: Democratic National Convention getting underway into Philadelphia. What role will
Speaker 1: social security play in the debates that will be hearing
Speaker 1: this week? There's a big push to try to get
Speaker 1: younger voters to the polls, but we know that it's
Speaker 1: many times it's older voters that are the most faithful.
Speaker 1: Can anybody touch the third reel of politics in a
Speaker 1: way that we'll get them votes? Are they all going
Speaker 1: to hold back? Join us now? Matthew Hoosier, he's a
Speaker 1: reporter for the Kiplinger Letter, and he's been writing about
Speaker 1: this very issue, suggesting that while Hillary Clinton and Donald
Speaker 1: Trump could both make some proposals in all likelihood, they won't,
Speaker 1: at least not when it comes to cutting Social Security. Matthew,
Speaker 1: welcome to taking Stock. Hi, thanks for having me so
Speaker 1: so far. What have we heard from Miss Clinton and
Speaker 1: Mr Trump on this issue? Well, uh, Mrs Clinton has
Speaker 1: suggested that she wants to expand social Security benefits kind
Speaker 1: of following her party's moved to the last In particular,
Speaker 1: she wants to expand them for caregivers, people who left
Speaker 1: the workforce for a period of time to take care
Speaker 1: of a loud when our family member and therefore weren't
Speaker 1: able to access the Social Security system. Um So, she
Speaker 1: wants to make sure they're going to have a secure
Speaker 1: retirement and to do that. To pay for that, she
Speaker 1: would ask high income earners to pay um a little
Speaker 1: bit more into the system in order to make that work.
Speaker 1: And Donald Trump has also pledged not to touch Social
Speaker 1: Security benefits. His goal is to basically make the economy
Speaker 1: better and therefore have more workers paying into the system,
Speaker 1: and hopefully that will help ease the funding shortfall that
Speaker 1: Social Security is currently projected to face here in the
Speaker 1: next couple of decades. Matthew, to you give us some
Speaker 1: detail on social Security, because it is not just the benefits.
Speaker 1: One third of retirees receive almost all their retirement income
Speaker 1: from the system. Two thirds received more than half from
Speaker 1: Social Security. But yet there is also the Social Security
Speaker 1: Disability Insurance Trust Fund. Tell us about that and whether
Speaker 1: that is also on the table to be debated because
Speaker 1: that's expected to run out of money certainly. Um So,
Speaker 1: that obviously, as you mentioned, is a much more immediate problem.
Speaker 1: Um And Uh, Ultimately it works in the same way
Speaker 1: as the retirement fund does in the sense that it's
Speaker 1: funded by worker contributions in PAYWORL taxes. Uh. And obviously
Speaker 1: last at the end of last year, you had Congress
Speaker 1: work at a deal that basically tacked took money from
Speaker 1: the retirement fund in order to um keep the disability
Speaker 1: funds solvents um for up through I believe eighteen And
Speaker 1: um my, my assumption is our our assumption here at
Speaker 1: that keeping it is that ultimately Congress will end up
Speaker 1: having to act on that here the next couple of years, however,
Speaker 1: on most of the discussion in the campaign season is
Speaker 1: going to be focused on the retirement program because that's
Speaker 1: um the aspect of the Social Security program that voters
Speaker 1: are really really passionate about and really care about. At
Speaker 1: this point, Okay, with Donald Trump pledging not to touch
Speaker 1: Social Security but close the funding gap by pretty more
Speaker 1: jobs and therefore you people have to pay more payroll
Speaker 1: taxes and that will that will offset this deficit. How
Speaker 1: fast would the US economy have to grow? How many
Speaker 1: more people would have to be in the labor force
Speaker 1: working to come close to that? Boy, I'll tell you
Speaker 1: what I am. I am not unfortunately a trained economist
Speaker 1: so I did not was not able to do any
Speaker 1: calculations in that, or was not able to find anybody
Speaker 1: who had done any sort of concrete calculations on that.
Speaker 1: So I could not. But broadly, is there any and
Speaker 1: I mean who who who out there agrees that, yeah,
Speaker 1: just faster economic growth would help close the gap? Or
Speaker 1: is this? I have not known to anybody who's any
Speaker 1: like very reputable economist who has supports or who thinks
Speaker 1: that that would ultimately work. Matthew, Sorry to stay in
Speaker 1: the weeds here, but um you know, you talked about
Speaker 1: this reallocation between the Disability Insurance Trust and the Old
Speaker 1: Age and Survivors Insurance Trust Fund. They've been doing that
Speaker 1: for years. But the Survivor's Insurance Trust Fund, if all
Speaker 1: of the problems are put onto that, then won't that
Speaker 1: just hasten its own shortfall? Um So that would be
Speaker 1: assuming that, uh, ultimately that nothing is going to be
Speaker 1: done about about the funding shortfall. However, we do anticipate
Speaker 1: that at some point before um, you actually get to
Speaker 1: the point where the Social Security program is unable to
Speaker 1: UM fund all of its various liabilities, sometime before then,
Speaker 1: Congress will find a way that sounds like a hope
Speaker 1: as much. I mean, not that that's bad, but I
Speaker 1: mean that does sound like more of a hope than
Speaker 1: anything that's based on practical knowledge. It is it is well,
Speaker 1: it is certainly a hope. UM. The reason that UM,
Speaker 1: I guess we would put it like that is just
Speaker 1: Congress tends not to act unless it absolutely must UM.
Speaker 1: And so we don't anticipate seeing any sort of major
Speaker 1: action on social security in the next four years, with
Speaker 1: the exception of something done to help fund the disability funds,
Speaker 1: which will probably just be similar to the last fix,
Speaker 1: where you're moving money from the retirement's account into the
Speaker 1: disability fund. So if I'm somebody relying on my social
Speaker 1: security UH, in large part from retirement, what what should
Speaker 1: I be worried about? We're not worried about, UM. If
Speaker 1: you're relying on it currently. UM. If you're lying at
Speaker 1: it currently, you shouldn't have to worry about too much.
Speaker 1: None of the major changes that are being proposed are
Speaker 1: going to come into effect, um obviously in the next
Speaker 1: four years, and we don't we don't think, and probably
Speaker 1: not within even if they were to come into effect them,
Speaker 1: they would not affect current social Security recipient. Thanks very
Speaker 1: much for joining us and giving us that view on
Speaker 1: social security. Matthew Hooser is a reporter for The Kipsinger
Speaker 1: Letter based in Washington, d C. I'm pim Fox. My
Speaker 1: co host Kathleen Hayes. This is taking stock are thanks.
Speaker 1: Thank your producer, Reggie basil Our. Thanks also to Sam Lana,
Speaker 1: our producer. Coming up. The Democratic National Conventional kicks off
Speaker 1: in Philadelphia, Pennsylvania. And this is Bloomberg coming up Bloomberg
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