WEBVTT - Kiplinger's Housiaux on Candidates and Social Security (Audio)

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<v Speaker 1>That's a Bloomberg business flash. You're listening to Taking Stock

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<v Speaker 1>with Bim Fox and Kathleen Hayes on Bloomberg Radio. The

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<v Speaker 1>Democratic National Convention getting underway into Philadelphia. What role will

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<v Speaker 1>social security play in the debates that will be hearing

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<v Speaker 1>this week? There's a big push to try to get

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<v Speaker 1>younger voters to the polls, but we know that it's

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<v Speaker 1>many times it's older voters that are the most faithful.

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<v Speaker 1>Can anybody touch the third reel of politics in a

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<v Speaker 1>way that we'll get them votes? Are they all going

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<v Speaker 1>to hold back? Join us now? Matthew Hoosier, he's a

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<v Speaker 1>reporter for the Kiplinger Letter, and he's been writing about

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<v Speaker 1>this very issue, suggesting that while Hillary Clinton and Donald

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<v Speaker 1>Trump could both make some proposals in all likelihood, they won't,

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<v Speaker 1>at least not when it comes to cutting Social Security. Matthew,

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<v Speaker 1>welcome to taking Stock. Hi, thanks for having me so

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<v Speaker 1>so far. What have we heard from Miss Clinton and

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<v Speaker 1>Mr Trump on this issue? Well, uh, Mrs Clinton has

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<v Speaker 1>suggested that she wants to expand social Security benefits kind

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<v Speaker 1>of following her party's moved to the last In particular,

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<v Speaker 1>she wants to expand them for caregivers, people who left

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<v Speaker 1>the workforce for a period of time to take care

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<v Speaker 1>of a loud when our family member and therefore weren't

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<v Speaker 1>able to access the Social Security system. Um So, she

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<v Speaker 1>wants to make sure they're going to have a secure

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<v Speaker 1>retirement and to do that. To pay for that, she

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<v Speaker 1>would ask high income earners to pay um a little

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<v Speaker 1>bit more into the system in order to make that work.

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<v Speaker 1>And Donald Trump has also pledged not to touch Social

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<v Speaker 1>Security benefits. His goal is to basically make the economy

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<v Speaker 1>better and therefore have more workers paying into the system,

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<v Speaker 1>and hopefully that will help ease the funding shortfall that

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<v Speaker 1>Social Security is currently projected to face here in the

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<v Speaker 1>next couple of decades. Matthew, to you give us some

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<v Speaker 1>detail on social Security, because it is not just the benefits.

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<v Speaker 1>One third of retirees receive almost all their retirement income

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<v Speaker 1>from the system. Two thirds received more than half from

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<v Speaker 1>Social Security. But yet there is also the Social Security

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<v Speaker 1>Disability Insurance Trust Fund. Tell us about that and whether

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<v Speaker 1>that is also on the table to be debated because

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<v Speaker 1>that's expected to run out of money certainly. Um So,

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<v Speaker 1>that obviously, as you mentioned, is a much more immediate problem.

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<v Speaker 1>Um And Uh, Ultimately it works in the same way

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<v Speaker 1>as the retirement fund does in the sense that it's

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<v Speaker 1>funded by worker contributions in PAYWORL taxes. Uh. And obviously

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<v Speaker 1>last at the end of last year, you had Congress

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<v Speaker 1>work at a deal that basically tacked took money from

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<v Speaker 1>the retirement fund in order to um keep the disability

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<v Speaker 1>funds solvents um for up through I believe eighteen And

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<v Speaker 1>um my, my assumption is our our assumption here at

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<v Speaker 1>that keeping it is that ultimately Congress will end up

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<v Speaker 1>having to act on that here the next couple of years, however,

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<v Speaker 1>on most of the discussion in the campaign season is

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<v Speaker 1>going to be focused on the retirement program because that's

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<v Speaker 1>um the aspect of the Social Security program that voters

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<v Speaker 1>are really really passionate about and really care about. At

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<v Speaker 1>this point, Okay, with Donald Trump pledging not to touch

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<v Speaker 1>Social Security but close the funding gap by pretty more

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<v Speaker 1>jobs and therefore you people have to pay more payroll

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<v Speaker 1>taxes and that will that will offset this deficit. How

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<v Speaker 1>fast would the US economy have to grow? How many

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<v Speaker 1>more people would have to be in the labor force

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<v Speaker 1>working to come close to that? Boy, I'll tell you

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<v Speaker 1>what I am. I am not unfortunately a trained economist

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<v Speaker 1>so I did not was not able to do any

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<v Speaker 1>calculations in that, or was not able to find anybody

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<v Speaker 1>who had done any sort of concrete calculations on that.

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<v Speaker 1>So I could not. But broadly, is there any and

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<v Speaker 1>I mean who who who out there agrees that, yeah,

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<v Speaker 1>just faster economic growth would help close the gap? Or

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<v Speaker 1>is this? I have not known to anybody who's any

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<v Speaker 1>like very reputable economist who has supports or who thinks

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<v Speaker 1>that that would ultimately work. Matthew, Sorry to stay in

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<v Speaker 1>the weeds here, but um you know, you talked about

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<v Speaker 1>this reallocation between the Disability Insurance Trust and the Old

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<v Speaker 1>Age and Survivors Insurance Trust Fund. They've been doing that

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<v Speaker 1>for years. But the Survivor's Insurance Trust Fund, if all

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<v Speaker 1>of the problems are put onto that, then won't that

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<v Speaker 1>just hasten its own shortfall? Um So that would be

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<v Speaker 1>assuming that, uh, ultimately that nothing is going to be

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<v Speaker 1>done about about the funding shortfall. However, we do anticipate

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<v Speaker 1>that at some point before um, you actually get to

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<v Speaker 1>the point where the Social Security program is unable to

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<v Speaker 1>UM fund all of its various liabilities, sometime before then,

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<v Speaker 1>Congress will find a way that sounds like a hope

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<v Speaker 1>as much. I mean, not that that's bad, but I

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<v Speaker 1>mean that does sound like more of a hope than

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<v Speaker 1>anything that's based on practical knowledge. It is it is well,

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<v Speaker 1>it is certainly a hope. UM. The reason that UM,

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<v Speaker 1>I guess we would put it like that is just

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<v Speaker 1>Congress tends not to act unless it absolutely must UM.

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<v Speaker 1>And so we don't anticipate seeing any sort of major

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<v Speaker 1>action on social security in the next four years, with

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<v Speaker 1>the exception of something done to help fund the disability funds,

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<v Speaker 1>which will probably just be similar to the last fix,

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<v Speaker 1>where you're moving money from the retirement's account into the

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<v Speaker 1>disability fund. So if I'm somebody relying on my social

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<v Speaker 1>security UH, in large part from retirement, what what should

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<v Speaker 1>I be worried about? We're not worried about, UM. If

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<v Speaker 1>you're relying on it currently. UM. If you're lying at

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<v Speaker 1>it currently, you shouldn't have to worry about too much.

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<v Speaker 1>None of the major changes that are being proposed are

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<v Speaker 1>going to come into effect, um obviously in the next

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<v Speaker 1>four years, and we don't we don't think, and probably

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<v Speaker 1>not within even if they were to come into effect them,

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<v Speaker 1>they would not affect current social Security recipient. Thanks very

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<v Speaker 1>much for joining us and giving us that view on

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<v Speaker 1>social security. Matthew Hooser is a reporter for The Kipsinger

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<v Speaker 1>Letter based in Washington, d C. I'm pim Fox. My

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<v Speaker 1>co host Kathleen Hayes. This is taking stock are thanks.

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<v Speaker 1>Thank your producer, Reggie basil Our. Thanks also to Sam Lana,

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<v Speaker 1>our producer. Coming up. The Democratic National Conventional kicks off

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