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

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half percent. SMP down six to drop there are three tenths of one percent to down down seventy seven the dropped there of four tense of one percent. I'm Charlie Pelt. That's a Bloomberg business flash. You're listening to Taking Stock with Bim Fox and Kathleen Hayes on Bloomberg Radio. The Democratic National Convention getting underway into Philadelphia. What role will social security play in the debates that will be hearing

this week? There's a big push to try to get younger voters to the polls, but we know that it's many times it's older voters that are the most faithful. Can anybody touch the third reel of politics in a way that we'll get them votes? Are they all going to hold back? Join us now? Matthew Hoosier, he's a reporter for the Kiplinger Letter, and he's been writing about this very issue, suggesting that while Hillary Clinton and Donald Trump could both make some proposals in all likelihood, they won't,

at least not when it comes to cutting Social Security. Matthew, welcome to taking Stock. Hi, thanks for having me so so far. What have we heard from Miss Clinton and Mr Trump on this issue? Well, uh, Mrs Clinton has suggested that she wants to expand social Security benefits kind of following her party's moved to the last In particular, she wants to expand them for caregivers, people who left the workforce for a period of time to take care of a loud when our family member and therefore weren't

able to access the Social Security system. Um So, she wants to make sure they're going to have a secure retirement and to do that. To pay for that, she would ask high income earners to pay um a little bit more into the system in order to make that work. And Donald Trump has also pledged not to touch Social

Security benefits. His goal is to basically make the economy better and therefore have more workers paying into the system, and hopefully that will help ease the funding shortfall that Social Security is currently projected to face here in the next couple of decades. Matthew, to you give us some detail on social Security, because it is not just the benefits. One third of retirees receive almost all their retirement income from the system. Two thirds received more than half from

Social Security. But yet there is also the Social Security Disability Insurance Trust Fund. Tell us about that and whether that is also on the table to be debated because that's expected to run out of money certainly. Um So, that obviously, as you mentioned, is a much more immediate problem. Um And Uh, Ultimately it works in the same way as the retirement fund does in the sense that it's

funded by worker contributions in PAYWORL taxes. Uh. And obviously last at the end of last year, you had Congress work at a deal that basically tacked took money from the retirement fund in order to um keep the disability funds solvents um for up through I believe eighteen And um my, my assumption is our our assumption here at that keeping it is that ultimately Congress will end up having to act on that here the next couple of years, however, on most of the discussion in the campaign season is

going to be focused on the retirement program because that's um the aspect of the Social Security program that voters are really really passionate about and really care about. At this point, Okay, with Donald Trump pledging not to touch Social Security but close the funding gap by pretty more jobs and therefore you people have to pay more payroll taxes and that will that will offset this deficit. How fast would the US economy have to grow? How many more people would have to be in the labor force

working to come close to that? Boy, I'll tell you what I am. I am not unfortunately a trained economist so I did not was not able to do any calculations in that, or was not able to find anybody who had done any sort of concrete calculations on that. So I could not. But broadly, is there any and I mean who who who out there agrees that, yeah, just faster economic growth would help close the gap? Or

is this? I have not known to anybody who's any like very reputable economist who has supports or who thinks that that would ultimately work. Matthew, Sorry to stay in the weeds here, but um you know, you talked about this reallocation between the Disability Insurance Trust and the Old Age and Survivors Insurance Trust Fund. They've been doing that for years. But the Survivor's Insurance Trust Fund, if all of the problems are put onto that, then won't that

just hasten its own shortfall? Um So that would be assuming that, uh, ultimately that nothing is going to be done about about the funding shortfall. However, we do anticipate that at some point before um, you actually get to the point where the Social Security program is unable to UM fund all of its various liabilities, sometime before then, Congress will find a way that sounds like a hope as much. I mean, not that that's bad, but I mean that does sound like more of a hope than

anything that's based on practical knowledge. It is it is well, it is certainly a hope. UM. The reason that UM, I guess we would put it like that is just Congress tends not to act unless it absolutely must UM.

And so we don't anticipate seeing any sort of major action on social security in the next four years, with the exception of something done to help fund the disability funds, which will probably just be similar to the last fix, where you're moving money from the retirement's account into the disability fund. So if I'm somebody relying on my social security UH, in large part from retirement, what what should I be worried about? We're not worried about, UM. If

you're relying on it currently. UM. If you're lying at it currently, you shouldn't have to worry about too much. None of the major changes that are being proposed are going to come into effect, um obviously in the next four years, and we don't we don't think, and probably not within even if they were to come into effect them, they would not affect current social Security recipient. Thanks very much for joining us and giving us that view on

social security. Matthew Hooser is a reporter for The Kipsinger Letter based in Washington, d C. I'm pim Fox. My co host Kathleen Hayes. This is taking stock are thanks. Thank your producer, Reggie basil Our. Thanks also to Sam Lana, our producer. Coming up. The Democratic National Conventional kicks off in Philadelphia, Pennsylvania. And this is Bloomberg coming up Bloomberg

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