The average Arizona retiree will see a $24 increase to their monthly Social Security benefits in 2020, a 1.6% increase on the average Arizona retiree’s monthly benefit of $1,491, according to the Arizona Republic.
About 1.35 million Arizonans receive Social Security benefits, including 993,000 retirees.
The increase, the result of the modest impact of inflation on cost-of-living adjustments (COLA), comes ahead of an election year that could determine the future of the entire Social Security program.
Republicans have long opposed the enormously popular program and even tried to privatize it under President George W. Bush — an idea that critics say is really just an attempt to dismantle Social Security.
The program provides benefits to 69 million Americans and helps lift more than 15 million elderly Americans out of poverty, meaning any cuts to the program could wreak havoc on older Americans.
And yet, Republicans appear eager to do just that should President Donald Trump win a second term in 2020.
Sen. John Thune (R-SD), the second-ranking Senate Republican, told the New York Times that he hopes Trump would be “interested” in reforming Social Security and Medicare. Sen. John Barrasso (R-WY) was even more optimistic. “We’ve brought it up with President Trump, who has talked about it being a second-term project,” Barrasso told the Times. And perhaps most alarmingly for advocates of Social Security, Senate Leader Mitch McConnell (R-KY) has long wanted to cut the program.
Republicans frequently blame Social Security for the country’s rising deficits, despite the fact by law, Social Security cannot add to the federal deficit, because it is required to pay benefits only from its trust funds. Those trust funds, in turn, are paid for via a payroll tax of 12.4% of income, split evenly between employers and employees on income up to $132,900.
In reality, it’s policies like Republicans’ 2017 corporate tax cut has caused the deficit to skyrocket. In the aftermath of the tax bill, the Congressional Budget Office predicted the deficit will climb to $1 trillion in 2020.
But based on their comments thus far in 2019, Republicans seem likely to push for cuts to Social Security should Trump get a second term.
To be sure, the program does have some problems coming down the pike; Social Security has nearly $2.9 trillion in asset reserves, but America’s aging population is claiming more and more benefits while the U.S. fertility rate declines, reducing the number of workers able to pay taxes into the system.
This gap between the amount of money coming into Social Security and the amount being paid out will continue to increase and Social Security now sits less than 16 years away from completely exhausting its reserves, according to the 2019 Social Security Board of Trustees report.
If or when these reserves are depleted, the program would require significant cuts in benefits, which could upend Americans’ retirement plans.
But there are ways to resolve the issue, such as a gradual increase of payroll taxes or increasing the cap on covered income.
Democrats have supported such efforts in 2019, introducing the Social Security 2100 Act, a bill that would raise payroll taxes to 14.8% and implement the payroll tax on earnings over $400,000 — earnings between $132,900 to $400,000 would not be taxed.
The bill would also increase average Social Security benefits by about 2%, increase the COLA adjustment, and cut federal income taxes on Social Security benefits for about 12 million middle-income Americans.
The House has not yet held a vote on the bill, but discussions over it continue.
It remains to be seen if Republicans back away from their inclination to make cuts to Social Security. Such a move would hinge on President Trump not only being re-elected, but also reneging on one of his signature 2016 campaign promises: protecting Social Security.
For now, the 1.35 million Arizonans who currently receive benefits can rest easy. Their benefits are safe and will increase in 2020. But whether that’s the case five or ten years into the future could well hinge on what happens in the next 12 months.