Incumbency typically offers a significant advantage to U.S. presidents. Since the founding of the country, only 11 presidents lost their bids for a second term. While former president Donald Trump failed in his attempt to stay in office in 2020, he was the first to do so in nearly three decades.
This pattern likely makes President Joe Biden more confident in his chances for another four years in the White House. Social Security will almost certainly rank among his top priorities. The federal program is currently on a course to become insolvent by 2034. But how would Biden change Social Security if he wins re-election?
Image source: Official White House photo by Adam Schultz.
The president's Social Security message so far
A short video released after Biden's re-election campaign announcement stated that the president plans to "protect Social Security" in a second term. However, Biden hasn't specified exactly how he plans to protect the program yet.
The president's message thus far indicates what he won't do with regard to Social Security. In his State of the Union address delivered earlier this year, Biden proclaimed that Social Security was "off the books" and "not to be touched." He warned that he'd veto any attempts to cut benefits for Social Security recipients.
These statements reflect that Biden would oppose any solution to fix Social Security that includes mean-testing (reducing benefits for wealthier Americans). They also seem to rule out changes that would reduce future cost-of-living adjustments (COLAs).
It's also likely that the president won't embrace the idea of gradually increasing the full retirement age. Although this wouldn't entail cutting benefits for current Social Security recipients, it would mean that future retirees would receive less from the program.
2020 vision
Although Biden hasn't proposed a detailed plan for Social Security as part of his re-election campaign, we don't have to speculate too much about what changes he would like to see. His 2020 presidential campaign laid out a specific vision for the program. Biden's second-term plans probably won't diverge significantly from his plan from three years ago.
The biggest change to Social Security that Biden called for in 2020 was to increase the payroll tax cap to $400,000. Currently, only the first $160,200 of earnings are subject to the payroll tax that helps fund Social Security.
While the president hasn't pushed for this payroll tax cap increase so far in his first term, he did include a similar change to preserve Medicare in his proposed 2023 budget. The primary trust fund for Medicare is on track to run out of money in 2028 if nothing is done.
Biden's 2020 plan also included other changes to Social Security, including revising how COLAs are calculated. However, those proposals would add to the program's costs rather than help preserve it.
It takes 269 to tango
It's important to remember that Biden isn't primarily responsible for preserving Social Security; that burden belongs to the U.S. Congress. No changes can be made to avoid future benefits cuts without the support of at least 269 congressional votes -- 218 in the U.S. House of Representatives and 51 in the Senate.
These political dynamics mean that the presidential race is only one of many races next year that could be pivotal in determining what the future looks like for Social Security. The most likely reforms to the program, therefore, will be those that can attract bipartisan support.
In the meantime, the most important priorities for future retirees should be saving as much as possible in their IRA and 401(k) plans and deciding when to retire to maximize Social Security benefits while meeting their personal goals. Regardless of what changes are ultimately made to Social Security, the program wasn't designed to fully fund retirement.
