Social Security Advisory Board nominee Andrew Biggs took the hot seat at a recent Senate Finance Committee hearing over his current and past views on program reforms.
Biggs, who was chosen by Senate Minority Leader Mitch McConnell (R-KY) to be nominated to the board, is a senior fellow at the American Enterprise Institute and has formerly served in a range of governmental positions related to Social Security and retirement policy. These include serving as Social Security Administration (SSA) principal deputy commissioner and as part of the George W. Bush administration's 2001 President’s Commission to Strengthen Social Security.
“I’m concerned about your record on Social Security,” Sen. Sherrod Brown (D-Ohio) said during the January 31 nomination hearing. “My concern is the role you played in President Bush’s effort to divert payroll tax contributions from the trust funds to a private savings account – in other words you advocated privatizing Social Security.”
But Biggs responded that he does not think Social Security should be privatized and has not proposed that the retirement age be raised, although, he acknowledged that in a past hearing he said that raising the retirement age was not an unreasonable idea.
“Congress should keep all options on the table if you wish to have a bipartisan agreement. I have not argued for raising the Social Security retirement age. I don’t believe I’ve written anything in favor of private accounts since the Bush experience in 2005,” Biggs said. He said he supports raising minimum benefits for certain retirees that would take the elderly poverty rate from a current rate of about 7%, to zero.
Retirement age issue
The question of raising the retirement age for Social Security to help resolve an expected shortfall in 2034 program funding promises to be a hot-button issue in the 2024 presidential election year. When asked last month during the Republican primary debate whether the age should be raised, presidential hopeful Nikki Haley, former South Carolina governor and U.N. Ambassador, said it should be increased for those in their 20s to reflect life expectancy.
“We have to go and look at what we can do to get out of this. We want to make sure that everybody who was promised, gets it. But we also want to make sure that our kids have something when they get it, too,” she said.
During the hearing, Sen. Bill Cassidy (R-LA) also noted the SSA trust fund’s looming insolvency problem and asked Biggs that, if he had to cut benefits or cut taxes to resolve the problem, which one would he recommend. “The whole point here is we want people with expertise who can actually weigh in,” Cassidy said.
Cut benefits 'at the high end'
Biggs noted that the board does not address policy concerns but, when pressed for a response, he said he has argued for transitioning over time “to a benefit structure that is more focused on maintaining and protecting [benefits] … for the lowest income retirees and reducing the growth which, relative to current law benefits, does mean cutting benefits, particularly at the high end and for a more limited degree.”
Cassidy noted, however, that “Social Security cannot tell the difference between the ICU nurse who has been working at the tax max from the billionaire,” and so a move like Biggs' suggested would leave the nurse wondering why her benefits are being reduced.
Committee Chair Ron Wyden (D-OR) referred to Biggs' op-ed in the Wall Street Journal last month entitled “No, Social Security Isn’t ‘Earned,’” which argues that most people are promised Social Security and Medicare benefits that exceed the taxes that they pay for the programs.
Focusing on Social Security, the senator said the article shows a fundamental misunderstanding of the program.
“Social Security is an earned benefit because you don’t receive it until you’ve worked and paid into it for at least 10 years,” Wyden said and asked Biggs if the headline accurately depicts his view.
Biggs said that people should read the op-ed rather than rely on the headline. “The idea that I’m simply saying Social Security is not an earned benefit … is just simply a mischaracterization,” he said.
Congressional Budget Office data shows that on average people are promised Social Security benefits 37% higher than the taxes they paid over their lifetime plus interest on the taxes, Biggs said.
“In the article I’m very clear that a low-income person … regardless of whether they fully paid for their benefits or not, you shouldn’t take those benefits away,” Biggs said. He posed the question of whether higher income Americans who are promised benefits well in excess of what they have paid into have a “moral claim” to those benefits, which future generations will have to finance.
The seven-member Social Security board is responsible for advising President Joe Biden and Congress on the SSA programs and policy. This includes matters relating to maintaining the program’s solvency, improving service for beneficiaries and helping seniors enjoy a dignified retirement, Wyden said.
SSA’s trust fund reserves – which supplement the program’s income largely from payroll taxes – help SSA pay full benefits, according to the non-partisan, nonprofit Center on Budget and Policy Priorities. But these reserves face a long-term shortfall that, if Congress does not act to shore up the funding, will result in about a 20% cut in benefits to beneficiaries in 2034.
In November, SSA Chief Actuary Steve Gross said in a Social Security benefits podcast that people “should not worry about the trust fund running out of money, as is sometimes said.” The worst-case scenario, he said, is that SSA can only pay beneficiaries about 80% of their benefits.
In addition to Biggs, the committee heard from two other SSA board nominees – Kathryn Lang, director of Federal Income Security for the senior group Justice in Aging; and Sharon Lewis, who formerly served as principal deputy administrator at the Health and Human Services Department’s Administration for Community Living. Corey Tellez, who is nominated to serve as Treasury assistant secretary for legislative affairs, also testified.
To watch the full hearing, visit the Senate Finance Committee website.
Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.
Capital Gains Tax Exclusion for Homeowners: What to Know
Tax Breaks The IRS capital gains home sale exclusion can be a valuable tax-saving tool if you’re eligible.
By Kelley R. Taylor Last updated
Kiplinger's Mutual Fund Guide For 2024
Giant U.S. tech stocks dominate many of the top-performing names in Kiplinger's mutual fund guide, but small and foreign companies are well represented too.
By Nellie S. Huang Published
What Every Woman Needs to Know Before Retiring
A look at how women need to prepare differently than men for retirement due to factors like longevity and earnings.
By Jennifer Waters Published
Starbucks Is Making Its Stores More Accessible. Here's How.
The coffee chain's move comes at a time when the number of older adults with disabilities is expected to rise.
By Jamie Feldman Published
Medicare Advantage: CMS Wants Your Feedback. Here's What To Know
CMS seeks data-related input on the Medicare Advantage program in a push to improve transparency among the myriad of plans offered.
By Joey Solitro Published
Medicare Advantage Enrollee Numbers Are Rising — Here's Why
Enrollment in Medicare Advantage plans has outpaced expectations, but people should use caution when viewing these plans, expert says.
By Joey Solitro Published
Social Security: DeSantis, Haley Split Over Reforms During GOP Debate
Candidates spar over Social Security’s retirement age and COLA increases as the 2024 election year kicks off.
By Esther D’Amico Published
Insulin Now Available for $35 a Month for Many Americans
Insulin price caps from Eli Lilly, Novo Nordisk and Sanofi take effect this month.
By Joey Solitro Published
Another Government Shutdown Threat Looms As Lawmakers Break For Recess
When they return, lawmakers will have just days to either pass or extend the deadlines of key funding bills. If they fail, a partial shutdown begins on March 1.
By Esther D’Amico Last updated
Drugmakers Hike Prices on 775 Drugs So Far This Month — Report
So far this month, drugmaker price hikes have hit hundreds of brand-name drugs that treat conditions including diabetes, asthma and heart disease, a new report shows.
By Esther D’Amico Last updated