▶ 0:25:05Chair Grassley: Thanks, everybody, for coming for this very important subject. Before I read my opening statement, I want to thank senator sanders for his cooperation.
▶ 0:25:17Chair Grassley: I went to him about a month ago and said I would like to have this hearing on this very day, and he quickly said yes, and it was going to be a bipartisan meeting, and I hope that sets the stage for the fact that on this subject of social security, nothing is going to get done if it does not happen in a bipartisan way, so I thank you for your cooperation. Social security is a part of the social fabric of america.
▶ 0:25:50Chair Grassley: Unfortunately, this trust fund for retirement and survivor's benefits will be exhausted in six years. , 2032, seniors see their benefits cut by as much as 22%. To ensure this cut never happens , the entire nation needs to have an honest discussion about social security.
▶ 0:26:17Chair Grassley: This will require a president, members of congress, political candidates, and leaders of senior advocacy group organizations to come clean about the facts with the american people. Aarp and other organizations need to stop running commercials saying don't cut, and instead start running ads saying congress should act.
▶ 0:26:51Chair Grassley: Here are just a few social security facts. Social security is facing a funding shortfall, largely due to demographics, because far fewer workers are paying into the social security relative to benefit recipients than at any time in the program's history. Secondly, the shortfall is large -- very large.
▶ 0:27:21Chair Grassley: The present value of social security's unfunded obligations is a staggering $30 trillion. This fiscal whole -- hole cannot realistically be plugged just by tax hikes on the wealthy, the democrats' favorite solution, or by cutting waste, fraud, and abuse, which is the republicans' favorite solution. Inaction on social security is not an option.
▶ 0:27:53Chair Grassley: The only threat to current retirees' benefits is partisan fear mongering that impedes bipartisan action. And I always say this facetiously, but I wanted to say there is some truth to it as far as I am concerned.
▶ 0:28:14Chair Grassley: We get calls in the office almost daily -- "don't cut social security." I'm not on the phone talking to these constituents, but I would like to say to them, if you knew how scared members of congress of both political parties are on the issue of social security, you would be laughing at us instead of calling in and saying don't cut social security.
▶ 0:28:40Chair Grassley: Now, they have the perfect right to do that, and we have to take those positions into consideration, because people actually have that fear. During my first term in the united states senate, social security was also facing a funding shortfall. Fortunately, several political leaders of the era rose to the occasion.
▶ 0:29:07Chair Grassley: This included two prominent people, one a republican, one a democrat. President reagan and democrat speaker of the house tip o'neill there are no ronald reagan's and tip o'neill's in D.C. today. That is why nothing has happened yet.
▶ 0:29:27Chair Grassley: Maybe they are here but they have not popped up yet, to take a lead -- except to take a lead on this are that bill. But to really get it together, it takes tough people to do it. This began with an agreement in 1981 to bipartisan -- to establish the bipartisan national commission on social security reform, to break a logjam in congress.
▶ 0:29:56Chair Grassley: Both leaders agreed to refrain from political attacks on the commission's work, to provide space for bipartisan solutions. The commission's recommendation served as the basis for reform, adopted with strong bipartisan support. I think in the united states senate there were less than 10 votes against this compromise.
▶ 0:30:26Chair Grassley: In turn, social security has made good on all promised benefits for the past 43 years, and I will bet when reagan and tip o'neill were done, they probably thought they were getting us through the next 20 years. You can see their foresight has gotten us 43 years at this point, and almost 50 years.
▶ 0:30:48Chair Grassley: It is now our turn, this generation of congress's, to put partisan politics aside to save social security. In 1983, republicans and democrats -- as in 1983, republicans and democrats will need to sit down together to consider a wide range of reform
▶ 0:31:18Chair Grassley: Options. It is the only way that we will find a solution that can clear 60 votes to pass the senate. To foster productive bipartisan discussions, it would be helpful to agree on a set of common sense reform principles. And I don't presume that these are all of them, but these are principles as far as I'm concerned. First, no benefit reductions for current retirees or those near retirement.
▶ 0:31:51Chair Grassley: Second, reforms must prevent senior poverty as well or better than under current law. And third, reforms must be balanced. There is no path to 60 votes for a far left proposal focused solely on tax hikes. The sooner we get to work, the better. Today's shortfall is more than twice as large as in 1983.
▶ 0:32:19Chair Grassley: The longer we wait to act, the worse the options become. So let's get to work now to save social security once and for all, or at least for 50 years like reagan and tip o'neill. I thank you again, senator sanders, for this cooperation for this hearing, and I look forward to hearing from you and other members, and first are witnesses, so please go ahead.
▶ 0:32:52Sen. Sanders: Mr. chairman, thank you very much for calling this hearing on I think one of the most significant crises this country has faced. You are right it is a crisis. Let's think about how we can work together to resolve it. What I want to do is come up for a moment, but the issue of social security into a broader context, if I might. The broader context is, Mr.
▶ 0:33:20Sen. Sanders: Chairman, we are living at a moment in history where in the wealthiest nation in the history of the world, we now have more income and wealth inequality than we have ever had. It far surpasses the gilded age of rockefeller and those guys.
▶ 0:33:39Sen. Sanders: We are living in a moment when the people on top of never had it so good, while at the same time, some 60% of our people are living paycheck-to-paycheck, are struggling to put food on the table, to pay for health care, other basics. Everybody knows this is not some discovery I have made. I think that is a generally agreed truth.
▶ 0:34:08Sen. Sanders: And in the midst of all of that, seniors are in particularly difficult trouble, and I think you mentioned that, Mr. chairman. We are looking at a time when, if you can believe it, over 20% of seniors in america are trying to survive on $15,000 a year. I don't think you can do that in iowa. I don't think you can do that in vermont.
▶ 0:34:34Sen. Sanders: Healthy people cannot afford prescription drugs, to heat their homes in the winter. The nursing home situation is a disaster, etc. We have not paid enough attention to the plight of millions and millions of seniors in this country. And in the richest country on earth, we should do better than that.
▶ 0:34:56Sen. Sanders: On top of all of that, nearly half of all the workers between the ages of 55 and 64 have no retirement savings. Zero retirement savings as they approach the end of their workdays. The average social security benefit today is just $1934 a month -- not a whole lot to live on.
▶ 0:35:25Sen. Sanders: You are right in saying that social security trust fund is in danger, and that we have got to move sooner than later. I share that goal with you and look forward to doing that. But our goal as we do that must be to make sure that we strengthen social security but we increase its solvency, hopefully for 75 years, and we do that in a way that is fair.
▶ 0:35:54Sen. Sanders: And I do not believe that it is fair, and some have talked about, to cut social security benefits, raise the retirement age. I honestly don't think that is the direction in which we should be going. But I will tell you what I do think. I think there is more and more support for this, as the chairman may have noticed.
▶ 0:36:16Sen. Sanders: There was an op-ed in "the new york times" a couple of days ago written by a colleague of mine that I work with a lot, elizabeth warren. Also signed by Mr. marino, a good republican. The idea they talked about was the legislation -- it was not a complicated piece of legislation and something I would like to see become law.
▶ 0:36:43Sen. Sanders: That is we are in a situation right now where if catherine here makes $10 million a year and the chairman makes $186,000 a year, they both pay the same amount into the social security trust fund. If muska makes whatever he makes, hundreds of millions a year, he pays the same amount as somebody making 100 a $6,000 a year. I'm sorry, $184,000 a year. That is a bit absurd.
▶ 0:37:13Sen. Sanders: It means if you make $184,500 a year, you pay six point 2% of your income in social security taxes. If you make 10 times more than that, let's say you make $1.8 million, you pay 0.6% of your income in social security. So the wealthy people pay a fraction of what working people pay into the fund. I don't think that that makes sense.
▶ 0:37:43Sen. Sanders: The legislation I have introduced applies the social security payroll tax on all income, including capital gains and dividends, for those who make over $250,000 a year. Under this bill, 91 percent of households would not see their taxes go up by one penny. The tax increase in our legislation only applies to the wealthiest 9% of americans, those who make over a quarter of a million dollars a year.
▶ 0:38:13Sen. Sanders: In addition, under this legislation, we will increase cost-of-living adjustment for seniors by more accurately measuring spending patterns through the consumer price index for the elderly. That is what I believe we should be doing. Mr.
▶ 0:38:33Sen. Sanders: Chairman, I do look forward to working with you, but I think the american people are catching on that the system, the economy today, is not working for them. It is benefiting the very wealthy. And I think most americans know that after you have worked your entire life, you should be able to retire with dignity and security.
▶ 0:38:59Sen. Sanders: So my goal is to increase social security benefits, expand the solvency of social security, as I know you want to do, 75 years, which would be great. But do it in a way that benefits working people, and ask the wealthiest people in this country, who have never had it so good, start paying their fair share of taxes. Thank you, Mr. chairman.
▶ 0:39:30Chair Grassley: Well, I pushed the button, but the light did not come on. Mr. shai akabas is the president -- vice president of policy for the bipartisan policy center, and leads the organization on economic initiatives including fiscal policy, retirement, and financial security, as well as tax policy.
▶ 0:40:00Chair Grassley: He got his start at the policy center in 2010, staffing the debt reduction task force. Ms. elizabeth milito serves as executive director of the small business legal center of the national federation of independent business.
▶ 0:40:25Chair Grassley: She handles legal and regulatory affairs for the nfib and has testified before congress and state legislatures on a broad range of legal and regulatory matters. She is a graduate of the university of maryland law school. And Ms. nancy altman, is a president of social security works and chair of the strengthen social security coalition.
▶ 0:40:52Chair Grassley: She currently serves as a member of the social security advisory board and has 50 years background in the area of social security, medicare, private pensions, and related programs. And we will go from the way I introduced you. Go ahead. Please proceed.
▶ 0:41:13Mr. Akabas: Thank you, chairman grassley and senator sanders for holding this hearing. Having spent the better part of two decades working on federal fiscal and retirement policy, I can say with confidence social security's outlook is more dire than at any point in my professional life. For tens of millions of americans -- retirees, disabled workers, widows, and children who lost a parent -- social security is the foundation of their financial lives.
▶ 0:41:42Mr. Akabas: Protecting it is not an abstraction. It is an obligation. Let me highlight five points. Number one, social security is heading for a fiscal cliff. Social security's primary trust fund will be depleted in 2032. Unless congress acts, every beneficiary, current retirees included, will face an automatic 22% benefit cut. That reflects a program out of balance, only taking in about three quarters of what it pays down.
▶ 0:42:10Mr. Akabas: A 20% benefit cut means $4800 less per year for the average widow or widower. For millions of americans, that is the difference between security and hardship, and the uncertainty alone is costly. Tens of millions of workers cannot plan confidently for a retirement benefit that may not fully be there. Number two, there is a hard truth we need to be honest about.
▶ 0:42:37Mr. Akabas: The significant majority of social security beneficiaries receive far more in lifetime benefits than they paid into the program in payroll taxes. That is not a criticism of beneficiaries. It is mathematically how the program involved. People are living longer than its architects anticipated, collecting benefits for more years than the contribution structure supports. Until we say that plainly, we cannot design solutions. Number three, delay is making the problem worse, and shifting the burden on to younger generations.
▶ 0:43:06Mr. Akabas: A decade ago, the bipartisan policy center's commission showed a balanced reform package of benefit and revenue changes could achieve 75 year solvency and prevent trust fund depletion entirely. That window has closed. The same package today could no longer accomplish both. Every year congress waits, the required changes grow larger and the burden shifts further onto younger workers. Number four, we will likely need a bridge, but it must be paired with real reform.
▶ 0:43:36Mr. Akabas: We have passed the point at which benefit and revenue changes alone can prevent the 2032 depletion. The timeline is simply too short. Temporary borrowing authority or a limited general revenue transfer will likely be required. But it must carry strict guard rails and be paired with meaningful structural reform. Bridging without reforming is not a solution. It is a more expensive version of the current problem, financed at the expense of future taxpayers.
▶ 0:44:06Mr. Akabas: Number five, the solution must be bipartisan and must be balanced. Senate rules require 60 votes. No party is likely to get there alone, and no party will absorb the full political cost of tax increases were benefit adjustments in isolation. A durable solution requires both sides to show the risk, just like the 1983 reforms. Any solution must also protect the most vulnerable.
▶ 0:44:31Mr. Akabas: For low income workers, social security is often their only meaningful retirement income, and surviving spouses face sharp drops in income when a partner dies. I will note that the U.S. senators elected this fall will for the first time be required to confront social security's insolvency during their term in office. That is a new critical reality. Mr. chairman, ranking member, social security's history is one of problems deferred.
▶ 0:44:57Mr. Akabas: The longer congress waits, more disruptive the eventual fix will be. We cannot afford to hide behind pledges of no changes or proposals that only adjust one side of the ledger. Both paths lead to the same place -- a benefit cliff that nobody claims to want but everyone is marching toward. When both parties decide the cost of inaction exceeds the cost of action, a deal gets made. The american people are at that point. Congress needs to catch up. Thank you. I look forward to your questions.
▶ 0:45:25Chair Grassley: Thank you very much.
▶ 0:45:28Ms. Milito: Chairman grassley, ranking member sanders, and members of committee -- of the committee, I appreciate the opportunity to participate in today's hearing on the future of social security. For more than 80 years, nfib has advocated for america's small and independent business owners in washington, D.C. and all 50 state capitals. We are nonprofit, nonpartisan, and member driven.
▶ 0:45:53Ms. Milito: Since our founding in 1943, we have been exclusively dedicated to small and independent businesses, and remain so today. Small businesses have a supersized impact on the U.S. economy, as you well know. Over 34 million small businesses operate across the country. From 1995 to 2020 three, they generated 20.2 million net new jobs, surpassing the 12 point 8 million created by large businesses.
▶ 0:46:20Ms. Milito: Small businesses employ 49% of the american workforce, account for 99.9% of all U.S. businesses, and comprise 45.9 percent of the gdp. It is no exaggeration to say that for the american economy to succeed, small businesses must succeed. Over the past 18 months, congress and the administration have delivered tech certainty and regulatory relief to small businesses. Notably, congress passed hr one, taking the 20% small business deduction permanent.
▶ 0:46:51Ms. Milito: Additionally, the administration exempted U.S. businesses from an information reporting requirement, eliminating a major compliance burden and saving small businesses over 128 billion dollars in regulatory costs. Despite these major victories, small businesses continue to face many economic headwinds. Taxes, inflation, and labor costs remain the top challenges for small business owners. Uncertainty is the enemy of growth and investment, and it is high.
▶ 0:47:18Ms. Milito: As one member recently shared, economic uncertainty is the biggest challenge. Another wrote taxes are too high. Business seems to be getting harder and harder to make a profit. The message from small businesses to congress is simple. Do no economic harm. That message is especially relevant to today's hearing.
▶ 0:47:39Ms. Milito: Proposals such as the social security expansion act are often framed as affecting only millionaires and billionaires, but small businesses are not out of harms way from these deceptively labeled proposals. For instance, a design to lift the current payroll tax cap and extend social security taxes to certain investment income would directly impact many small business owners.
▶ 0:48:01Ms. Milito: Small businesses often report on the owner's individual tax reform, because 85% are passed through businesses such as s corp.'s, so proprietorships, and partnerships. These businesses would be subject to additional social security taxes under the proposal. For succeeding exceeding two under $50,000, which are now often invested in payroll and business expansion, would face a new 4.4 percent surtax even if owners do not withdraw that income personally.
▶ 0:48:31Ms. Milito: For these businesses, proposals like the social security expansion act represent not just a tax increase on the wealthy, but on the revenue small business owners depend on to operate, to grow, and to expand their businesses. When businesses face higher tax rates, it leads to less investment in the most valuable asset -- their workforce. Small businesses continue to face economic challenges.
▶ 0:48:55Ms. Milito: Congress can help mitigate these challenges by extending beneficial small business tax provisions and rejecting a 33 point $8 trillion tax hike. Tax certainty will help businesses plan, and increase small business confidence. It is my hope that congress will pursue reforms that promote economic growth, encourage workforce participation, and protect small business owners' ability to invest in their business and create new jobs.
▶ 0:49:24Ms. Milito: A stronger economy ultimately produces more payroll tax revenue and will improve social security's long-term outlook without imposing new burdens on main street employers. Thank you for the opportunity to testify today on behalf of small businesses.
▶ 0:49:40Ms. Altman: Social security was enacted to provide basic economic security when wages were lost in the event of disability, death, or old age. Therefore, the first question we should ask is what level of benefits should social security provide. As I explain at length in my written statement, today's benefits are low by virtually any measure.
▶ 0:50:08Ms. Altman: Cutting those already inadequate benefits will deepen the nation's looming retirement income crisis. And cutting benefits will hurt the economy. On page four of my written statement, I list the dollar amount of social security benefits that flow into each of the subcommittee members' states. At the same token, expanding social security's modest benefits will increase economic security and strengthen the economy.
▶ 0:50:40Ms. Altman: That leaves the question how the expanded benefits are financed and the shortfall eliminated. It is imperative to recognize that after congress enacted the social security amendments of 1983, the subsequent trustees report projected that social security was funded for the full 75 year valuation period and beyond, which ran through 2058.
▶ 0:51:08Ms. Altman: But the actuaries could not anticipate the huge income and wealth inequality that followed those amendments. Recent decades have seen a dramatic increase in the share of income going to those at the top. That inequality has cost social security more than one point 5 trillion dollars since 1983. That is $1.5 trillion that should have gone to social security, but instead stayed in the pockets of the wealthiest among us.
▶ 0:51:38Ms. Altman: This year's trustees report has predicted that congress must act by 2032. That is one year sooner than last year's report projected. The earlier date is the result of trump administration policies -- specifically its first reconciliation bill giving tax breaks to the wealthiest, and its hostility to immigrants, who every year contribute tens of billions more dollars to social security then they draw out.
▶ 0:52:10Ms. Altman: Moreover, the tariffs and its war against iran will undoubtedly increase unemployment and inflation, harming social security even more. The 2032 date is best understood as an action-forcing event. The question is not whether congress will act. It is unimaginable that you don't.
▶ 0:52:32Ms. Altman: But rather what you do, and whether you act transparently through regular order, or through an undemocratic, closed-door, fast-track process. Two pieces of good news. First, there is no question we can afford and expanded social security, whose total costs at the end of the century were less than 7% of gdp. The issue is one of values, not affordability.
▶ 0:53:00Ms. Altman: The second piece of good news is that as polarized as the american people are, we are united about social security. Poll after poll reports that from mango republicans to progressive democrats, the american people overwhelmingly reject benefit cuts, even if paired with some revenue increases. To be clear, raising the retirement age and means testing benefits are benefit cuts.
▶ 0:53:30Ms. Altman: Your constituents strongly and overwhelmingly prefer more revenue, ideally paid by the wealthiest. They also struggle with that benefit increases. The social security expansion act is exactly what every poll shows the american people want. It should be brought to a vote immediately. It should not happen with the establishment of a commission whose recommendations will privilege the fast track.
▶ 0:54:01Ms. Altman: That would be unprecedented and a deep disservice to the american people. It's only purpose would be to insulate and protect members of congress from facing political accountability. Instead, all social security legislation should go through regular order, as it always has. Pertinently, if congress does with the american people overwhelmingly want, as the social security expansion act does, action can occur in the open and without delay. Thank you.
▶ 0:54:33Chair Grassley: The order will be grassley, sanders, johnson, cassidy, cortez masto, tillis, and young. Listening to my colleagues about taxes on higher income people, former president obama's top economic advisor recognizes this is not the case. As Mr.
▶ 0:55:02Chair Grassley: Furman put it in a recent opinion piece for "the new york times," applying the social security tax to all incomes would push the effective tax rate above 50%. And this would become a further quote, not leave a lot of room for further tax increases on the rich to close the budget deficit and fund other priorities.
▶ 0:55:33Chair Grassley: Wouldn't my colleagues prefer -- with this ultimately lead to large tax hikes on the middle class and severe cuts to other programs down the road?
▶ 0:55:47Mr. Akabas: I want to start by giving credit to members on both sides who have put forward ideas. That is exactly what we need, given the situation we are in. Increasing revenue should certainly be on the table as part of a comprehensive solution. The matter of fact is that jason furman is correct. We have limited availability to raise revenue in our economy.
▶ 0:56:10Mr. Akabas: We need a lot of revenue for a lot of different purposes right now, not to mention various areas where we are under investing, closing a federal deficit that is large and growing, and allocating a huge amount of money toward the social security system just from high income taxpayers, including to find more benefits for high income earners, is not I think the best use of those dollars. That is why we have consistently said that we think a balance that seeks additional revenue for the program, and benefit adjustments, are necessary.
▶ 0:56:41Mr. Akabas: The benefit structure has not been updated in more than 40 years. I think a solution that only looks at the revenue side but does not focus on some of the changes in demographics and labor force dynamics we have had would be a huge missed opportunity.
▶ 0:56:54Chair Grassley: Many of my colleagues appear to be under the impression that eliminating the tax cap would only fall on the back of the so-called wealthy. Can you elaborate on how such proposals would impose punitive tax hikes on small business? I know you referred to this in your opening statement. Secondly, how would such proposals affect the ability of small business to compete with large corporations?
▶ 0:57:31Chair Grassley: >> -- Ms. milito: thank you for that question. This act would impose three new massive taxes, and a lot of those would fall on small businesses. Saying that most households won't see a tax increase does not change the fact that the taxes would be imposed on many pass through small businesses. The concern is not about, in my opinion, the number of households that are affected.
▶ 0:57:59Chair Grassley: It is weather taxing those businesses that invest and create jobs is the best way to strengthen social security. I think this mantra let's raise taxes on small businesses so we can pay more is not a winning slogan on main street. The outlook on main street right now is very different than the outlook on wall street. There is not an infusion of capital on main street right now.
▶ 0:58:20Chair Grassley: Small business owners use that income, which is referred to in the press as investment income, as savings and a way to expand their business, to hire new employees. They put it away for a rainy day. It would very much impact their ability to compete.
▶ 0:58:36Chair Grassley: Some of my colleagues tend to limit the reach of a small business tax hike by eliminating the tax cap only for taxpayers with earnings over 200 $50,000. However, this threshold was not indexed. Want this result in evermore small businesses getting hit by the tax hike?
▶ 0:59:01Ms. Altman: Absolutely. If the threshold is not indexed for inflation, its real value is going to decline over time. What starts as a tax on a relatively small number of employees and small business owners could become a tax on many, many more taxpayers, sabers, and small businesses in the future.
▶ 0:59:22Chair Grassley: This will have to be my last question. Wages subject to social security tax have been capped since the program's enactment in 1925, yet some of my colleagues argue it is fundamentally unfair.
▶ 0:59:40Chair Grassley: For you, what is the purpose of the tax wage cap and how would its elimination change this structure is an earned benefit based on contributions.
▶ 0:59:56Mr. Akabas: The cap connects what you pay into what you receive out of the program. Social security's political durability is in part resting on the principle that it is an earned benefit and not a well for program. The more you contribute throughout your career, the more you receive in retirement. I think lifting the cap without changing the benefit formula would change that linkage. That raises a fundamental question about what kind of program we want social security to be.
▶ 1:00:23Mr. Akabas: Given what the program is, I think all options need to be on the table, but we should carefully consider any changes that truly break that linkage, because it changes the fundamental nature of the program. We have supported increasing the tax maximum as part of a broader package, but that would still maintain the link between earnings and benefits.
▶ 1:00:47Sen. Sanders: Before I asked my questions, let me state for the record that the legislation that we are talking about, the bill that I introduced, the social security expansion act, would not raise taxes except on those making more than $250,000, which would exclude the vast majority of small business owners from paying a penny of additional taxes.
▶ 1:01:09Sen. Sanders: In reality, the vast majority would be paid for by wealthy business owners and investors who, in the last many years, have been able to avoid billions in taxes. Let me begin by asking all of the panelists a brief question. Do you agree with me and virtually every economist that we are seeing more income and wealth inequality in america today than at any time in the history of the country? Is that true?
▶ 1:01:38Mr. Akabas: Yes, sir, and --
▶ 1:01:42Ms. Milito: My members tell a different story based on our most recent --
▶ 1:01:50Sen. Sanders: You do not believe you are seeing more wealth and income inequality?
▶ 1:01:54Ms. Milito: They are in a very uncomfortable period.
▶ 1:01:58Sen. Sanders: That does not deny that we have more income and wealth inequality.
▶ 1:02:01Ms. Altman: Unquestionably, the data shows that.
▶ 1:02:06Sen. Sanders: My next question. The ceo of warner bros., just as an example -- his name is david zaslow of. He made 160 $5 million in compensation. The ceo of blackstone made 126 million dollars in compensation. Some of these guys are making huge amounts in compensation.
▶ 1:02:37Sen. Sanders: Exception -- I will go through the panel. Do you think it is fair that somebody who makes 120 $6 million in compensation pays the same amount into the social security trust fund as somebody who makes 104,000 dollars?
▶ 1:02:53Mr. Akabas: I think it is important to consider that social security is structured as an earned benefit program.
▶ 1:03:02Sen. Sanders: I know we can go on for hours. I will just ask you. Is it fair?
▶ 1:03:06Mr. Akabas: I agree we need to collect more revenue from higher income taxpayers as part of the solution.
▶ 1:03:15Sen. Sanders: Do you think it is fair?
▶ 1:03:16Ms. Milito: Social security was set up as a contributory act. As it is now, that is the system we are working under. It was president clinton that also cautioned against raising taxes.
▶ 1:03:29Sen. Sanders: It is fine. That is not my view. I simply asked you whether it was fair. Does the ordinary person think it is fair that someone making $100 million think it is fair? Do you think it is fair?
▶ 1:03:42Ms. Milito: The way social security is established now --
▶ 1:03:48Sen. Sanders: Ms. altman?
▶ 1:03:49In Fact -- Ms. Altman: In fact, it is even worse. Jeff bezos only pays himself $80,000, so he pays less than someone making $185,000.
▶ 1:04:08Sen. Sanders: Some of my republican colleagues, in one form or another, have talked about raising the retirement age, privatizing social security, cutting close, and reducing social security benefits. What impact would that have on millions of seniors?
▶ 1:04:26Ms. Altman: As you said in your opening statement, seniors with low income and disabilities are already struggling to get by. They are deciding between food and medicine. All of those changes you named would make that struggle much harder. And it would hurt the economy. For every dollar of social security benefits to be paid, it generates two dollars of economic activity. The reverse is true if you cut those benefits.
▶ 1:04:58Sen. Sanders: I want you to say a word about a fact that I don't think is widely known, but it is an american strategy. Due to a lack of funding for the social security administration, some 30,000 americans with disabilities die every year, waiting for social security benefits they have earned. What should congress do about this? Is the trump administration considering making this problem even worse?
▶ 1:05:24Ms. Altman: Unfortunately, the trump administration has already made it worse. It has forced out the most experienced workers and really decimated the agency. I think what congress should do is immediately enact an act which provides the money that pays for social security and the administration of it -- it does
▶ 1:05:56Ms. Altman: Not add a penny to the deficit. They all come out of dedicated revenue.
▶ 1:06:02Sen. Sanders: Mr. chairman, there is always a reason given why we should not ask the wealthiest people in this country, who have enormous political power through their super pac, etc.. Always a reason why they should not be asked to pay their fair share of taxes. But today, as I mentioned earlier, we are living in a rather strange moment in american history.
▶ 1:06:28Sen. Sanders: Never before in american history have so few held so much wealth and so much power. Meanwhile, while the people on top have never, ever had it so good, we are seeing senior citizens in vermont and throughout this country literally struggling to pay for their prescription drugs, to put food on the table, heat their homes. In the richest country on earth, we can do better than that.
▶ 1:06:54Sen. Sanders: I think basically the bottom line here is this congress is going to have to summon up the courage to stand up to some enormously powerful people and their super pac, and expand social security benefits, extend the solvency of social security, and lift the cap that currently exists.
▶ 1:07:20Sen. Cassidy: Can I ask a question? I don't know. There is a doughnut hole. If you indexed to inflation --
▶ 1:07:31Sen. Sanders: The doughnut hole isn't right now near 250 or 180 four. Is it indexed to inflation? No, it is not.
▶ 1:07:40Sen. Johnson: We will never fix this if we are not willing to take a look at the reality of what social security is. It was a forced savings program. What you paid in was supposed to be invested. With compound interest, you would be able to collect based on what you paid in. Correct?
▶ 1:08:04Mr. Akabas: Yes.
▶ 1:08:08Sen. Johnson: Americans thought that money was being invested, but it was spent. How much value does a U.S. government bond have, to a U.S. government agency? The answer is zero, right? When the trustees take that bond to pay out benefits because benefits exceed revenue right now, they have to issue another bond. So the trust fund is a fiction.
▶ 1:08:35Sen. Johnson: Already, we are either borrowing or taking out of the general fund to make up the difference between benefits and receipts, correct?
▶ 1:08:41Mr. Akabas: On an annual basis, yes.
▶ 1:08:45Sen. Johnson: The cap violates the basis, the basic foundation, of social security. You pay in and you get out what you pay in. So if you want to turn it into a welfare system, that is a different conversation. Already, it is quite the welfare system. I will submit for the record, table one. The worth ratios for workers with various levels.
▶ 1:09:13Sen. Johnson: I will talk about the middle three. Lower income, medium income, and high income. The people who benefit best are one earner couples. They get the most out of social security. If you are low income -- this is very detailed. The people who make up -- to make out the best is somebody born in 1973, a single income couple.
▶ 1:09:39Sen. Johnson: They get 3000 three cents out for every book they put in. If you are a single man, a high wage earner, born in 1943, you get $.63 out. So it is all over the map. It is very imprecise in terms of what you put in versus what you get out.
▶ 1:10:05Sen. Johnson: It would do great harm to our economy because the small business that gets taxed at the individual level -- Mr. bezos is a c corp., and I would like to talk about taxing all businesses at the ownership level. Then, you would not have that problem. But you have got to recognize how grossly mismanaged social security was. This is a spreadsheet years ago.
▶ 1:10:31Sen. Johnson: If we had taken the surpluses and actually invested them into a stock index fund -- back then, we would have had something like $8 trillion. In the stock market, it is $15 trillion of hard assets. We would be talking about increasing benefits. But we did not do that.
▶ 1:10:53Sen. Johnson: So now the solution for fixing social security is to just tax the wealthy, who are, based on the deal that social security was supposed to be -- a dollar put in, you were going to get back, plus compound interest. They are not getting it. They are getting as low as $.63. The points I made there?
▶ 1:11:13Mr. Akabas: I certainly agree we have reached a point where the significant majority of beneficiaries are receiving far more than they contribute in end of the program during their lifetime. That is the case. That is in part why we are at a point where the program is mismanaged between the revenues paid in and the benefits taken out. We need to find ways on both sides of the ledger to make those lines go closer together.
▶ 1:11:41Sen. Johnson: My point is let's honestly look at how social security was set up, how grossly mismanaged it was, how economically destructive. Increasing taxes on a small business person -- you are making 200 50 grand as a small business, you are putting that additional 200 $50,000 into equipment to grow the business, to create jobs.
▶ 1:12:10Sen. Johnson: Unfortunately, a lot of our democrat colleagues do not understand how the private sector works and what wealthy people do with their money. They invest it. It starts with recognizing reality. How grossly mismanaged social security was. It is not going to be a calamity. It should not be. Already, we are making up benefits because benefits exceed revenue. Just because the trust fund runs out does not mean we won't be able to or should not trust up benefits to meet the promise.
▶ 1:12:42Sen. Johnson: It is just that the trust fund runs out and all of a sudden, by law, we have to reduce benefits, but we won't. What we will do is increase the deficit. We need to return to pre-pandemic spending so we have the wherewithal to increase benefits. That is what we have to do. Reduce the deficit by reducing spending.
▶ 1:13:04Sen. Cassidy: The federation of government employees asks that we put their statement in the record.
▶ 1:13:08Chair Grassley: Without objection.
▶ 1:13:12Sen. Cassidy: -- Sen. wyden: it is good to have our guests here. I want to start with the basic proposition of fairness in social security. It is well established that billionaires and trillionaire's get to decide when and if they pay federal taxes. But for somebody who works for a wage -- I am talking about a nurse. I am talking about an electrician.
▶ 1:13:41Sen. Cassidy: They pay automatically every year. I hope my colleagues will say -- a number of us are on the finance committee -- that we ought to have the same rules for everybody. Now, wealthy people who are interested in doing it can call it their lawyer and their accountant, and they can say make sure I don't take a wage this year. I will be able to live off my loans, these incredible loans they get from their favorable treatment from banks.
▶ 1:14:10Sen. Cassidy: Is it fair that billionaires and trillionaire's can avoid paying tax on their income when the working person gets their tax taken out of every paycheck?
▶ 1:14:21Ms. Altman: No, it is not fair. The concept of the wealthy who arguably benefit the most from the government, from courts, from military, because they have the most property, should pay more is a basic american value. You are keeping billionaires -- it is the right way to go.
▶ 1:14:46Sen. Wyden: 24 united states senators are saying, yes, we should have a system that is fair for everyone. It seems americans can do better than creating billionaires while many americans worry about getting social security slashed. Here is the question want to ask based on this op they came from my two colleagues, senators moreno and warren.
▶ 1:15:16Sen. Wyden: If you increase the social security tax cap, and then you take my billionaires income tax -- question for you, Ms. altman -- would it be possible to start restoring some fairness in the tax code while preventing benefit cuts or forcing seniors to put off retirement?
▶ 1:15:33Ms. Altman: Absolutely. There will be important byproducts if you bring in more revenue, increase social security benefits. One of the byproducts will be meaningful tax reform because you have a counterweight of the american people who would either suffer benefit cuts -- it is not just good government -- or billionaires start paying their fair share.
▶ 1:15:57Sen. Wyden: Let me ask our colleague at the other end of the table. Do you disagree with the responses Ms. altman gave to me?
▶ 1:16:05Mr. Akabas: Thank you for the question. My perspective is we need high-ranking americans to contribute.
▶ 1:16:13Sen. Wyden: On the question of equal treatment, the ultimate proposition, and that is what was done at the start of social security, is fairness. The american people -- it is in our dna -- whatn't it be -- wouldn't it be fair to have at the same as everyone?
▶ 1:16:33Mr. Akabas: What we pay out the same benefits?
▶ 1:16:36Sen. Wyden: I'm not asking that today. On the basic proposition of fairness, when the nurse and the electrician pays taxes with every single paycheck, and people who are at the very top can call up their accountant and say make sure I do not take any income this year, I think something is out of whack. Whether you are blue or red, however you come to this issue, that that is something we settle on. No?
▶ 1:17:06Mr. Akabas: I agree that we need to make sure high income taxpayers are contributing on any income they have. It is a complex question about the revenue coming in how fairness is considered.
▶ 1:17:19Sen. Wyden: If we have a system that is fair for everybody, I think we can avoid cutting social security and that is what my colleagues are talking about on our side of the aisle. One last question if I can get it in -- perhaps Ms.
▶ 1:17:33Sen. Wyden: Milito, we will get you into this debate -- we have seen a disturbing trend of social security being haphazard with americans' sensitive information and even weaponizing it which in reality would take away people's earned benefits.
▶ 1:17:54Sen. Wyden: We heard from a brave social security official who details how the trump administration sought to falsely declare 3 million people, many of whom are deceased, U.S. citizens who are deceased, what are your thoughts on further protection of privacy statutes to protect your members and others?
▶ 1:18:14Ms. Milito: We want to make sure the social security system is secure and private information is protected. My members ask that of all federal agencies. The federal government has a lot of their personal information.
▶ 1:18:29Sen. Wyden: I will quit while I'm ahead on that issue.
▶ 1:18:32Chair Grassley: Thank you. Let's see, the next person is senator cassidy.
▶ 1:18:40Sen. Cassidy: I will defer to senator tillis.
▶ 1:18:45Sen. Tillis: Thank you for letting me sit on this committee. I'm not an official member. When I was 12 years old in 1973, I had to apply for a work permit to work for a convenience store. In 1973, I posted my first contribution to social security as a 12 euros -- $33 -- as a 12-year-old -- $33. I have been blessed -- I do not know if I call myself rich.
▶ 1:19:16Sen. Tillis: We pick bezos and some others, what is the threshold for rich that we should be applying all of this rich person stuff to? What is rich in your mind?
▶ 1:19:33Ms. Altman: The top 1%.
▶ 1:19:36Sen. Tillis: Gives me an income level?
▶ 1:19:39Sen. Tillis: For tax purposes.
▶ 1:19:43Ms. Altman: $250,000.
▶ 1:19:48Sen. Tillis: The small business is, the rich people.
▶ 1:19:49Ms. Altman: Be able to exempt small business owners.
▶ 1:19:53Sen. Tillis: I do not want to be antagonistic toward you wall. Mr. akabas, in your opening statement you talked about the reality of people running for reelection. Quite honestly, when I was weighing whether or not to run for reelection, the reality that I would be running hard to then inherit an insolvency issue with social security was a real consideration for me.
▶ 1:20:21Sen. Tillis: I have no doubt that in the next six years congress will have to face up. My concern is I do not see any change in rhetoric whatsoever. If you go back to 2010, the simpson bowles commission, we had an opportunity to fix it then. The debt was at $12 trillion. The simpson bowles subtitle report was a moment of truth. Now the debt is at $36 trillion.
▶ 1:20:49Sen. Tillis: I heard someone say we will not cut benefits, we would just stroke a check. What happens if we continue our debt trajectory? Do you think we have a check we can stroke without causing other debt problems? How do we avoid the mandatory cuts? What is our bank account and our check writing ability likely to look like in 2032?
▶ 1:21:13Mr. Akabas: That is a huge concern. The growing debt burden we have, it is already equal to 100% of gdp. It is slowing economic growth.
▶ 1:21:24Sen. Tillis: At the same time we are dealing with the insolvency issue with social security, all those things may come to roost at the same time?
▶ 1:21:33Mr. Akabas: Yes.
▶ 1:21:35Sen. Tillis: I did a town hall years ago in asheville when I was first running for senate. A lady came up to me and said I cannot vote for you because you will end social security and medicare. I said I checked with my mama and she said she would be really mad at me if I did that. Yet people are messaging that republicans are here to kill social security.
▶ 1:22:05Sen. Tillis: Does anybody really believe that would be fiscally or politically wise? If we continue that rhetoric, what will happen it is we will talk past each other and instead of considering extraordinarily well thought out proposals from people like senator cassidy, that have democrats engaged, we are not showing -- what is wrong with me telling a 25 year old you may have to wait a year or
▶ 1:22:35Sen. Tillis: To get your social security benefits? What is wrong with me telling someone who is 40 years away from getting -- qualifying for social security that you may have to wait another year? The bad news is you will have to wait another year. The good news is if we implement reforms --
▶ 1:22:53Ms. Altman: The 25-year-old and 40-year-old will need social security more than today's --
▶ 1:23:00Sen. Tillis: They have 40 years to prepare. If you see the changes, why is a year longer --
▶ 1:23:09Ms. Altman: What social security is doing is insurance. It is not savings.
▶ 1:23:16Sen. Tillis: You cannot touch age limits? You cannot do any indexing? It must a firm or the organization you represent would come across any compromise?
▶ 1:23:27Ms. Altman: We are talking about revenue increases.
▶ 1:23:30Sen. Tillis: You would not post anything that has to do with indexing?
▶ 1:23:34Ms. Altman: Absolutely.
▶ 1:23:35Sen. Tillis: Thank you, Mr. chair.
▶ 1:23:43Sen. Cortez Masto: Thank you for this conversation. We are going to have to do something. It has to be bipartisan. I appreciate the conversation. Let me ask a couple questions that have not been asked. I read through the trustees report. There are policy decisions that have been made that have harmed the social security program.
▶ 1:24:12Sen. Cortez Masto: We can still work forward and make sure between now and trying to address this problem, passing policy decisions are making policy decisions that will continue to harm. Let me talk about a couple things that I know in nevada that are challenging. I will ask you to respond.
▶ 1:24:29Sen. Cortez Masto: Many nevadans I have talked to or dealing with ssa -- have significantly worsened because of the trump administration's policy changes and staff cuts.
▶ 1:24:44Sen. Cortez Masto: In clark county, nevada, where las vegas is, there is a backlog of more than 500 foster youths who unable to get social security cards due to burden some documentation requirements recently imposed by the ssa and recent staffing shortages are making it more difficult to find a solution for these children. In your view, Ms.
▶ 1:25:07Sen. Cortez Masto: Altman, what will be the long-term consequences of such steep staffing cuts for the future of the social security administration's efficiency and customer services? Why is it important to have appropriate staffing? Can you talk about that impact?
▶ 1:25:27Ms. Altman: Absolutely. Certainly anecdotally -- not even anecdotally -- it is taking months to get an appointment at the social security office, long waits on the phone, and so forth. The staffing is that a 59 year low at a time when 12,000 americans are turning 65 every single day.
▶ 1:25:57Ms. Altman: I think absolutely -- if people cannot access, have their questions answered, access their benefits, that is like cutting social security. That is a serious problem.
▶ 1:26:11Sen. Cortez Masto: Let me ask you, Mr. akabas -- the trustees originally came out with a report that we have been talking about. Is it true that in that report, the biggest drivers to the increase in the deficit we are talking about right now, in order of magnitude are, 1, lower fertility rate projections, 2, lower net immigration projections because of
▶ 1:26:42Sen. Cortez Masto: Immigration policy,3 , the republican reconciliation bill, is that correct?
▶ 1:26:48Mr. Akabas: Yes, those are three of the changes in the projections that have occurred since the last report.
▶ 1:26:54Sen. Cortez Masto: Can you talk about why the immigration issue is having an impact?
▶ 1:27:03Mr. Akabas: Sure. The trustees have changed their projections around the number of undocumented immigrants in the united states. All of those undocumented immigrants cannot receive benefits from social security but many pay into the program. Reducing the number assumed to be in the united states in coming years will mean less revenue into the program and that were since the financial state of social security.
▶ 1:27:30Sen. Cortez Masto: If we were to pass wholesale immigration reform, what that actually add revenue to the social security trust fund?
▶ 1:27:38Mr. Akabas: Yes, immigration reform would bring more workers into the country and contribute more to the revenue base.
▶ 1:27:46Sen. Cortez Masto: Thank you. One final question. Let me talk about data breaches. Ms. altman, I will go back to you. We know because of the whistleblower report alleging a warmer doge employee -- alleging a former doge employee -- personal information copied at least one of those databases onto a personal thumb drive.
▶ 1:28:14Sen. Cortez Masto: According to this whistleblower allegation, the doge employee planned to upload the data into the systems of his soon-to-be employer, a private government contractor, for its own use. Ms. altman, could you please share with the committee while this data is such a prime target for bad actors?
▶ 1:28:33Ms. Altman: This is people's most personal data. It is also enormously useful for a scammer. If you have applied for disability benefits, it has your medical benefits. Your social security number, bank routing number, spouse's name.
▶ 1:28:55Ms. Altman: It has so much information and it has been entrusted to the government with the understanding it would be used for the specific mission of making sure people get their social security benefits. This really calls for oversight and for some legislation that has been proposed. The protecting seniors' data act. It is very, very serious.
▶ 1:29:21Sen. Cortez Masto: Finally, I know my time is up but I will put a plug in here. I was pleased to join senator cassidy on the ssi savings penalty act. It is good policy, good legislation.
▶ 1:29:36Chair Grassley: The senator from louisiana.
▶ 1:29:43Sen. Cassidy: Thank you for your leadership. You will bookend this. There is a bipartisan group of senators working to fix social. Why is that important? If we don't, whereas now it is a 22% cut in benefits if we do not fix it were a much greater rise in taxes, if we wait on to the last minute will be at 28% cut in benefits. Or that much more in taxes.
▶ 1:30:13Sen. Cassidy: The reality is the sooner we act, the better. It is incumbent upon us. No time like the present. I will just briefly mention something that senator kaine and I have -- we call it the big idea -- set up an investment fund separate from the social security trust fund. A pension investment fund used by humans and large corporations that would meet future pension obligations.
▶ 1:30:41Sen. Cassidy: $1.5 trillion over five years and invested in the broader economy. If you do the numbers, clearly the economy could handle this. All growth comes back into the fund. Pay schedule of benefits so you offset the borrowing. By rule 72, at some point the money blossoms out. President trump and senator sanders spoke about a portion of these big companies being used for the benefit of the american people.
▶ 1:31:11Sen. Cassidy: That concept that we use, the growth in the economy and these assets to benefit the american people. This would be a way among other things, increased benefit for some. Give credit to people taking time off to raise a child. You would still need to do some more things. There are political things we have to do. It is bipartisan right now so I will just comment on that.
▶ 1:31:41Sen. Cassidy: I will ask you, Ms. altman to comment on this. We have the social security disability or the ssi penalty elimination act. Right now if you are on ssi and you save a little bit of money, you lose your benefit. It is the wrong incentivize. You are incentivized to waste money.
▶ 1:32:08Sen. Cassidy: We would raise that to $10,000, about where it would be indexed to inflation. If you will encourage wives fiscal management by somebody on ssi. Ms. altman I will ask you to comment on the importance of this. And then you, sir because you are nodding your head, yes.
▶ 1:32:28Ms. Altman: Anyone who is pro-savings and profamily should support the ssi savings penalty elimination act. It has not been increased for almost 40 years. Not only does the current law discourage savings and has a marriage penalty, it is a huge source of overpayments and improper payments, creating huge administrative costs.
▶ 1:32:58Ms. Altman: If your bill were enacted, my understanding is that would reduce overpayments by 70%.
▶ 1:33:04Sen. Cassidy: Really? You are suggesting it might be seen as a savings?
▶ 1:33:09Ms. Altman: I cannot speak for the cbo.
▶ 1:33:13Mr. Akabas: Thank you for your leadership on this. Action has endorsed the legislation. At a time and we are trying to encourage people to save more in the private sector system, penalizing them at the same time by taking away their ssi benefits for saving for retirement seems nonsensical.
▶ 1:33:34Sen. Cassidy: Ms. milito, there are some heavy duty being tossed around. I say that because -- small business people thinking, can I hire another person? The cost of the taxes and the cost of the benefits to the small business owner makes it difficult for her to do so. A woman in louisiana came to a roundtable I had.
▶ 1:34:05Sen. Cassidy: Can she hire another people? We were talking about the high cost of health care. I do not know what she makes 90 do not want to be subject. Any comments if we try to do this by raising taxes on the investment tax and income tax, what that would do for the capital required to expand the business or approve salaries?
▶ 1:34:31Ms. Milito: Thank you for the question. One thing I was thinking, I think she would probably really challenge the notion that she does not pay her fair share of taxes. She would find that insulting if someone said that to her. I think that would hit home for a lot of business owners. I also think that business owner in my members, too, which characterize themselves as working persons.
▶ 1:34:59Ms. Milito: They pay payroll taxes on their wages, too. Getting back to the proposal, yes, it would make it difficult to expand a business, offer benefits because it is another layer in the taxes. Are survey from may had taxes as the number one problem small business owners are dealing with. Above inflation and labor costs. It is layer after layer with taxes, too. This additional payroll tax.
▶ 1:35:30Ms. Milito: Maybe a business owner has a good year and makes $300,000, 12.4%, you could be paying both sides. You are paying the full 12.4%. By the way, if they have a good year and they have income, that will be taxed with the new surcharge tax. In addition to federal state income, property taxes, it goes on and on. Very challenging for small business owners. You cannot tax your way of a fiscal crisis.
▶ 1:35:58Chair Grassley: Senator whitehouse.
▶ 1:36:01Sen. Whitehouse: Thanks, chairman. Ms. altman, I have a bill called the medicare and social security fair share act that would do a number of things. Lift the cap on contributions for salary above $400,000.
▶ 1:36:23Sen. Whitehouse: And also bring in self-employment and investment income, including wages that are often disguised by high earners as distributed profits, dodging the medicare and social security systems.
▶ 1:36:43Sen. Whitehouse: The medicare and social security actuaries have taken a look at the bill and said they make those programs sound insolvent as far as the actuary ey can see, which is 75 years. What is your comment on those ideas? How complicated would that be to actually implement? Does it meet your notion of the fairness test?
▶ 1:37:09Ms. Altman: Absolutely. Our organization, and many of the organizations that are social security coalition has endorsed that legislation. It really shows the question before this committee and congress is one of values, not affordability. Nobody under $400,000 would pay a penny more. Yet social security would be extended for 75 years.
▶ 1:37:37Ms. Altman: And I would argue it does not burden those over $400,000. I think it is well-crafted.
▶ 1:37:44Sen. Whitehouse: I agree with you. It is a question of will. Not a question of solving a technical problem. You do not have to be a rocket scientist. You do not have to be sophisticated with accounting and tax. You just have to want to fix medicare and social security and all the pieces fall into place.
▶ 1:38:03Ms. Altman: This is a heavily polled area and every poll shows from the most conservative republicans to the most progressive democrats, they want this solved on the revenue side with not a single penny of benefit cuts. The proposal is exactly what 80% of the american people said they want.
▶ 1:38:26Sen. Whitehouse: There is a concept in economics that is often referred to as the marginal utility of money. The marginal value of money.
▶ 1:38:42Sen. Whitehouse: It hypothesizes that if you are struggling to make a living as a nurse, or a carpenter, let's say it is your last $1000. Your last $1000 is a big deal to you. If that last $1000 disappears, you notice it at the end of the month.
▶ 1:39:10Sen. Whitehouse: It affects your choices, it affects your lifestyle. If you are a hedge fund character, and you make $200 million in a year, the last $1000 has essentially zero value to you. You do not even know whether it is there or not. Just your portfolio wobbling around is enough to erase and replace that on a daily basis.
▶ 1:39:42Sen. Whitehouse: Is it fair to consider the concept of the marginal utility of money in solving a problem like this on the revenue side?
▶ 1:39:52Ms. Altman: Yes. In fact, on the side, social security benefits generally go to low and middle income people who spend them of their local communities immediately. It is estimated for every dollar of social security benefits that is paid, it is $2 of economic activity. 12 million jobs created in 2023, that kind of thing.
▶ 1:40:23Ms. Altman: Absolutely. Your proposal, senator sanders' proposal would strengthen the economy. Any benefit cuts would weaken the economy.
▶ 1:40:32Sen. Whitehouse: I meant on the revenue side. Is it not more fair to look at funding social security and medicare out of the wealth that very wealthy people to not even know exist? They will never know if it is not there. It is marginal utility dollar, zero value compared to people working on a regular salary and paying taxes.
▶ 1:40:58Ms. Altman: Absolutely. It is unimaginable, a trillionaire, elon musk, you cannot spend that in one million lifetimes. Absolutely on the revenue side. It is a basic american value that we have progressive taxation, for just the reasons you are saying. I think it is absolutely the right way to think about it.
▶ 1:41:21Sen. Whitehouse: I think ben franklin said the trip to taxation is to get as many feathers as you can off the goose without the goose honking. [laughter] this is like huge feather pillows' worth of feathers that a goose like elon musk would never notice. Never notice.
▶ 1:41:48Sen. Whitehouse: It has literally no value or utility to him, yet deployed in this way can enhance the economy and the quality of people's lives. Thank you.
▶ 1:42:02Chair Grassley: I want to thank you three people for participating and everything. And for all the members were not here, for folks who may get these questions, the record will remain open for one week. Senators wishing to submit questions for the record must do so by july 1 at 5:00 p.m. Thank you, senator sanders.
▶ 1:42:28Sen. Sanders: Let me think the panelists, as well.
▶ 1:42:32Chair Grassley: Thank you. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]