© Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen takes questions on the Biden administration’s plans following the collapse of three U.S. lenders together with Silicon Valley Bank and Signature Bank, as she testifies earlier than a Senate Finance Committee listening to
By Richard Cowan
WASHINGTON (Reuters) – A Republican U.S. senator’s accusation on Thursday that Treasury Secretary Janet Yellen had lied throughout a tussle over the way forward for the Social Security program obscured behind-the-scenes talks between the White House and lawmakers which have been underway for months, based on sources.
The disagreement got here in a Senate Finance Committee listening to when Republican Senator Bill Cassidy requested Yellen if Democratic President Joe Biden was conscious that Social Security funds will run out throughout the subsequent decade until Congress shores up the favored retirement program with 66 million beneficiaries.
When Yellen responded that Biden “stands ready to work” with lawmakers, Cassidy shot again, “That’s a lie because when a bipartisan group of senators has repeatedly requested to meet with him about Social (Security) … we have not heard anything on our requests.”
For a number of months now, Cassidy and impartial Senator Angus King, who caucuses with Democrats, have tried to deal with Social Security underfunding as roughly 10,000 child boomers retire every single day.
Within a decade, tax revenues and a backup devoted belief fund can be inadequate to satisfy the payouts for what is usually considered essentially the most profitable program the federal authorities has administered since Social Security’s inception in 1935.
Central to the Cassidy-King bipartisan effort is the doable creation of a second belief fund that for the primary time would permit cash to be invested within the inventory market, as an alternative of conventional Treasury securities that obtain decrease returns.
It can be modeled after a railroad pension fund that invests in shares.
The final week of financial institution failures and worries of a wider-ranging disaster, nevertheless, might give lawmakers second ideas about investing Social Security funds in shares.
Cassidy and King are main a bunch of workhorse senators that embody Republican Mike Rounds, Democrat Tim Kaine and impartial Kyrsten Sinema.
While no conferences between the senators and Biden have been scheduled, a supply accustomed to the discussions mentioned that White House aides are engaged in talks with the Senate. But a formalized plan has not but been crafted to current to Biden, the supply added.
White House officers didn’t reply to a request for remark.
“It’s going to be tough. I don’t think we should sugarcoat it. But there are serious conversations in the Senate … on a package that would improve Social Security’s finances,” mentioned Shai Akabas, financial coverage director on the Bipartisan Policy Center, a centrist suppose tank in Washington.
The senators’ effort isn’t the one Social Security rescue plan being devised.
Democrats in Congress would possibly rally round a invoice that Representative John Larson will unveil by early April, which might improve advantages across-the-board together with different modifications, with an emphasis on serving to these receiving the least.
“There are close to 5 million Americans who get below-poverty level checks from Social Security,”Larson mentioned. His invoice would create a brand new flooring for advantages at 125% of the poverty degree, “making sure no one can ever retire into poverty.”
To succeed, any proposal would want the help of Democrats, who management the Senate, and Republicans, who’ve the bulk within the House of Representatives.
Several House Republicans have been pushing for an outdoor fee to suggest reforms below a fast-track approval course of, very like one which was a part of a profitable effort in 1983.
“If someone’s got a better idea that they can pass, that’s great. I tend to be conservative and say this worked once, let’s try that again,” Republican Representative Tom Cole informed Reuters.
“That’s really just a way to have (benefit) cuts without leaving your fingerprints on it,” mentioned Nancy Altman, president of Social Security Works and head of a coalition of labor unions and different liberal-leaning teams.