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Matt Frankel, The Motley Fool

What The 2016 Presidential Election Could Mean For

Social Security

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• In general, Democrats feel that Social Security should be kept as-is in terms of benefits and retirement age, and taxes should be increased to pay for the shortfall.

• On the other hand, Republicans tend to favor benefit cuts or retirement age increases to achieve solvency.

General trends

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However, the 2016 presidential candidates have their own unique

positions…

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• The top-tier Democratic presidential candidates are– Hillary Clinton– Bernie Sanders– Joe Biden

The Democrats

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Hillary Clinton

• Clinton views Social Security as a necessity, and has vowed to defend it

• She favors increasing the payroll cap in order to prolong solvency

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Bernie Sanders• Sanders not only wants to keep

Social Security, he wants to expand it

• He recently introduced a bill that would– Increase benefits by $65 per

month– Increase cost-of-living

adjustments– Set a minimum benefit amount

• He plans to fund this by subjecting all income over $250,000 to the payroll tax

• In addition to increasing benefits, this plan would keep SS solvent until 2060

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Joe Biden

• Biden opposes any type of Social Security privatization

• In the past, he has favored increasing Social Security taxes on the rich in order to keep the system solvent

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• There is no shortage of Republican candidates (over 35 as of August 2015), but we’ll take a look at– Donald Trump– Jeb Bush– Scott Walker– Mike Huckabee– Dr. Ben Carson– Ted Cruz– Marco Rubio– Chris Christie– Rand Paul

The Republicans

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Donald Trump• Unlike the other Republican

candidates, Trump is opposed to any Social Security cuts

• He wants to eliminate waste (improper payments)

• Intends to find ways to increase Social Security’s income other than cutting benefits

Photo: Gage Skidmore

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Jeb Bush

• Bush is in favor of increasing the normal retirement age to 68 or even 70

• He is also open to cutting SS benefits for the wealthy

• Ideally, he is in favor of privatization, but acknowledges that it will be a tough sell

Photo: Gage Skidmore

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Scott Walker

• Walker is yet to speak extensively on Social Security, but has said the system needs “significant reforms”

• In the past, he has said that entitlement programs should be cutPhoto: Michael Vadon

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Mike Huckabee• Huckabee believes the

funding method (payroll tax) is less than ideal, and wants to explore other methods of funding Social Security

• He also wants to see additional options for benefits, such as the ability of a retiree to receive a lump sum, rather than a lifetime of payments Photo: Gage Skidmore

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Dr. Ben Carson• Carson is a proponent

of gradually increasing the retirement age

• Believes Social Security should be a supplemental program, and stresses personal responsibility for retirement savings

Photo: Gage Skidmore

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Ted Cruz

• In addition to gradually increasing the retirement age, Cruz also wants to cap the growth rate of Social Security payments (cost-of-living increases)

• He is also in favor of some form of privatization

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Marco Rubio

• Rubio is yet to unveil a specific plan, but says that the younger generations need to accept that the Social Security system they experience will be much different than their parents

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Chris Christie• Christie has one of the most

specific and ambitious Social Security plans of any candidate thus far

• He intends to cut benefits for seniors who earn more than $80,000 per year, and eliminate benefits altogether for those earning more than $200,000

• He also wants to gradually increase the full retirement age to 69, and the early retirement age to 64 Photo: Michael Vadon

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Rand Paul• Paul wants to preserve

the current level of benefits for retirees and near-retirees

• For younger Americans, Paul supports gradually increasing the retirement age and means-testing yearly earnings

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