“You are not serious people,” Logan Roy told his children in an episode of the beloved HBO show “Succession”.
Guy Williams, president of Gulf Bank and Trust, told WWL’s Newell Normand that he has a similar message for both Republicans and Democrats.
“What Fitch is saying is: Neither of y’all – saying the two primary parties – are paying much attention, and both of them are looking to things like Social Security and saying unserious things.”
Fitch is a credit rating agency. At the start of the month, it announced that it downgraded the long-term ratings for the U.S. from AA+ to AAA.
“The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions,” said Fitch in its announcement.
As far as Social Security is concerned, Fitch’s view is that lawmakers have made “only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population.”
Social Security was created in the wake of the Great Depression to provide people in the U.S. with economic security. This program is financed through a dedicated payroll tax – employers and employees each pay 6.2% of wages up to the taxable maximum of $160,200 (as of 2023), while self-employed people pay 12.4%.
Last December, the Congressional Budget Office said in a report that if the Social Security program continues as it does currently that funds would run out in around a decade. Williams said that neither former President Donald Trump nor current President Joe Biden have offered reasonable plans to keep the Social Security program running.
“You know, President Biden and former President Trump are both saying, ‘Well, I’m not going to touch Social Security,’ What that means is in 11 years there’ll be a cut in payments to 77% of the current payment because the Social Security trust fund will be out of money. So, if you don’t touch it, what you’re saying is we’re going to cut payments.”
According to CBS News, cuts to Social Security would be devastating, especially to the low- and middle-income earners who bear the brunt of funding for the program. While some Republicans have suggested raising the age to collect retirement Social Security to 70, Democrats have suggested raising the income cap so those who make more than $160,000 have to share some of the burden.
Deputy Chief Actuary Karen Glenn said a proposal from Vermont Sen. Bernie Sanders (D-Vt.) to increase this cap to those making up to $250,000 would keep the fund solvent for 75 years.
According to Fitch, “implementation of a fiscal adjustment to address rising mandatory spending or to fund such spending with additional revenues, resulting in a medium-term decline in the general government debt-to-GDP ratio,” is one of the ways the U.S. could build its rating back up.
However, Williams said he doesn’t think the solution is simple.
“What Fitch is saying – the trajectory we are on, the lack of seriousness in Washington really concerns,” them. “And they’re actually, you know, pointing out a serious problem that we have ignored as a country because, you know, we’d rather focus on the latest hot button issue or the, you know, the tweet of the day instead of a serious problem that’s headed toward us and will impact everybody.”
Listen to Williams’ full conversation with Normand here.
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