A bipartisan group of lawmakers reintroduced Thursday legislation to shore up the Social Security and Medicare Trust Funds. The Time to Rescue United States Trusts, or TRUST Act, would establish bipartisan, bicameral commissions to address the long-term solvency of major trust funds. It was reintroduced Thursday by Sens. Mitt Romney, R-Utah; Joe Manchin, D-WV; and Angus King, I-Maine and Reps. Mike Gallagher, R-Wis.; Ed Case, D-Hawaii; and Scott Peters, D-Calif.
"There is broad recognition that we need to address the looming insolvency of our federal trust funds," said Senator Romney in a statement. "Congress must respond in a way which will address this long-term problem, which is coming down the pike much sooner than was expected. Our TRUST Act is a bipartisan solution which will shore up our federal trust funds and put us on a path toward a stronger fiscal future."
The Congressional Budget Office (CBO) projects the Highway Trust Fund will be insolvent by 2022, the Medicare Hospital Insurance Trust Fund in 2026, the Social Security retirement fund in 2032, and Social Security Disability Insurance in 2035.
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"We've known these funds were in trouble for years, but too many politicians seem content to ignore them—even if it means steep automatic benefit and service cuts on the horizon," the Committee for a Responsible Federal Budget said Thursday in a statement.
During passage of the budget resolution in February, "the Senate voted 71-29 in favor of an amendment supporting the TRUST Act as a way to keep the trust funds solvent," according to the committee. "When today's youngest retirees turn 73 [in 2032], their Social Security benefits would be cut by about 25 percent under the law."
What the Legislation Aims to Do
The TRUST Act "would not make any changes to federal programs," the committee explained in a FAQ. "It would set up a process to encourage bipartisan agreement to avoid automatic cuts that will happen if lawmakers do not act."
'That process would involve establishment of bipartisan, bicameral "rescue committees" for major federal trust funds that are projected to deplete their reserves by 2035—which includes Social Security, Highways, and Medicare Part A. The bipartisan commissions would be "made up of members of Congress that would be charged with restoring the solvency of these important programs. Cost reductions would be on the table, especially reforms to address the overall cost of healthcare, as would benefit expansions and new revenue."
The rescue committees would be tasked with writing legislation to prevent trust fund depletion, improve long-term solvency, and simplify and improve the underlying programs. They could recommend a revenue-only approach, such as Rep. John Larson's (D-Conn.) Social Security 2100 Act or Rep. Earl Blumenauer's (D-Ore.) Rebuild America Act for transportation. Alternatively, they "could also recommend a spending-focused approach or a more balanced approach," the committee said. "Ultimately, recommendations would need to have bipartisan support to succeed."
According to the Committee for a Responsible Federal Budget, the revised bill would set a June 1, 2021, deadline for recommendations.
Also, "lawmakers could advance recommendations anytime they are able to strike an agreement. Legislation reflecting these proposals would receive fast-track consideration in both chambers of Congress while preserving the 60-vote threshold in the Senate," the committee said.
From: ThinkAdvisor
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
