Latest / Bloomberg Intelligence / Kiplinger's Housiaux on Candidates and Social Security (Audio)

Transcript

Kiplinger's Housiaux on Candidates and Social Security (Audio) · Bloomberg Intelligence

• 0:02
  Speaker 1: Global business news twenty four hours a day at Bloomberg
• 0:05
  Speaker 1: dot Com, the Radio, plus Molobile Act and on your radio.
• 0:09
  Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
• 0:13
  Speaker 1: I'm Charlie plot To dial the SMPNAZDAC all declined. Today's
• 0:17
  Speaker 1: stocks were retreating from records as a tumble in the
• 0:19
  Speaker 1: price of crude sinks energy shares. West Texas Intermediate Crude
• 0:24
  Speaker 1: down two point six percent. Drop there of one point
• 0:27
  Speaker 1: to a dollar fourteen to forty three oh five of
• 0:30
  Speaker 1: barrel on West Texas Intermediate Gold down six tenths of
• 0:34
  Speaker 1: one percent, falling eight ten the ounce the thirteen fifteen.
• 0:37
  Speaker 1: We are minutes away from getting latest numbers from Texas Instruments.
• 0:42
  Speaker 1: Moments ago, we heard from Gilead Sciences it lowered its
• 0:45
  Speaker 1: net products sales forecast for twenty sixteen, sending the shares
• 0:49
  Speaker 1: lower and late trading Gilliad down about four and a
• 0:52
  Speaker 1: half percent. SMP down six to drop there are three
• 0:56
  Speaker 1: tenths of one percent to down down seventy seven the
• 0:59
  Speaker 1: dropped there of four tense of one percent. I'm Charlie Pelt.
• 1:02
  Speaker 1: That's a Bloomberg business flash. You're listening to Taking Stock
• 1:08
  Speaker 1: with Bim Fox and Kathleen Hayes on Bloomberg Radio. The
• 1:13
  Speaker 1: Democratic National Convention getting underway into Philadelphia. What role will
• 1:18
  Speaker 1: social security play in the debates that will be hearing
• 1:22
  Speaker 1: this week? There's a big push to try to get
• 1:24
  Speaker 1: younger voters to the polls, but we know that it's
• 1:26
  Speaker 1: many times it's older voters that are the most faithful.
• 1:30
  Speaker 1: Can anybody touch the third reel of politics in a
• 1:33
  Speaker 1: way that we'll get them votes? Are they all going
• 1:35
  Speaker 1: to hold back? Join us now? Matthew Hoosier, he's a
• 1:38
  Speaker 1: reporter for the Kiplinger Letter, and he's been writing about
• 1:42
  Speaker 1: this very issue, suggesting that while Hillary Clinton and Donald
• 1:47
  Speaker 1: Trump could both make some proposals in all likelihood, they won't,
• 1:50
  Speaker 1: at least not when it comes to cutting Social Security. Matthew,
• 1:54
  Speaker 1: welcome to taking Stock. Hi, thanks for having me so
• 1:59
  Speaker 1: so far. What have we heard from Miss Clinton and
• 2:02
  Speaker 1: Mr Trump on this issue? Well, uh, Mrs Clinton has
• 2:08
  Speaker 1: suggested that she wants to expand social Security benefits kind
• 2:11
  Speaker 1: of following her party's moved to the last In particular,
• 2:15
  Speaker 1: she wants to expand them for caregivers, people who left
• 2:18
  Speaker 1: the workforce for a period of time to take care
• 2:21
  Speaker 1: of a loud when our family member and therefore weren't
• 2:23
  Speaker 1: able to access the Social Security system. Um So, she
• 2:26
  Speaker 1: wants to make sure they're going to have a secure
• 2:28
  Speaker 1: retirement and to do that. To pay for that, she
• 2:30
  Speaker 1: would ask high income earners to pay um a little
• 2:34
  Speaker 1: bit more into the system in order to make that work.
• 2:37
  Speaker 1: And Donald Trump has also pledged not to touch Social
• 2:41
  Speaker 1: Security benefits. His goal is to basically make the economy
• 2:46
  Speaker 1: better and therefore have more workers paying into the system,
• 2:50
  Speaker 1: and hopefully that will help ease the funding shortfall that
• 2:54
  Speaker 1: Social Security is currently projected to face here in the
• 2:57
  Speaker 1: next couple of decades. Matthew, to you give us some
• 3:00
  Speaker 1: detail on social Security, because it is not just the benefits.
• 3:05
  Speaker 1: One third of retirees receive almost all their retirement income
• 3:09
  Speaker 1: from the system. Two thirds received more than half from
• 3:12
  Speaker 1: Social Security. But yet there is also the Social Security
• 3:15
  Speaker 1: Disability Insurance Trust Fund. Tell us about that and whether
• 3:21
  Speaker 1: that is also on the table to be debated because
• 3:24
  Speaker 1: that's expected to run out of money certainly. Um So,
• 3:28
  Speaker 1: that obviously, as you mentioned, is a much more immediate problem.
• 3:32
  Speaker 1: Um And Uh, Ultimately it works in the same way
• 3:36
  Speaker 1: as the retirement fund does in the sense that it's
• 3:39
  Speaker 1: funded by worker contributions in PAYWORL taxes. Uh. And obviously
• 3:44
  Speaker 1: last at the end of last year, you had Congress
• 3:47
  Speaker 1: work at a deal that basically tacked took money from
• 3:50
  Speaker 1: the retirement fund in order to um keep the disability
• 3:55
  Speaker 1: funds solvents um for up through I believe eighteen And
• 4:00
  Speaker 1: um my, my assumption is our our assumption here at
• 4:04
  Speaker 1: that keeping it is that ultimately Congress will end up
• 4:07
  Speaker 1: having to act on that here the next couple of years, however,
• 4:11
  Speaker 1: on most of the discussion in the campaign season is
• 4:14
  Speaker 1: going to be focused on the retirement program because that's
• 4:17
  Speaker 1: um the aspect of the Social Security program that voters
• 4:20
  Speaker 1: are really really passionate about and really care about. At
• 4:23
  Speaker 1: this point, Okay, with Donald Trump pledging not to touch
• 4:26
  Speaker 1: Social Security but close the funding gap by pretty more
• 4:29
  Speaker 1: jobs and therefore you people have to pay more payroll
• 4:32
  Speaker 1: taxes and that will that will offset this deficit. How
• 4:38
  Speaker 1: fast would the US economy have to grow? How many
• 4:41
  Speaker 1: more people would have to be in the labor force
• 4:42
  Speaker 1: working to come close to that? Boy, I'll tell you
• 4:46
  Speaker 1: what I am. I am not unfortunately a trained economist
• 4:48
  Speaker 1: so I did not was not able to do any
• 4:51
  Speaker 1: calculations in that, or was not able to find anybody
• 4:53
  Speaker 1: who had done any sort of concrete calculations on that.
• 4:57
  Speaker 1: So I could not. But broadly, is there any and
• 5:00
  Speaker 1: I mean who who who out there agrees that, yeah,
• 5:02
  Speaker 1: just faster economic growth would help close the gap? Or
• 5:05
  Speaker 1: is this? I have not known to anybody who's any
• 5:08
  Speaker 1: like very reputable economist who has supports or who thinks
• 5:11
  Speaker 1: that that would ultimately work. Matthew, Sorry to stay in
• 5:15
  Speaker 1: the weeds here, but um you know, you talked about
• 5:17
  Speaker 1: this reallocation between the Disability Insurance Trust and the Old
• 5:22
  Speaker 1: Age and Survivors Insurance Trust Fund. They've been doing that
• 5:25
  Speaker 1: for years. But the Survivor's Insurance Trust Fund, if all
• 5:30
  Speaker 1: of the problems are put onto that, then won't that
• 5:34
  Speaker 1: just hasten its own shortfall? Um So that would be
• 5:39
  Speaker 1: assuming that, uh, ultimately that nothing is going to be
• 5:42
  Speaker 1: done about about the funding shortfall. However, we do anticipate
• 5:48
  Speaker 1: that at some point before um, you actually get to
• 5:52
  Speaker 1: the point where the Social Security program is unable to
• 5:56
  Speaker 1: UM fund all of its various liabilities, sometime before then,
• 6:00
  Speaker 1: Congress will find a way that sounds like a hope
• 6:02
  Speaker 1: as much. I mean, not that that's bad, but I
• 6:04
  Speaker 1: mean that does sound like more of a hope than
• 6:06
  Speaker 1: anything that's based on practical knowledge. It is it is well,
• 6:10
  Speaker 1: it is certainly a hope. UM. The reason that UM,
• 6:13
  Speaker 1: I guess we would put it like that is just
• 6:16
  Speaker 1: Congress tends not to act unless it absolutely must UM.
• 6:20
  Speaker 1: And so we don't anticipate seeing any sort of major
• 6:22
  Speaker 1: action on social security in the next four years, with
• 6:25
  Speaker 1: the exception of something done to help fund the disability funds,
• 6:29
  Speaker 1: which will probably just be similar to the last fix,
• 6:32
  Speaker 1: where you're moving money from the retirement's account into the
• 6:36
  Speaker 1: disability fund. So if I'm somebody relying on my social
• 6:40
  Speaker 1: security UH, in large part from retirement, what what should
• 6:44
  Speaker 1: I be worried about? We're not worried about, UM. If
• 6:47
  Speaker 1: you're relying on it currently. UM. If you're lying at
• 6:50
  Speaker 1: it currently, you shouldn't have to worry about too much.
• 6:52
  Speaker 1: None of the major changes that are being proposed are
• 6:55
  Speaker 1: going to come into effect, um obviously in the next
• 6:59
  Speaker 1: four years, and we don't we don't think, and probably
• 7:02
  Speaker 1: not within even if they were to come into effect them,
• 7:05
  Speaker 1: they would not affect current social Security recipient. Thanks very
• 7:09
  Speaker 1: much for joining us and giving us that view on
• 7:12
  Speaker 1: social security. Matthew Hooser is a reporter for The Kipsinger
• 7:16
  Speaker 1: Letter based in Washington, d C. I'm pim Fox. My
• 7:21
  Speaker 1: co host Kathleen Hayes. This is taking stock are thanks.
• 7:25
  Speaker 1: Thank your producer, Reggie basil Our. Thanks also to Sam Lana,
• 7:29
  Speaker 1: our producer. Coming up. The Democratic National Conventional kicks off
• 7:35
  Speaker 1: in Philadelphia, Pennsylvania. And this is Bloomberg coming up Bloomberg
• 7:48
  Speaker 1: Law brought you by ben Zel Bush. Introducing in the
• 7:50
  Speaker 1: world's most technologically advanced vehicle, the new twenty seventeen Mercedes
• 7:54
  Speaker 1: Best Eat Class Sidan at ben Zelbush to find the
• 7:56
  Speaker 1: Way you drive at ben Zelbush, America's premiere auto dealership
• 7:59
  Speaker 1: in Englewood, New je