Now that the election is decided, President Barack Obama and Congress are faced with the fiscal cliff. Social Security, which accounts for 20 percent of the U.S. budget, is the big target on the edge of that cliff.
The program's defenders are lining up to do battle.
Social Security Works, a coalition that urges increases in the program and fights cuts, has launched what it calls The Lame Duck Whip Count, which is keeping track of how members of Congress stand on cuts to Social Security, Medicare and Medicaid.
The number of members of the Republican-controlled House of Representatives who support this stance is unclear, but so far, nearly 30 mostly Democratic senators are on the Whip Count no-cuts list. At an early morning, post-election news conference calling for a quick fiscal cliff fix, Senate Majority Leader Harry Reid said, "We are not going to mess with Social Security."
Vermont Sen. Bernie Sanders, an Independent, is circulating an online petition at SignOn.org that calls for no benefit cuts to Social Security, Medicare and Medicaid. He already has nearly 100,000 electronic signatures -- and his effort has only just begun.
Social Security actuaries conclude that if we don't do something to control the cost of Social Security, by 2033, the program will only be collecting enough money to pay 75 percent of benefits owed. It may not look like it, but the political will to fix this problem is actually increasing, says Alison Borland, vice president of retirement solutions and strategies at human resources consultancy Aon Hewitt. But Borland doesn't see the fixes affecting people living in retirement or nearing it.
"There are easier things to stomach that impact people who are retiring 20, 30 or 40 years from now," she says.
She thinks that tax-saving tweaks to retirement savings plans such as IRAs and 401(k)s are more likely. Those changes could include eliminating some of the tax-deferred retirement plans, leaving only some version of a 401(k), probably a Roth 401(k) because it pushes the tax savings down the road. She also believes that it is likely that high-income earners will lose the ability to deduct much of their retirement savings.
In return, she predicts retirement planning will become more flexible with savers able to invest in a wider variety of options. "I think there is broad appreciation and recognition that retirement security is incredibly important, and you can expect the trade-off to any cuts to be a focus on getting more results from our investments," she says.