Treasury Secretary Janet Yellen has admitted that President Biden "doesn’t have a plan" – only "principles" – when it comes to preventing Social Security from going insolvent around a decade from now.
Yellen made the remark Thursday during a Senate Finance Committee Hearing in Washington on Biden’s fiscal year 2025 budget. Government projections last year estimated that the Social Security retirement fund could run out of money as soon as 2033, and Biden has floated raising taxes on top earners to make up for the shortfall.
"I'll note that there's already been $4.9 trillion in new taxes proposed for those making over $400,000 a year. It seems to be the go-to place, fill in the blank, we're going to tax those over 400,000 a year for whatever," Sen. Bill Cassidy, R-La., told Yellen. "Of that $4.9 trillion, none of that has been dedicated to Social Security."
Cassidy then asked Yellen what the tax rate would have to be on those earners to address "the unfunded accrued liability for Social Security," because the "president theoretically has a plan."
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Yellen first said "I don't have that computation to offer you" before saying that "The president doesn't have a plan. He has principles.
"He wants to work with Congress to find a way to protect Social Security and extended its solvency beyond 2034," she added.
Yellen, when asked by Cassidy how Biden could "justify not having a plan" for Social Security "when he's been in office for three years already," said the president "believes it's important to work with Congress."
However, Cassidy argued that he and other members on the Senate Finance Committee have not heard "one peep" from Biden on that matter.
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"Secretary Yellen made clear in her testimony that President Biden has put forward an approach that would strengthen Social Security by protecting seniors from benefit cuts and extend solvency by asking the highest-income Americans to pay their fair share," Treasury Principal Deputy Secretary for Public Affairs Michael Gwin told FOX Business following the hearing.
"Congressional Republicans should work with the President to protect and strengthen Social Security, but instead most House Republicans unveiled a plan this very week that would raise the eligibility age for seniors who have spent decades working towards their retirement," he added.
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Unless major changes are made before 2034 to shore up the entitlement program, more than 66 million Americans would see a benefit reduction between about 23% to 25%.
FOX Business’ Megan Henney and Edward Lawrence contributed to this report.
