The Universal Impact of Social Security Insolvency - CRFB; AMAC
Yesterday, the Committee for a Responsible Federal Budget’s (CRFB) Senior Vice President & Senior Policy Director, Marc Goldwein, participated in a discussion relating to CRFB’s “No State Spared: Mapping the Impact of Social Security’s Insolvency.” His comments addressed the interactive map developed by CRFB to illustrate the state-by-state impact of the projected benefit reduction that would follow the full depletion of Social Security’s trust fund reserves, a point now believed to be just six years away. He noted that, through CRFB’s map, the local and national impact of each state’s benefit reductions can be viewed, along with the number of Social Security recipients affected and the average household impact of projected benefit cuts.
In addition to explaining the state-level effects of insolvency, Goldwein participated in a 20-minute discussion on C-SPAN’s Washington Journal about the financial crisis facing Social Security. During the discussion, he fielded questions from callers about key constituent concerns, including fraud, the adequacy of benefits, immigration and its impact on Social Security finances, the full retirement age, and the cap on earnings subject to payroll taxation, to name a few. He also touched on several specific areas where CRFB recommends changes, including targeting maximum benefit levels and changes to the employer side of the Social Security revenue stream. Click here to view the recording of this discussion.
Absence of the Political Will to Move Forward
During his remarks, Goldwein discussed numerous proposed program solutions to address Social Security’s financial problems, suggesting that part of the problem is a lack of political will to move forward with a comprehensive solution. At this point, six years away from insolvency, he noted that “…almost nobody has a plan to fix this.” In contrast, we note that many organizations are working toward the common goal of ensuring Social Security’s long-term viability. One such organization–the Association of Mature American Citizens (AMAC)–has developed a proposal to address insolvency, based on the premise that Social Security must be preserved and modernized to meet the demands of 21st-century economics.
AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating payments to higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with steps to ensure that a larger percentage of total worker earnings is subject to FICA/SECA payroll taxes. Other changes advocated by AMAC include (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved savings tools for future retirees, including a savings account that builds estate value.
AMAC is resolute in its mission to preserve Social Security for current and future generations and has drawn the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. Most recently, the proposed legislative framework has been reviewed with officials at the Social Security Administration. For more information on the AMAC proposal, read the “AMAC Social Security Guarantee” document on their website.