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Social Security’s Solvency Debate Continues - Newsweek
The really good news these days is that Congress is finally waking up to address a problem which we, here at the AMAC Foundation, have highlighted for many years – the Social Security program urgently needs to be reformed!! Even the Trustees of Social Security (a group which regularly reports on Social Security’s financial outlook) have warned Congress for many yeas that program change is needed to avoid benefit cuts in the early-2030 decade. In their normally lethargic way, Congress has largely ignored those previous calls. But now, time has essentially run out, and Congress is finally starting to suggest solutions to restore SS to fiscal solvency. Among other proposals, two senators – one Republican and one Democrat – have joined forces to suggest increasing the payroll tax cap will help solve the SS problem, and that is getting some traction in Congress these days. Problem is, of course, that Republicans have long eschewed raising taxes as a panacea, but some are now easing their thoughts on that, in light of the looming crisis.
This Newsweek article by Suzanne Blake, which largely focuses on an apparent Republican willingness to consider raising SS taxes, also provides a very insightful description of the reasons for the issue, and the various options being considered to solve it. Click here to read about Social Security reform ideas and how it might be fixed.
While some other organizations only verbally lament this looming crisis, The Association of Mature American Citizens (AMAC) is actively engaged in providing Congress with ideas for a long-term solution. As an example of leading thinking on reforming Social Security, AMAC believes Social Security must be preserved and modernized to serve future generations. 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 initial benefits for higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) changing the taxable maximum formula to address the unintended loss of revenue; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. See AMAC’s proposal for Social Security reform here.