A Different Path to Social Security Reform - AMAC & National Review

Chris Pope, a senior fellow at the Manhattan Institute, has an interesting piece on Social Security here that goes beyond the usual demographic and insolvency explanations and solutions. Pope notes the program costs twice as much as like schemes in Australia and Canada but leaves the poverty rate of seniors in the U.S. higher. He notes most of the program’s expenditures go to fairly affluent seniors and have little effect other than pushing up taxes, reducing work incentives, and crowding out private retirement savings. Pope’s approach would allow workers under 45 to opt for a uniform $17k Social Security retirement benefit (indexed for inflation), regardless of previous earnings — in return for a five-percentage-point payroll-tax cut during the remainder of their working career. “That would cut the cost of the program, reduce its crowd-out of private savings by higher earners, and improve its effectiveness at reducing elderly poverty. If packaged with a three-percentage-point increase to tax rates, which Social Security’s actuaries deem necessary to replenish the trust fund, such a reform might facilitate bipartisan agreement: allowing Democrats to claim that they had restored the solvency of the current system without cutting benefits, and Republicans to argue that taxes were cut by 2 percent on net for those who wished them to be.” Full piece here.

The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized.  This can be achieved without tax increases by changing cost of living adjustments, increasing the retirement age, and modest adjustments to the highest income beneficiaries.  The AMAC plan also suggests eliminating taxation of benefits, or at least annually adjusting the amount taxed for inflation, and eliminating the reduction of benefits for those who work before full retirement age.  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 a great many congressional offices and their staffs over the past several years. 

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