Another Call for Social Security Reform - The Motley Fool; AMAC
The Motley Fool’s Maurie Backman, in a post on richmond.com, sounds the alarm yet again calling for legislative attention to address Social Security’s solvency problem. As her article suggests, “…lawmakers have a prime opportunity to prevent a universal reduction in Social Security benefits. But whether they’re able to act in time is a different story.” The “prime opportunity” she makes reference to is likely in the form of the 118th Congress that will convene in January of 2023. As she points out, and as many of our posts here in the past have stressed (see this December 2021 post for example), now is the time to tackle the problem, well before any necessary changes would take effect so that workers could adjust retirement plans to account for those changes.
Ms. Backman’s post describes the problem as one in which “…Social Security is expected to owe more money in benefits than it collects in revenue.” While her article suggests that this deficit situation will be encountered in the coming years, one editorial note is in order: the problem is actually here, as reported by the Social Security Trustees in their annual report to Congress issued last month. In this report, the trustees reported a $56.3 billion decline in cash reserves as a result of 2021 program operations, with total program revenue lagging behind total program outlays by about 5%.
In her post, which you can access here, Ms. Backman discusses some potential “fixes” for the problem, notably the oft-suggested raising of the wage tax limit and the pushing back of the full retirement age. As she notes, there are several proposals in the air these days, and that’s likely the reason why there is optimism in some quarters that the next Congress will begin to take the matter more seriously.
AMAC believes Social Security can be preserved and modernized via an approach that calls for no tax increases, ensures the targeting of benefits where needed the most, and provides an avenue for all workers to accumulate financial reserves for retirement. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by the late Rep. Sam Johnson (R-TX) and current Rep. John Larson (D-CT) and merging them with the Association’s own research. One component is Social Security PLUS, a voluntary plan to allow all earners to have more income at retirement. This component is intended to appeal especially to younger workers as a pathway to a comfortable retirement. Learn more about AMAC’s proposal at AMAC.us/Social-Security.
AMAC is resolute in its mission that Social Security be brought into the 21st century and has gotten the attention of lawmakers, meeting with many congressional offices and staff over the past several years. Using the “The Social Security Guarantee Act” as a base, our researchers are actively developing bold, out-of-the-box approaches to achieving what is vital to our Seniors—a sustainable future for their retirement lives.