In a Sea of Red Ink, should Congress Seek Fiscal Reform? - Pensions & Investments

With the national debt now exceeding $33 Trillion, and Social Security and Medicare facing insolvency in less than a decade, it’s hard for the average American to understand why anyone would oppose Congress seeking ways to restore fiscal stability. Then again, in today’s political climate, it seems that whatever is proposed by one side is summarily dismissed by the other as a horrible idea. Such seems to be the case discussed in this Courtney Degen article appearing in Pensions & Investments magazine, explaining how one Congressional Representative views a bill being advanced by the House Budget Committee – H.R. 5779 – The Fiscal Commission Act. The bill appears to be bipartisan, with a dozen cosponsors on each side of the aisle, but nevertheless elicited scorn from one Committee member as a thinly veiled attempt to cut Social Security and Medicare. The opposing Congressman’s view is that it is only necessary to “increase the revenues into Social Security and Medicare” to restore both programs to solid financial footing, which sounds eerily like a call to simply raise taxes to accomplish that goal. But yet another Congressman posited that the proposed Fiscal Commission would, instead, “serve this Congress in a supplementary role by developing policy solutions to address the debt and bringing them to the House floor for a vote.”

The fact is, Social Security (and Medicare) are in dire need of structural reform. If that reform does not occur, the Trust Funds – which now allow full benefits to be paid – will be fully depleted, resulting in automatic across the board cuts to both programs. In the case of Social Security, a 23% cut in everyone’s benefit is now projected to start in 2033 – unless Congress puts partisan politics aside and works together to restore the programs to fiscal stability. To read about the proposed Fiscal Commission, and to review the article on this topic in Pensions and Investment magazine, click here.

As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized.  This can be achieved without tax increases by slight modifications to cost of living adjustments and payments to high income beneficiaries plus gradually increasing the full (but not early) retirement age.  AMAC Action, AMAC’s advocacy arm, supports raising the thresholds at which benefits are taxed and then indexing for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to 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 many congressional offices and staff over the past decade. 

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