Op-ed: Social Security’s financing challenges are double that of 1983 - AMAC & The Brookings Institution
Authors Louise Sheiner and Georgia Nabors spend most of this article recapping the 1983 Social Security rescue that took place days before the program would hit insolvency. They explain the term “insolvency” and note the 1983 reform was intended to get the program through until 2060. But weaker economic growth, higher disability claims, and general demographics mean insolvency will hit in 2034, if not before. The authors note solutions are generally: (a) reduce benefits; (b) raise payroll tax revenues or other taxes and dedicate the proceeds to the Social Security system; or (c) allow general revenues to be used—i.e. deficit financing. Further, boosting growth by increasing immigration, raising productivity, increasing labor force participation, and/or making Social Security coverage universal (certain state and local government workers are currently not covered) could also help. Full article 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 an increase in the threshold where 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.