Slowing Covid-19 will negatively impact the Social Security program
There’s no understating the problem. Social Security was already due to run a deficit in 2020 and to continue doing so until 2034-35. All reserves would be exhausted then and necessitate across the board cuts of 20-23% for all. With millions of people now out of work, they and their employers are now not contributing 6.2% each toward the Social Security Trust Fund. The payroll tax on earned income brings in the lion’s share of revenue, and unemployment benefits and stimulus checks do not count as earned income. Sean Williams notes in this piece that the damage from Covid-19 will not just be limited to 2020. The loss of revenue will affect the long term health of the program, though as he points out, Social Security cannot go bankrupt. Still the program will be unable to provide full, promised benefits under current law once it goes insolvent. Read his full piece here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC supports a bipartisan compromise, “The Social Security Guarantee Act,” taking portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own research. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with many congressional offices and staff over the past several years. Read AMAC’s plan here.
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