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Social Security Benefit Cuts on the Table Again
It’s something no politician truly wants to really say out loud nor any voter actually hear in their ear, but the truth is Social Security is unsustainable as currently constituted. As such, benefit cuts must be considered by Congress. Of course, more drastic cuts will occur automatically in 10 years anyway, as that is when all past reserves (surpluses) will be exhausted. Keith Speights notes the debt ceiling deal ignored Social Security. Speaker Kevin McCarthy concedes the deal didn’t accomplish all that he wanted to with the budget ceiling agreement. He states, “This isn’t the end. This doesn’t solve all the problems. This is the first step.” The Speaker plans to form a bipartisan commission to identify additional ways to reduce the deficit. He wants this commission to review the entire budget to find cuts, admitting the two sides “only got to look at 11% of the budget” to find cuts in the debt ceiling deal. “The majority driver of the budget is mandatory spending. It’s Medicare, Social Security, interest on the debt.” Full article here.
The Association of Mature American Citizens (AMAC) 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 the highest income beneficiaries plus gradually increasing the full (but not early) retirement age. AMAC’s plan also increases the threshold where benefits are taxed and then indexes for inflation, and the plan eliminates reducing 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 a great many congressional offices and their staffs over the past decade. See it here.
Better fix is to eliminate the cap now enjoyed by high income wage earners an easy. Fix always Ignored by amac and repubs.
Leonard and Susan,
The idea of eliminating the payroll tax cap isn’t being ignored, it simply doesn’t fix the long term problem. The current administration’s suggestion is to reinstate SS payroll taxes for those who earn more than $400,000 per year. The CBO (Congressional Budget Office) determined that would add only 5 years to the date the SS trust funds are depleted (thus resulting in a benefit cut). Others have suggest eliminating the payroll tax cap altogether, but the CBO estimates that, too, is a short term fix, adding only about 12 years to the insolvency date. Social Security’s financial problem is much more structural than simply raising taxes on those earning more (there aren’t enough high earners). SS is a program designed to pay benefits for a few years (on average) which is now paying benefits for decades (on average). Respectively, eliminating the payroll tax cap is a short term fix which simply kicks the can down the road a bit. Broader reform which restores Social Security to solvency for generations is needed. In any case, please be assured that your feedback is very much appreciated and encouraged.
Russell Gloor
National Social Security Advisor
The AMAC Foundation