Social Security reform – where’s the urgency?
This Pension & Benefits article by Brian Croce laments that little has been done to reform a Social Security program clearly headed for partial insolvency. Former Rep. Sam Johnson (R-TX) proposed a bill in the last session to match benefit payments to revenue collected from payroll taxes by cutting benefits three ways: raising the full retirement age to 69, trimming benefits for higher earners, and imposing smaller cost-of-living adjustments for all, with none for those earning more than $85,000. No vote was ever taken. The Social Security Expansion Act would further tax people earning above $250,000 a year, a favorite idea of Democrats but one unpopular with Republicans. Experts think The Social Security 2100 Act, introduced by Rep. John Larson (D-CT) has a good chance of passage in the House, though it is not likely to pass the Senate. It would shore up Social Security while implementing across-the-board benefit increases for current and new beneficiaries and improving cost-of-living adjustments, among other provisions. Added benefits would be paid for by gradually increasing payroll taxes in 2020 so that by 2043, workers and employers each would pay 7.4%, up from 6.2% today. The bill would also tax payroll income above $400,000 at a 12.4% clip. Two other retirement related bills that seem to be gaining steam are The SECURE Act and the Retirement Enhancement Savings Act. Both would make it easier for smaller employers to join open multiple employer plans and add a safe harbor for selecting lifetime income providers in defined contribution plans, among other provisions. Read full article with analysis 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 advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new yet voluntary early retirement 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 a great many congressional offices and their legislative staffs over the past several years. Read AMAC’s plan here.