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Some “outside-the-box” Thinking about Social Security Reform - Roosevelt Institute
As is evident within these pages at the AMAC Foundation’s Social Security information website, as well as in other media outlets, the nation’s treasured senior benefit program, Social Security, is in financial trouble. This is best seen in the annual report to Congress by the Trustees of Social Security (a body of select government agency heads at SSA, Treasury, Labor, and HHS). This year’s annual report revealed (once again) that the Social Security Trust Fund would be fully depleted in late-2032, at which point all benefits would be cut by about 22%. Congress (and everyone else) knows that would be devastating, not only for the direct recipients of SS benefits but also indirectly for the U.S. economy. Fortunately, Congress (and others) are finally waking up to realize that Social Security reform has become an urgent matter.
Of course, here a AMAC and the AMAC Foundation, we have long been vigorously promoting reform of the Social Security program to avoid potential the 2032 crisis. We have, for years, lobbied Congress to address this problem, even offering common sense solutions for Congress to consider. Indeed we have recently completely updated our SS reform proposal to accommodate current economics, and we continue to explore all available means to encourage our legislators to make the needed changes to this critically important program. In this we have highlighted that a large part of the problem is how the structure of the SS revenue stream has evolved over the years to exempt much income from being subject to Social Security taxes.
That latter point is the thrust of this article by the Roosevelt Institute, which highlights analyses by several prominent scholars on how to fix the revenue shortfall now being experienced by Social Security – the very core issue facing the program. The article includes three separate lines of thought on how to fix the revenue shortfall; a bit of a long read, but very interesting and insightful for those who seek solutions to the looming Social Security crisis.
While some other organizations only verbally lament this looming crisis, The Association of Mature American Citizens (AMAC) is actively engaged in providing Congress with ideas for a long-term solution. As an example of leading thinking on reforming Social Security, AMAC believes Social Security must be preserved and modernized to serve future generations. AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating initial benefits for higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) changing the taxable maximum formula to address the unintended loss of revenue; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving savings tools for future retirees, including a savings account that builds estate value. 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. See AMAC’s proposal for Social Security reform here.