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The only Social Security certainty? American’s are largely opposed to change - Fox Business
One thing is certain, according to a recent survey: Americans are largely opposed (with only one exception) to any changes to the Social Security program. But the problem is that unless changes are made, the program will become “insolvent” in the year 2032. And that insolvency is just as certain as is the opposition to change.
It is first important to understand that “insolvency” is not the same as “bankruptcy.” Insolvency in the SS context means that the program will not be able to pay the full amount of monthly benefits. And that is because incoming SS revenue is less than needed to pay full benefits, but full benefits are still being paid to all because there are substantial reserves in the Social Security Trust Funds which are used to supplement the money needed to pay full benefits to every beneficiary. But, according to the Trustees of Social Security, those Trust Fund reserves will be fully depleted in 2032, which will result in an across the board cut (about 23%) in everyone’s monthly SS payment. That can be avoided, but only if the Social Security program is reformed – and Congress is the body which must accomplish the reform.
There are many options for program reform, most of which are highly unpopular to the general public. In a recent survey by the Ronald Reagan Institute, opposition to the three primary fixes being considered by Congress was strong – those options are raising SS payroll taxes, cutting SS benefits, and raising the SS full retirement age (FRA). In fact, over 3/4ths of those surveyed in a bipartisan sampling of voters opposed changing these factors to fix the SS insolvency problem. And, not coincidently, these are among the key changes being considered by Congress at this time.
This article by Eric Revell at Fox Business discusses the troubling results of the recent survey, revealing also the one SS change that most surveyed are in favor of. Click here to read more.
Reality is this: Congress will need to make some very hard decisions very soon to reform the Social Security program, and it’s quite likely that not all options will be popular with the American public. Hard decisions usually don’t go down easy but, nevertheless, must still be made to restore this extremely important American program to full solvency for generations. As an example of leading thinking on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) 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.