Why Fixing Social Security is So Hard

Social Security has about 10 years left before it is unable to pay all its promised benefits. Experts predict its trust fund will be depleted by 2034, at which time the Social Security Administration (SSA) will only be able to cover 80 percent of benefits.

Unfortunately, CNN reports that the insolvency date is probably still too far in the future to get Congress to take action. The news agency points out that the last time lawmakers enacted a major overhaul, in 1983, Social Security was just months away from being able to pay full benefits.

According to the article, there’s no reason to procrastinate when there are really only two options available: cut benefits or raise revenue.

Raising the Full Retirement Age

One proposal is to raise the retirement age. Currently, Americans can start collecting Social Security benefits at 62. However, that can reduce lifetime payments by as much as 30 percent. The full retirement age, which had been 65 for much of the program’s existence, is now slowly rising to 67 for Americans born in 1960 or later.

Because people are living longer today, some policymakers want to raise the full retirement age to 70 for future retirees. They say doing so could wipe out about a third of the Social Security trust fund’s 75-year deficit.

Increasing Payroll Tax

Another idea to help fill Social Security’s coffers is to increase the amount of payroll taxes collected. Many politicians want to lift the wage cap so that higher-income earners pay more in payroll taxes.

There have been a few different versions of this plan, but The Seniors Trust believes the Social Security Expansion Act, introduced by Sen. Bernie Sanders and Sen. Elizabeth Warren, is the best option. It would subject all income above $250,000 to the payroll tax and apply it to investment and business income. They say their reforms would extend Social Security’s solvency for 75 years.

If this is an idea you can get behind, please add your name to our petition calling on Congress to enact the Social Security Expansion Act.