Cutting Social Security is Not the Only Option to Save Its Solvency
It looks like Social Security cuts might be back on the table if some politicians get their way. According to a Yahoo! Finance report, a group of Republican lawmakers thinks the best way to balance the federal budget and slash government spending is by targeting programs like Social Security.
The article revealed that the 176-member House Republican Study Committee (RSC) recently approved a fiscal plan that would gradually increase the full retirement age (FRA) to 69 years old for seniors who turn 62 in 2033. The current full retirement age is 66 or 67, depending on your birth year. For all Americans born in 1960 or later, the FRA is 67. It’s important to note that if the FRA is raised, workers planning to retire earlier will see their lifetime payments drastically reduced.
Pay Fair Share
On the other side of the aisle, Democrats believe the best way to ensure Social Security solvency is through higher payroll taxes or reductions to benefits for wealthy Americans. That’s the basis behind the Social Security Expansion Act proposed by Senator Bernie Sanders (I – Vermont).
To ensure Social Security can pay out future benefits, Sen. Sanders thinks high-wage earners and the wealthy need to pay their fair share. His bill proposes subjecting earnings over $250,000 to the 12.4 percent payroll tax. Currently, only $160,200 of wage income is subject to payroll taxes. He would like to levy other taxes as well, such as subjecting investment income over $200,000 to payroll taxes.
According to Sen. Sanders, lifting the cap on Social Security taxes would extend its solvency until the year 2096, ensuring that benefits are not cut.
Additionally, the Social Security Expansion Act would provide bigger monthly benefits — about $200 on average. It will also establish a fairer cost-of-living adjustment (COLA) by using the Consumer Price Index for the Elderly (CPI-E) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently because the CPI-E takes into account the unique spending habits of seniors.
The Seniors Trust supports this proposed legislation. You can help our efforts by signing our petition calling on Congress to enact the Social Security Expansion Act.
