Q: Can we afford to increase Social Security benefits?

A: YES.

Because Social Security is running a surplus.

Yes, Social Security is projected to become insolvent by 2034. Does that mean Social Security is projected to become bankrupt by 2034? Absolutely not.

Social Security is a pay-as-you-go system with its own dedicated payroll tax. Social Security will never go bankrupt as long as workers are contributing to it on every paycheck. Claims that Social Security is going “bankrupt” are false.

It is true that by 2034, the surplus built up over years of taking more into the system than needed to pay out benefits will be exhausted. Insolvency is simply the point where obligations officially exceed income, both from taxes and the surplus.

It’s not that retirees won’t receive Social Security, but that without reforms, benefits will only be about 87% funded for the next 50 years. In 75 years with no reforms, benefits will still be funded by 84%.

Until then, Social Security is running a surplus. We can both afford current scheduled benefits AND the expansion of benefits for retirees. In the meantime, it is crucial we enact reforms to extend solvency while allowing for expanded benefits.

Because Social Security’s projected shortfall in comparison to our GDP is miniscule.

According to the 2016 Social Security Trustees report, over this 75-year period, the shortfall amounts to about 0.95% of our nation’s Gross Domestic Product (GDP)–not even one percent.

For comparison, in a blog for The Huffington Post, Nancy Altman makes note of the 1.1% of our GDP unexpectedly spent on military and defense in 2001.

She also points out despite having a much larger GDP, our country spends far less of its percentage on Social Security than other nations, like France, Germany, Japan, and Austria.

And because commonsense reforms can increase solvency without any added cost.

Cuts and tax hikes are not the only tools we have to fix Social Security. With just a few commonsense adjustments, we can add years of solvency to the clock without increasing taxes or cutting benefits.

The most popular strategy is to simply raise or eliminate the tax cap on the wealthiest Americans.   This year, the total income subject to the payroll tax was increased to $127,200. This means that only wages and income up to $127,200 are FICA-taxable.

Most Americans make far less than $127,200 annually–in most cases, 100% of a person’s wages and income is subject to the payroll tax.

But for the 6% of Americans earning in excess of the taxable maximum, everything earned after $127,200 is tax-free. While that may not seem like much, consider that this group includes those making $130,000 and those with yearly incomes in the millions and billions.

It also means those making the least amount of money–and therefore sacrificing the most when taxed–are paying a higher percentage into Social Security than a millionaire.

Legislation like the Social Security Expansion Act proposes taxing all income above $250,000, impacting only the highest 1.5% of earners. This adjustment alone would add 60 years of solvency to the Trust Fund while allowing for expanded benefits like an extra $65 per month, an increased minimum benefit for low-income workers, and a new COLA formula that accurately addresses costs faced by seniors. All without cuts and without tax increases.

Video: YouTube / WeAreSocialSecurity