Senators Look for Ways to Solve Social Security Insolvency
Time is running out. Lawmakers have less than 10 years to come up with a fix before the Social Security trust fund runs out and retirement benefits are slashed by more than 20 percent. Fortunately, several U.S. Senators are stepping up and pushing proposals they believe will solve Social Security’s insolvency issue.
American Press reported on one recent forum during which Sen. Bill Cassidy (R-La.) spoke about this “Big Idea” to solve the problem. He explained that right now the money paid into Social Security is by law kept in cash or into treasuries, but the interest rates on the treasuries that hold Social Security funds are not keeping up with rising inflation.
Sen. Cassidy’s bipartisan plan calls for creating a separate pool of money called the Save and Secure It Fund ($1.5 trillion) and investing it, similar to how a traditional 401(k) or pension fund works. The idea is that Social Security could “borrow to secure scheduled benefits and use the money in the Save and Secure It fund as it grows overtime to offset the borrowing.” Cassidy claims the fund would address 70 percent of the shortfall associated with promised Social Security benefits.
A Better Plan
The Seniors Trust stands behind the Social Security Expansion Act introduced by U.S. Sen. Bernie Sanders (I-Vt.). Not only would it ensure the long-term solvency of Social Security, but it would also provide seniors with bigger benefits.
Under this bill, seniors would receive an extra $2,400 in benefits each year. In addition, it would recalculate the way the Social Security cost-of-living-adjustment (COLA) is calculated, using the Consumer Price Index for the Elderly (CPI-E) instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-E more accurately reflects the actual spending of seniors, which tends to be on expenses such as healthcare and housing.
To fund the proposed benefits boost and maintain solvency far into the future, the Social Security Expansion Act calls for applying the Social Security payroll tax on all income above $250,000. Currently, earnings above $160,200 aren’t subject to the Social Security tax.
Join Our Efforts
The Seniors Trust believes the Social Security Expansion Act seeks to reform Social Security the right way: by expanding and strengthening benefits proven to reduce senior poverty and improve retirement security as well as extending the solvency of this crucial program.
Please, sign our petition to Congress and join us as we strive to improve the lives of senior citizens.
