Lawmakers Struggle to Try to Solve Social Security Solvency Woes
Social Security is facing a severe solvency issue. Unless something changes, its trust fund will be depleted in less than 10 years, at which time there will be no choice but to cut benefits. No one wants to see that happen.
According to an article by The Motley Fool, lawmakers have been looking for solutions, but many could end up being worse than benefit cuts themselves.
One option is to increase the Social Security tax, which is currently 12.4 percent split evenly between employers and employees. While that could bolster Social Security reserves, raising taxes could cause a host of other issues, such as price hikes and higher unemployment.
Another idea is to raise the full retirement age, that’s the age when older Americans can collect monthly Social Security benefits without a reduction. Full retirement age is currently 67 for anyone born in 1960 or later. The article points out that pushing it out to 69 “could help Social Security conserve resources and potentially avoid having to cut benefits.” However, depending upon the job, working until age 69 (or older) could cause serious health issues.
A Better Solvency Solution
The Seniors Trust believes the best option for saving Social Security is for Congress to enact the Social Security Expansion Act. This landmark bill buttresses the long-term solvency of Social Security by expanding benefits for seniors, not cutting them.
If passed, the Social Security Expansion Act will make four major changes to Social Security for retirees:
• Benefits will be increased for most recipients by about $200 per month.
• The Consumer Price Index for the Elderly (CPI-E) will be used to calculate Social Security Cost-of-Living Adjustments (COLAs) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account, particularly regarding the cost of healthcare, and offers a more realistic COLA for retirees.
• Increase minimum Social Security benefits to provide higher payments to seniors and greatly reduce senior poverty.
• Provide enhanced benefits would be set to greatly reduce senior poverty to guarantee the long-term solvency of the Social Security program.
