Securing Social Security

Yesterday, the Social Security trustees released their annual report. Though they announced the program will be able to pay full benefits through 2037 (and 75 percent of benefits through 2084), critics immediately tried to spin it as evidence of the program's failures. "The reports released today again sound the alarm that spending on Social Security and Medicare is on an unsustainable path," Republican Rep. Dave Camp said. While progressives are reluctant to privatize or support benefit cuts, protecting Social Security over the long term will require them to propose other solutions.

Yesterday, TAP caught up with Rep. Ted Deutch, a newly elected Democrat from Florida who has recently introduced legislation that creates a new measurement of inflation that more accurately reflects seniors' cost of living and guarantees a $250 dollar payment to Social Security recipients if there is no upward cost-of-living adjustment. Perhaps most controversial, it gradually makes the Social Security tax apply to all wages -- currently, any wages above $106,800 are exempted from taxation. While experts I spoke to suggest that this package would ensure long-term solvency, the political viability of the plan is a different question.

Republicans are arguing that Social Security is in danger. Should we be worried about running out of money?

There is a surplus of over $2.5 trillion. The best way to combat those who try to scare people into thinking that Social Security is in trouble is simply to lead them to the facts. The facts are that there is currently a huge surplus in a Social Security trust fund, that Social Security does not contribute to the deficit.

So what you are trying to fix with this bill? That surplus will be paid down as the baby boomers retire, and it's our responsibility to ensure solvency for the long term. At the same time, the other concern that we have to address is how to stop the assault on Social Security by those who oppose it altogether: those who wish to slash benefits and those who wish to raise the retirement age in ways that will also result in payments being cut. More than anything else, this is a program that has always been popular, always been appreciated. Fundamentally, the purpose of this legislation is to ensure that we continue to view the program that way.

How does your bill accomplish those goals?

First of all, the bill does a few things that I hear about on a regular basis back in the District. Because of the way the [Consumer Price Index] is measured currently, [there was] no cost-of-living adjustment last year. It looks as if it will be the case again this year, [so the bill] creates a price index for senior consumers and directs the Social Security Administration to use it to determine cost-of-living adjustments for people 62 and up. The things that seniors spend their money on, particularly prescription drugs and health care, have become much more expensive.

How does lifting the cap on taxable wages come into play?

Most people aren't aware that there's a cap on income to their Social Security taxes as it is. The cap that's in place now is indexed [to] inflation, it's not indexed to wages, so even as there's been this significant increase in income inequality over the past couple of decades -- wages for the middle class have stagnated -- and yet the cap, as a result, only applies to less than 85 percent of wages earned, which is the lowest it's been in 30 years. This proposal is consistent with the spirit of Social Security, rectifying a disparity that's come to exist over the past couple of years. Ninety-five percent of the people in our country [already] pay Social Security tax on 100 percent of their income. The bill provides both contribution and benefit fairness: Even as people are going to be paying in more, they're going to receive more benefits. Doing that, by the way, will also ensure the solvency of Social Security, which is terribly important.

Even with the adjustments to make the cost-of-living measurements more accurate, the bill would require $250 payments to seniors when benefits aren't increased. While this made sense as stimulus last year, can't you foresee a time when this payout wouldn't be necessary, if, say, costs had not risen?

At some point, when health-care costs are more under control, I suppose this might be the case, but in such an instance, the real concern is that in a time of economic downturn, we want to ensure that seniors are able to contribute to the economy, and that's where that onetime payment is going to be most important.

Why bring up this bill now?

One, I told the seniors that I represent during my campaign earlier this year that I was going to come to Congress and make it a priority to stand up for their needs. That's what the CPI-E and the $250 payment address. Beyond that, with Social Security back on the front pages again, it's important that we recognize that Social Security is something that we Democrats have defended every year against Republican attacks, and fought every effort to privatize, and it's important to actually go on the offensive. This is something that will I hope contribute to the debate that so often starts with the understanding that the only way to fix Social Security is by raising the retirement age or cutting benefits. When you look at the Republican plan, the Ryan plan, which increases taxes on the middle class and raises the retirement age and moves toward privatization, I think we need to go on the offense to preserve a program that has worked for so many [and] does not contribute to the deficit at all.

This is a bill that raises taxes and benefits -- how do you build a political coalition around that?

I think there is a coalition that exists out there, that wants to preserve Social Security. We're phasing out the cap over a period of years; even as we're doing that, we're also moving to increase benefits, and we're going to be creating a system that is going to ensure solvency for the long haul. What's unfortunate in so much of this debate is again this assumption that somehow Social Security is contributing to the deficit -- that's not at all the case. In terms of my colleagues on the Hill, look, there is a real commitment, certainly on our side of the aisle, to ensuring that we never permit the privatization of Social Security and that we not cut benefits, and that's exactly what the Republican plan does. This is a way to prevent that from happening.

Comments

In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program. The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs. While it might sometimes seem as though Social Security benefits do not amount to very much and the program might run aground at any time, don't despair. There are a few little-known Social Security benefits and factoids that can make the most cautious customer happy. The only way to discover them is by doing the research yourself, and not waiting for Social Security Administration to expose useful info. Little-known Social Security benefits and tips. In an effort to save time and cut costs, Social Security employees generally don't give case-specific advice. So that means you are on your own to make the most important financial decision of a lifetime. You have to read the rules and do the research yourself.

The privatization of Social Security would create a lot of problems and we must take care this would not happen. We need an efficiently and reliably social security, in this way we could create a system that is going to ensure solvency for the long haul.

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