New York Times. It is an intelligent and important statement on Social Security, and its importance in the 2016 election -- and it should be read by as many people as possible (which is why I reposted it).
This election season offers an opportunity to reframe the debate over Social Security. It is necessary, of course, to ensure the program’s long-term health beyond 2034, when the system is projected to come up short. But this can’t be done by broadly cutting benefits. In fact, there’s mounting evidence that Social Security, which has become ever more important in retirement, needs to be expanded.
Currently, 36 percent of retirees rely on Social Security for 90 percent or more of their income; over all, 65 percent of retirees rely on it for more than half of their income. The average monthly benefit hovers around $1,300. Retirement security won’t be any better for those now in their 50s. The Government Accountability Office recently found that 52 percent of American households with someone 55 or older have nothing saved for retirement and that only half of that 52 percent will get anything from a company pension. For those ages 55 to 64 with retirement savings, the median amount is barely in the six figures.
Younger workers are arguably worse off, because saving has become increasingly difficult, or impossible, in the face of stagnating wages, high debt, high rents and the lack of employer-provided retirement benefits. In 2013, 44 percent of workers on the lower half of the income scale had a retirement plan at work, down from 54 percent in 1995, according to datafrom the Federal Reserve.
Despite these facts, nearly all Republican candidates have called for cuts to Social Security benefits.
Jeb Bush, Chris Christie, Ted Cruz and Marco Rubio all favor cutting benefits by delaying the age for full benefits; the retirement age is already set to rise to 67 for people born in 1960 or later. They say a higher retirement age is needed to keep up with longer lives. But data show that life expectancy is growing faster among the wealthy than among the poor, and poor women are seeing life expectancy decline. So raising the retirement age across the board would hit lower-income workers the hardest.
Mr. Bush, Mr. Christie and Mr. Cruz have also endorsed reducing future cost-of-living adjustments in Social Security, even though there is no compelling evidence that the current adjustment is too high.
Mr. Bush and Mr. Cruz have said that Social Security payroll taxes should be diverted into new private accounts for employees, a reprise of President George W. Bush’s failed privatization attempt in 2005. Private accounts do not enhance retirement security. They divert money that would otherwise finance Social Security to Wall Street and shift the risk from government to individuals.
Donald Trump opposes benefit cuts, including a higher retirement age, but he has offered no meaningful ideas for reform.
The Democratic candidates have played defense and offense. They have opposed benefit cuts and privatization. They have proposed increasing the system’s revenues by raising the ceiling on the amount of wages, currently $118,500, that are subject to payroll taxes. That reform is overdue. If the wage ceiling had kept pace with the income gains of high earners over the decades, it would be about $250,000 today.
More important, they have stressed that an aim of reform is to bolster the system, not shrink it. Hillary Clinton would raise benefits for widows and for retirees who had long absences from the work force to care for relatives. Bernie Sanders and Martin O’Malley would increase benefits more broadly, especially for low-income recipients.
Ultimately, strengthening Social Security requires a growing and healthy economy. The Democratic candidates have credible ideas for creating jobs and raising wages that would revitalize the tax base for Social Security. Those and other sensible fixes, not deep and broad cutbacks, will ensure that the system continues to provide a basic level of guaranteed retirement income for all workers.