Social Security Advocates Warn Against Cuts

In a briefing held Friday by the National Academy of Social Insurance (NASI), Social Security advocates said cuttning seniors’ benefits to pay down the nation’s deficit would be highly destructive for current Social Security recipients and future beneficiaries.

Recently, lawmakers have suggested reforming America’s Social Security plan out of concern that it will run out of money by 2036.

Wilhelmina Leigh, Senior Research Associate at the Joint Center for Political and Economic Studies, pointed to the deficit reduction plan co-authored last year by Erskine Bowles and Alan Simpson.

Under the proposal, the full-benefit retirement age would be increased beyond 67, the cost-of-living adjustment would be lowered for current and future beneficiaries and the formula for calculating benefits would be heavily altered.

Leigh said the proposal “will close the shortfall by cutting benefits.”

NASI officials argued that the Bowles-Simpson plan would reduce benefits for 92 percent of seniors by 2070.

To help portray the effect of such a proposal on future retirees, participants of the briefing presented micro-simulation models developed by the Social Security Administration that depict how the plan would impose large cuts by 2070 for one in three women and one in two men, one in four black and Hispanic seniors, half of all white seniors and 45 percent of all middle-income seniors.

“Cutting from these modest, average levels for any group could make it very difficult for people to continue to exist,” Leigh said.

Additionally, the Bowles-Simpson plan would raise revenues by gradually lifting the cap on earnings taxed for Social Security.

“The question for all of us is how to craft a Social Security program for the future that is both well-financed and provides adequate retirement security for the children and grandchildren of today’s retirees,” said NASI President Janice Gregory.

In related news, a new survery released Thursday shows that a majority of younger Americans do not believe that government-run Social Security will be around for them when they reach retirement.

According to the poll, conducted by the group, Generation Opportunity, 66 percent of adults ages 18-29 indicated that they believe their Social Security money is safer under their pillows than in the US Treasury.

“Young people…are simply looking for competent leadership that respects their interests and places a higher value on unleashing America’s economic engine to more create jobs and economic opportunity,” said Paul T. Conway, President of Generation Opportunity and a former Chief of Staff for the United States Department of Labor.

Increasing Payroll Taxes Would Preserve Social Security, Say Dems

A group of four Democrats partnered on Wednesday to unveil legislation aimed at protecting Social Security benefits for America’s seniors.

Republicans have lately been citing government reports showing that the popular entitlement could run out of money by 2038, and most of the GOP candidates for President have embraced the idea of restructuring the program for younger Americans. Some Democrats, however, have argued that drastically reforming the program is a bad idea.

“Despite a lot of right wing rhetoric to the contrary, Social Security is not going broke and has not contributed one penny to our serious deficit problem,” said Sen. Bernie Sanders (I-Vt.)

(Click here to see photos from today’s press conference)

Currently, Social Security is funded through payroll taxes paid by employers and employees. The cap on annual income subject to the tax is $106,800. According to the Social Security Administration, the program currently has a $2.5 trillion surplus and the Congressional Budget Office has reported that it can pay out every benefit to every eligible American for the next 27 years.

The Keeping Our Social Security Promises Act, proposed by Sanders, Rep. Peter DeFazio (D-Ore.) and Sens. Barbara Boxer (D-Calif.) and Sheldon Whitehouse (D-R.I.) would strengthen Social Security’s coffers by applying the tax to any income generated over $250,000 per year. The concept, as noted by Sanders, was advocated for by President Obama back in 2008, who called for raising the payroll tax on wealthy Americans.

“This is a simple fix. It solves the whole problem in a way that should be embraced by everyone,” Boxer said.

Tension arose when a reporter asked the lawmakers to weigh in on President Obama’s recent proposal in the American Jobs Act to extend the payroll tax cut for another year.

“Do I think the middle class deserve a tax break in the midst of this horrendous recession?” Sanders asked. “I d, but I would very much prefer it not come from continuing the cuts that we’re seeing in the payroll taxing.”

Boxer, however, was adamant that the payroll tax cut bill has legislation built within it to restore funds. 

Yet as Boxer was defending the payroll tax cut, DeFazio was shaking his head in rejection of her claim that the funds would be restored.

“No more tax cuts,” Defazio declared angrily. “We have the economy that tax cuts will give us and it is pretty pathetic, isn’t it?”

Obama’s proposed extension of the payroll tax cut holiday has received criticism from both sides of the aisle.

Republicans Blast President For Igniting Social Security Scare

Vanessa Remmers and Alex Harris

Republicans from both chambers banded together Thursday to argue something out of the ordinary in light of recent debt negotiations: there is plenty of money.

At least for social security.

Republican Senators and Representatives both condemned President Barack Obama for implying that seniors may not receive their social security checks if lawmakers fail to raise the debt ceiling.

“ I think the President should apologize for politicizing Social Security,” Sen. Rand Paul (R-Ky.) said during a briefing with fellow GOP Senators. “It’s objectively false to say there wouldn’t be enough money.”

Paul noted that the government receives $200 billion monthly, while social security expenses are in the range of $60-80 billion.

“There’s plenty of revenue to pay all of the social security checks, to pay all of the interest,” Paul said.

During a separate briefing, Rep. Phil Roe (R-Tenn.) blasted the President’s stance on social security as a scare tactic.

“There is no reason for Obama to be scaring our senior citizens,” Roe said.

Kay Bailey Hutchinson Calls For Gradual Social Security Reform

Sen. Kay Bailey Hutchinson (R-Texas) introduced legislation Thursday that she claimed would gradually reform the social security system.

In a press conference, Hutchinson put outlined a plan to increase the retirement age by three months starting in 2016 until 2023, where it would be capped at 69.

In addition, Hutchison wants to reduce the Cost of Living Adjustment by one percent annually.  

Hutchison said that the Social Security Administration’s Chief Actuary projected that her plan would decrease the national debt by $7.2 trillion by 2085, and decrease the deficit by $416 billion over the next ten years.

The Texas Republican argued that the plan should be included in debt limit negotiations since it will ultimately make such a large economic impact. 

“I think it should be part of the debt ceiling because $440 billion over ten years is not chump change,” Hutchinson explained.

Hutchinson said that the plan, entitled Defend and Save Social Security, would keep the entitlement program solvent for an additional 50 years.

Retirement Age Would Jump To 70 Under New GOP Social Security Measure

By Anna Cameron

Republican Senators Lindsey Graham (R-S.C.), Rand Paul (R-Ky.), and Mike Lee (R-Utah.) unveiled their substantive plan to reform Social Security Wednesday, a proposal that would raise the retirement age to 70 by 2032.

“Without question, Social Security is broken,” said Sen. Paul. “If we do nothing, entitlements and interest will crowd out all spending and will occupy the entire budget within a little more than a decade.”

The plan is structured to reduce publicly held debt by $6.2 trillion by 2085, eliminate the current discrepancy between benefits promised and benefits delivered, and create a “solvent and sustainable” system that is fully functioning without an increase in taxes.

However, according to the Senators’ proposition, such accomplishments will require sacrifice.

Based on this, the Graham, Paul, and Lee initiative proposes a gradual increase in the retirement age, which would reach 70 years in 2032. The plan also incorporates means testing into benefit distribution.

“If we’ll adjust the age to 70, and act today and not wait another five years, we can protect more Americans than if we wait,” said Graham. “If we do what Harry Reid suggested - ‘call me in twenty years’ - you’re going to have to put the retirement age far beyond 70, and you’re going to have to start means testing benefits for people who make less than $43, 000.”

According to the Social Security Trustees’ report, the program is expected to start permanently paying out more than it takes in by 2015. Experts also project complete trust fund exhaustion by 2037.

President Obama is expected to address the public on his plan for deficit reduction Wednesday afternoon. Sen. Graham called on the president directly, applauding him for re-engaging in talks over entitlement reform, and urging him to put such reform on the table.

“If the President today will put entitlement reform on the table, we intend to work with him … because Social Security is a meaningful program that’s going to fail if we do nothing,” Graham said.