LETTER: U.S. Senate candidate: How to save Social Security
Social Security is a lifeline. It keeps millions of senior Americans alive and out of poverty.
When President Roosevelt signed the Social Security Act in 1935, it was a promise, a sacred pact, that as long as hardworking Americans contributed to the trust fund they would be guaranteed a stable income into old age.
Unfortunately, Social Security is endangered. The Republican Party has dedicated itself to imperiling this program. If successful, millions will be left adrift.
The cynical, if not sinister, aspect of this deconstruction is that it is being paraded under the banner of “saving” Social Security. Citing increased life expectancy, Republicans tout a “fair and commonsense” approach to improving the program’s finances through longevity indexing. Let me be clear, longevity indexing is just a fancy term for raising the full retirement age to 68 or beyond. They argue that because Americans are living longer, it means that they are also drawing Social Security benefits for longer.
However, only some Americans are living longer.
Longevity is increasing among the top-earning workers, but the mortality differential between high-earning and low-earning individuals is growing. Gains in life expectancy for those with the lowest career incomes have been negligible or have seen no improvement at all. Of men born in 1940, those in the top 10 percent of income earners live a decade longer than men in the bottom 10 percent.
Raising the retirement age will reduce the benefits paid to working families while those at the top stand to reap the difference.
Increasing the retirement age for everyone because well-off Americans are living longer is patently unjust, and Americans know this. A 2012 Pew poll found that 56 percent of Americans oppose even a gradual increase in the Social Security retirement age, and a 2014 study performed by the National Academy of Social Insurance found that 75 percent of Americans opposed raising the retirement age to 70.
Any changes to keep Social Security solvent must ensure workers with low lifetime wages continue to receive a decent pension.
Fortunately, raising the retirement age isn’t the only solution. There are several alternatives that would bridge the shortfall:
• Recalculate the Cost of Living Allowance to account for inflation and the higher health expenses incurred by seniors
• Maintain a guaranteed cost-of-living raise that exceeds inflation
• Consider a minimum benefit payment
• Increase the Social Security tax rate from 6.2 to 7.2 percent over 20 years and
• Eliminate the earnings cap.
The problem is that Social Security taxes on income are capped, with earnings above $118,500 being exempt. This translates to more than $2 trillion that is not contributing to Social Security.
Lifting the earnings cap and taxing all earnings would do far more to keep Social Security solvent than raising the retirement age. According to a 2010 Congressional Budget Office study, eliminating the earnings cap would raise about twice as much money for Social Security as raising the retirement age to 70. Eliminating the earnings cap will save Social Security, and the 94 percent of Americans who make less than $118,500 annually would not see their taxes increase.
Unfortunately, this common-sense solution has gained the least traction in Congress.
By eliminating the cap, highest-income earners would pay the Social Security tax on all of their earnings throughout the year, like everyone else does, and in exchange, they would get a modest increase in benefits. But the top 4 percent of wage earners balk at paying their fair share.
Most average Americans say they would rather pay more than see reductions in Social Security benefits. This is a solution for working families.
This is the solution we deserve.
Kerri Evelyn Harris
Democratic candidate for U.S. Senate