Saving Social Security
Social Security has become a hot-button issue as we begin to address the many entitlement programs that are behind much of this country’s overwhelming debt. I’m sure many of you have heard the dire straits the Social Security Trust Fund is in and are starting to realize that Social Security is in trouble. So why is that happening?
First, advances in science and the health care industry have resulted in an extended life for most Americans. In 1935, the year the Social Security Act was signed into law, the average life expectancy in America was 61.7 years. So, that means the average American has already passed away by the time they were eligible for retirement benefits under Social Security. As of 2010, the average life expectancy in America was 78.7 years. That means that Social Security is now expected to pay the average American retirement benefits for 16.7 years – up from negative 0.3 years in 1935.
As life expectancies reached their highest this country has ever seen – almost 17 years longer than the drafters of the Social Security Act expected – the Baby Boomers, the largest generation our country has ever seen, started retiring. So now, this trust fund that was expected not to pay the average American a single cent expected to pay nearly 80 million retiring Americans for almost 17 years. While our children and grandchildren are currently working hard to fill the Social Security Trust Fund coffers, we can all see this is a feat that we can’t possibly expect of them.
So what does that mean?
It means that starting in 2017, Social Security will pay out more than it collects and that beginning in 2036 Social Security will only be able to pay out 75 percent of its benefits. And these numbers are getting worse. In fact, many experts believe when the Social Security trustees release their annual report this spring, the depletion date of 2036 may be moved up several years.
Clearly, we need to make some adjustments to the way we handle Social Security if we want to save it. Not necessarily for the Baby Boomers – but for their children and grandchildren. Don’t they deserve the same benefits we will have? Just like us, they have paid over 12.4% of their earnings into the Social Security Trust Fund and are also relying upon it.
So how do we save Social Security?
I want to start this discussion by letting you know what I cannot support. I cannot support raising taxes nor can I support cutting the benefits. Many seniors rely on their Social Security checks and they should not see their benefits cut nor should current workers be forced to pay even more taxes to the federal government.
However, we are going to have to make some changes to Social Security in order to save it. One of those changes I can support would be to raise the retirement age for those Americans currently under the age of 55 years old from 62 years old to 65 years old. This would not affect anyone currently receiving Social Security, nor would it affect anyone within seven years of retirement. As I said earlier, when Social Security was initially created, it was expected that the majority of Americans would not receive a single cent from Social Security because the average life expectancy was lower than the ‘retirement’ age. As our life expectancy continues to climb it will mean, unfortunately, that many of us will have to work a little longer than the generations before us.
I also support allowing the investment of Social Security money in the private market in order to raise the rate of return for workers. Private capital markets have always yielded a much higher return than Social Security, and if we allow people to invest in personal accounts, it will bring more revenue to the Trust Fund.
As we work to save Social Security for future generations, the discussions on this topic will continue. I encourage you to please contact my office with any questions you have. During the debate in 2011, there were those on both sides of the aisle who use the media to spread inaccurate statements – for example that House Republicans wanted to end Social Security as you know it. That is absolutely not the case. If you have further questions about this issue, you can contact Stephanie Newton in my Washington DC office at 202-225-5901 or email me.
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