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The March 26 column by Verna Caruso highlighted the importance of the Social Security program. This is a program that has become a crucial element in our society, providing financial assistance to retirees, disabled individuals and survivors of deceased workers.
However, the viability and survivability of the Social Security Program has become an increasing concern due to various economic, demographic factors and the abandonment by both political parties of the long available remedies that would ensure its survivability.
While the program is currently challenged by economic and political ideological factors, the most important factor has been the lack of will of the political class of either party to provide long-lasting and readily available solutions. It is time to seek a bipartisan, non-ideological solution, instead of blaming one or others.
To address the challenges, it is essential to consider a range of remedies that can help secure social security for future generations.
The Committee for a Responsible Federal Budget, a bi-partisan think tank, recently made some recommendations. I will provide a summary of the recommendations:
• Promote delayed retirement and productive aging. As life expectancy continues to rise extending the retirement age makes sense, particularly, as we face manpower restrictions and the soon available Artificial Intelligence that will make work more physically bearable. We must reward workers at all ages by counting all years of work toward benefits and by calculating benefits based on each year's earnings rather than average 35-year lifetime earnings.
• Raise the Taxable Maximum. Currently, the payroll tax (and benefit calculation) applies to a worker's first $132,900 of wages. While that taxable maximum grows with wage growth, it has eroded over time relative to total wages. A quarter-century ago, roughly 90 percent of total wages in the economy were subject to the taxable maximum, compared to 83 percent today. Policymakers should increase the taxable maximum. Social Security taxes should be extended to all income. Since investment income has become a larger portion of total income, also consider applying taxes to investment income (perhaps exempting pension plans and 401K plans)
• Adopt an Accurate Measure of Inflation. Social Security beneficiaries receive annual cost-of living adjustments (COLAs) so that their benefits keep pace with inflation. However, benefits are indexed using a flawed measure of inflation that overstates the price growth that both workers and seniors face. Recently, policymakers adopted a more accurate measure known as chained CPI to index provisions in the tax code.
• Improve Auxiliary Benefits to Reward Work - A second earner can currently collect half of their spouse's benefits, regardless of the second earner's earnings history. As a result, the reward for work is low and the implicit tax rate is high for lower-earning spouses or spouses with intermittent work history (for example, if they took time off to provide childcare). The current 21 spousal benefit is also regressive, rewarding wealthy single-earner households relative to two earner households. To better reward work for second earners, policymakers should consider reducing the spousal benefit to 33 percent of the primary benefit - at least for higher earners. Some of the savings from this policy could be used to enhance widow(er)s benefits or to offer 'drop-out years' for care of a young child, which could further improve work incentives.
Securing SS for our current beneficiaries and future generations requires a non-partisan, non-ideological approach, laser focused on the well know multifaceted solutions proposed in the past. Ensuring the viability of Social Security is not only a matter of financial stability, but also a commitment to the maintenance of dignity and independence as we age, and also a commitment to social justice and intergenerational equity.
By taking proactive steps now, we can ensure a brighter and more secure present and future for all.
RENE R. RIGAL, MD
Williamsport
Submitted by email