One simple step to keep Social Security strong
By Alex Stone
The recent release of the Social Security Trustees’ report in late April shows our Social Security program remains on sound financial footing for at least another generation.
The report also puts to rest the misconception that Social Security is in crisis. It is not. With $2.7 trillion in its trust fund, Social Security will pay full benefits through 2033.
After 2033, Social Security can still pay 75% of benefits, even with no action by Congress. And because of how Social Security calculates benefits, that “75%” of benefits in 2033 will be about the same (in inflation-adjusted dollars) as benefits today.
But we can, and should, do better than that.
Under the “Scrap the Cap” plan, Social Security can pay 100% of benefits after 2033, and even modestly expand benefits today, Congress need only make one simple change: eliminate Social Security’s cap on taxable income (now set at $110,100) so that high income earners pay the same tax rate as middle class workers.
If everyone paid the same rate for the same guarantee, our Social Security system would not only have stable financing far into the future.
The additional funding could boost benefits for low-income earners, add credits for individuals (most often women) who take time from work to raise their family, and restore college student benefits that were cut in the 1980’s – all while maintaining the historic link between contributions and benefits.
Scrapping the cap is the only solution that would both improve benefits now, and keep Social Security strong for future generations.
Scrap the cap!
(Alex Stone is Communication Manager for the Economic Opportunity Institute and a PSARA member.)