• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Commission Should Focus on Bipartisan Solutions to Social Security Reform

    Serious doubts surround President Obama’s National Commission on Fiscal Responsibility and Reform, which has been tasked to make recommendations to Congress to reduce the federal deficit. Many fear that the commission will recommend the creation of a value-added tax (VAT) or similar tax increases to pay for Washington’s reckless spending. Then there is the possibility that the commission will produce nothing, succeeding only at prolonging any real action to put the nation’s fiscal house back in order.

    But as The Weekly Standard’s executive editor Fred Barnes points out in the Wall Street Journal, “there’s another possibility, one that would redound to the commission’s credit.” The commission could propose cost-containing reforms to unaffordable government programs. Barnes suggests that the likelihood of the commission exploring bipartisan solutions to Social Security spending in particular is not zilch.

    Social Security reform is desperately needed if the program is to exist intact for future generations. This year Social Security is running its first deficits since 1983, and though economic recovery is expected to raise revenues higher and put it back into the black for a just few years, the program will be running permanent deficits from 2016 on.

    According to Barnes, the odds of cementing bipartisan support for Social Security reform are promising. He writes that, “One reform that could win bipartisan support would, over time, raise the Social Security retirement age to 70. … A second reform, bolder and more controversial, would means-test Social Security, gradually slowing the growth of benefits for the more affluent but sparing those with lower incomes.”

    The second of these ideas is exemplified by the Pozen plan, which would apply “progressive indexing” to Social Security such that benefits would gradually shift to provide more aid to those who need them.

    Heritage expert David John writes: “Progressive indexation preserves the principle of social insurance for workers of every income level. All workers who are currently in Social Security would continue to pay in and continue to receive traditional retirement benefits. … But while the wealthy would continue to receive traditional benefits—a minor supplement, no doubt, to their investment income—in return for their taxes, their monthly benefits would not grow as fast as under current law. These savings on checks to affluent retirees would enable Social Security to pay better benefits to lower-income retirees whose need is greater.”

    Barnes reiterates, “No one, not even those with high wages in the years on which their Social Security benefits are calculated, would face an actual reduction. Under the Pozen plan, higher income workers would have increases in their benefits based on inflation, while those with low incomes would continue to have theirs based on the more generous index of wages. The great attraction of the Pozen plan is that it would erase more than two-thirds of Social Security’s long-term shortfall of $4 trillion.”

    Proposals such as these would put federal programs on sustainable footing without tax hikes that would hurt the economy and do nothing to permanently address out-of-control federal spending. The commission would do well to follow Barnes’s logic.

    Posted in Economics [slideshow_deploy]

    5 Responses to Commission Should Focus on Bipartisan Solutions to Social Security Reform

    1. Mike ONeal says:

      Please stop calling Social Security an entitlement program…If I must pay into a program to receive a return than it is not and entitlement… entitlement programs are like welfare and parity for framers things that people (citizens) have given themselves without putting anything into the system. This is not so for SS..just because it has been systematically robbed for decades and is now broke and must call its IOU's in from the Feds, does not make it and entitlement..We have all loaned money to a friend and at some point ask for it back.

    2. Pingback: » Financial News Update – 07/13/2010 NoisyRoom.net: The Progressive Hunter

    3. James A - Longdrycre says:

      It will never happen but the elected should give up half of their salary, pay SS taxes, no longer have multiple staff members, and be given per diem payments for junkets and trips home. Take Nancy's jet away from here and park it.

      Limit Obama's trips overseas or domestically. Cut the number of SS agents.

      Rid the WH of Michelle's 22 ladies or maids in waiting [staff].

      Cut the WH presidential staff to 25 workers. Fire all of the czars and their staffs and close their offices. Sell the equipment.

      Let Michelle cook the meals, gather from the garden patch, and perhaps get a cow for milk. Run some chickens on the law: fertilizer and eggs. Get a rooster for fertilizer eggs and show the children at Easter where the eggs come from

      Park the limos for Barry and staff. Walk for exercise.

      Park the Marine Band, excellent musicians, but send them on tour of America. We need to listen to stirring music too.

      Close the WH commun ications office. No one cares about propaganda.

      Free the press to ask penetrating questions of Obama.

      Put Joe Biden on skates and let him tour DC.

      Chain Hillary to her desk in State. She is too awkward wherever she goes. Too much drama from her.

      These would be for starts if I were in office. I could close Education, H&HS or redefine them, Energy, cut the IMF and World Bank off the public trough,

      Reduce the salary of all U.S. Government workers by half, because they are overpaid compared to the private sector, the one that makes and sells goods and services.

    4. James A - Longdrycre says:

      And the EPA would be only a research arm of the House and Senate. Nothing in the way of fines and enforcement.

      Remove the SWAT team concept from government at all levels. These hooded ones are merely for intimidation of the citizens, not as a law enforcement too.

    5. Pamela Masich says:

      If the government would have left the money alone for social security it would be there!! Our government is full of crooks! they no longer work for the people only for themselves, they all need to be voted out out out!!!!!

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.