• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • From Sen. Hutchinson, Another Chance to Save Social Security

    While the national debt continues its climb above $14.3 trillion, the day is fast approaching when Congress will, once again, vote to increase the debt limit. This brings new urgency to the need to rein in Washington’s out-of-control spending binge. Since entitlement programs (Medicare, Medicaid, and Social Security) are the largest sources of deficit spending moving into future decades, they must be at the center of any solution.

    Social Security in particular is in big trouble. Americans pay into this program and rely on it for income security during retirement. But Social Security is already running deficits and will continue to do so permanently. By 2036, the program’s trust fund will be completely exhausted, at which point retirees will experience an automatic, across-the-board benefit cut of 23 percent. That’s $271 per month in today’s dollars. To fund the benefits seniors have been promised for the next 75 years, Washington would need to come up with $6.5 trillion in additional revenue.

    To address this shortfall, Senator Kay Bailey Hutchinson (R–TX) has introduced legislation that would preserve Social Security for Americans entering retirement this century. Under the Defend and Save Social Security Act, current recipients and those preparing to enter retirement (ages 58 and above) would be unaffected. For younger generations, the proposal would gradually raise both the normal and early retirement ages. It would reduce the annual cost of living adjustment by 1 percent, which would work out to approximately $11 a month. This would be significantly less painful than the $271 reduction seniors face if nothing is done.

    Senator Hutchinson’s proposal would eliminate the entire Social Security shortfall, preserving the program for today’s seniors, their children, and their grandchildren. The plan would give those already in and nearing retirement peace of mind that the benefits they depended on when planning for retirement would continue to be there, and it gives younger generations time to prepare for the changes.

    As part of our “Saving the American Dream” proposal, The Heritage Foundation has offered our own plan to strengthen and preserve Social Security. Our plan would transform Social Security into true social insurance, ensuring that no senior fell below the poverty line (which the current system fails to do), while reducing the checks the government cuts to those with higher incomes and eliminating benefits altogether for the very affluent. The Heritage plan would increase benefits according to wage growth and, like Senator Hutchinson’s proposal, would raise the eligibility age. Paired with other reforms that encourage individuals to save for retirement—including a complete restructuring of the tax code—these reforms would reverse the pending entitlement crisis, lifting the burden on taxpayers and strengthening the programs for beneficiaries.

    Posted in Economics [slideshow_deploy]

    8 Responses to From Sen. Hutchinson, Another Chance to Save Social Security

    1. Redfray says:

      The real nighmare is those people running our government, which includes all the senators, representatives, judges, people appointed, and of course the wonderful presidents we have had. None of then want to obey the laws they have written. They have used the Social Security money for other than retirement. They have taxed social security moneies and limited the senior citizens to a land of poverty. These citizens worked hard to keep our country strong and our government has kept it weak. The government needs to stop stealing our money and destroying our country. Put some of the money sent to foreign countries into social security to stengthen our country. These hard working senior citizens help the government turn America into the imperialist country hated by other countries.

      • jackie says:

        Youre absolutely RIGHT. Like the old saying goes, charity begins at home. When the US is borrowing 41 cents of every dollar it spends, what are they doing sending money to other countries?

    2. KRS_Atlanta says:

      Here's a different proposal: LET ME OPT OUT of SS. Keep what I've put in over the past 28 years, and require me to invest an amount equal to the FICA tax. It's that simple. Let anyone over 40 years old opt out, and require them to invest the same dollars as the FICA tax in an IRA.

      There. 1/3 of a page of legislation to save social security.

    3. KRS_Atlanta says:

      Here's a different proposal: LET ME OPT OUT of SS. Keep what I've put in over the past 28 years, and require me to invest an amount equal to the FICA tax. It's that simple. Let anyone over 40 years old opt out, and require them to invest the same dollars as the FICA tax in an IRA.

      There. 1/3 of a page of legislation to save social security.

    4. Alexander Shoki says:

      The solution to the Socialist Security program is to raise the retirement age 98. That way the god of government can still continue to steal our money and pay the politicians a cushy retirement like it was originally set up. Socialist Security was originally set up so most people would die before getting anything, by changing the age they would be true to their original intent to screw the Sheeple.

      All jokes aside, take away the retirement program of the politicians and you would probably make SS solvent.

    5. Lewis says:

      Welfare organizations like LaRaza have fanangled Social Security into being some kind of welfare for children. Now, stepchildren and adopted children are included for SSD. Of course, this is being gamed. Who doesn't know someone with two good arms and two good legs receiving SSD? Also, the spousal benefit needs to be grandfathered. It is unfair to single women and gay people.

    6. Howard Bouchard says:

      Calling Soc Security an entitlement program is a misnomer. Those were real dollars I was forced to pay under the pretext that the government was a better steward of my money than I could ever be on my own. That 7% +/- payroll tax I paid and the additional 7% +/- to the employer made it more difficult to save anything privately or in a pension for either me or the employer. The miserly benefits promised could easily have been met by a grade schooler investing the Social Security funds in US Savings Bonds. Since the politicians have basically created a situation similar to a homeowner awash in debt and in need of refinancing, their solution is a refinance of sorts by rolling Medicare funds into the New Health Care package and through new health care taxes for all arriving in 2014.

    7. Howard Bouchard says:

      Social Security could easily be “saved “by slightly increasing the income ceiling after which the payroll tax currently ends, now at $107000, and or increasing payroll contributions slightly to say 15% total and equally split by employee and employer. Any funding for other plans or COLA payments for all other Federal Retirement plans should cease until Social Security is deemed solvent. So quit saying its unsustainable and some sort of untitlement plan when it is not.
      Otherwise, give me my money back with at least the historical US Savings Bonds interest rate paid over the period for which I paid into the fund. I would be happy to opt out given the proper return of my money with interest.

    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.