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  • Morning Bell: 3 Simple Solutions for Fixing Social Security

    Later today the Republican-led House of Representatives will vote on “Plan B,” the latest unsatisfactory proposal put forward by Speaker John Boehner (R-OH) to avoid the fiscal cliff. Boehner’s plan would protect most Americans, except for millionaires, from a tax hike. But even this is a poor fix because it ignores the real problem: spending.

    While lawmakers from both parties squabble over tax rates, a fiscal crisis is looming on the horizon. Entitlement programs — Social Security and Medicare to be precise — have unfunded obligations of $48 trillion. By comparison, the fiscal cliff carries a price tag of roughly $650 billion. As lawmakers talk about another debt-limit increase, they need to think seriously about America’s long-term obligations.

    So what can our elected leaders do about it?

    The first step is recognizing the problem exists, which for some Democrats is mighty difficult. A story in Politico reveals that liberals are having “heartburn” and doing “some painful soul-searching” over a relatively simple fix to Social Security’s annual cost-of-living increases.

    Heritage’s David John, senior research fellow in retirement security and financial institutions, believes the time is ripe for a few Social Security fixes. Any fiscal cliff settlement, John writes in a new Heritage report, should address Social Security’s grim financial future.

    The Problem

    Over the next 75 years, Social Security will owe an estimated $11.3 trillion more in benefits than it will receive in payroll taxes. It has been running deficits since 2010, according to the Social Security Administration.

    To make up the difference, Social Security will need “massive annual injections of funding in addition to what the program receives from payroll taxes,” John writes. Don’t believe the liberal myth that Social Security is on solid financial footing. The numbers don’t lie. It’s very much part of the spending debate facing Washington.

    The longer Congress delays action, the harder it will be to solve the problem.

    The Solution

    There is already bipartisan support for two of the three ideas recommended by John. All three are simple fixes that should be included in any fiscal cliff deal.

    1) Fix the annual inflation adjustment. The current index used to determine Social Security’s yearly cost-of-living adjustment does an inferior job of measuring inflation. A better solution is a “chained” index, which more accurately measures inflation. This change would immediately result in savings for Social Security. And it’s easy to do — the new index can be implemented quickly and without complication.

    2) Increase the full retirement age. Americans are living longer thanks to advances in medicine. And yet Social Security has not kept pace. The important number here is the how much longer people who have reached age 65 will live. That number is trending upward, by nearly a year, according to recent government data. Congress should gradually increase the full benefits age to 68 and then index it to life expectancy in the future.

    3) Focus benefits on those who most need them. It’s time to return Social Security to one of its original purposes: protecting seniors who face economic hardship. In order to make Social Security a true insurance program, upper-income seniors would face reduced benefits or none at all. This would strengthen the program’s finances and prevent future tax hikes on younger workers.

    There’s more to do beyond these three solutions, but they would provide a solid foundation for future reforms. Heritage’s plan, Saving the American Dream, redesigns Social Security and other entitlement programs to guarantee assistance to those who need it — and keep the American dream alive for future generations.

    Read More:

    Three Social Security Fixes to Solve the Real Fiscal Crisis

    Saving the American Dream: Social Security

    Six Bipartisan Entitlement Reforms to Solve the Real Fiscal Crisis

    Quick Hits:

    • Actor Gerard Depardieu renounced his citizenship and is fleeing France for lower taxes in Belgium. France will have a 75 percent tax rate on millionaires beginning in January.
    • The U.S. Treasury will sell 40 percent of its remaining stake in General Motors, meaning taxpayers are likely to lose more than $13 billion as a result of the GM bailout.
    • The Republican leadership’s “Plan B” is getting a hostile reception from conservative groups, including Heritage Action for America.
    • CNN’s Piers Morgan said it was “shameful” that journalists didn’t ask more questions about gun control at President Obama’s press conference yesterday.
    • Former federal judge and Supreme Court nominee Robert Bork died yesterday. Heritage’s Paul Larkin, a former clerk, fondly remembers the conservative legal giant.
    Posted in Economics [slideshow_deploy]

    90 Responses to Morning Bell: 3 Simple Solutions for Fixing Social Security

    1. Turner says:

      Social Security is supposed to be an insurance policy. Insurance is one of those expenses you hate until you use it and it is one of those products you hope you never have to use, that keeps costs down. So, let's start treating SS like what it is supposed to be instead of treating it like a net that bails people out of responsibility in one's own life when they have the ability to act alive.

    2. Mike Casper says:

      I have paid into SS for many years. I am ENTITLED to my 'benefits' that I PAID for. Phooey on the reducing of my 'benefits'.

    3. I have a better idea…. the system is supposed to have kept track of who paid how much into the system. Check what has been paid out versus what they paid in so that no one can receive SS without having paid in (like many now going on SS). Also check to make sure that people currently receiving SS, make sure their outgoing payments have not gone over what they have paid in.
      For anyone age 50 or less, refund every person every penny they have paid into it to go into an untouchable retirement savings account with banks, IRAs, or other secured funds. This way, first the people get the money they paid in and no more when it comes time to start using it, second the government no longer has access to our money to use as part of their general fund spending, and third once a persons money runs out, they do what people throughout history have done, move in with their kids, nursing home or other means. social Security may have worked and been setup properly to start with but the corrupt government has completely messed it up and can no longer be trusted to handle our money in any way.

    4. Timpclimber says:

      These KISS solutions (keep it simple stupid) would be an excellent beginning but we need laws that prevent Congress or POTUS from being able to raid the fund as they have in the past. Then put all government employees on the system to make its solvency a prioity with law makers.

    5. Fred says:

      Regarding your SS fix. It is unfair to install means testing for benefits. People have have been forced to pay that money into the system with a promise to get it back. If they had not been coerced but allowed to invest on their own, their returns would be much larger, they would not be means tested to determine the benefit amount, the age to start drawing would not be delayed (in many cases after death) and people wouldn't have to wory about loosing it all together. Sounds like retro social engeneering to me.

      • FakingShock says:

        When SS was set up the average lifespan was 63. You could begin to collect benefits at 63. Today the average lifespan is 78.5 years, yet you can collect at 65. See the problem? The eligibility age should have kept up with the increase in lifespan. Today it should be at least 70 if not higher.

    6. TexasGal01 says:

      Why doesn't anyone address WELFARE entitlements as a place to cut spending?! With Social Security, the seniors have earned this money and gave it to the Government for safe-keeping (what a joke).
      WELFARE recipients have not and the systems works well for people who do not need or deserve it. Let's give welfare to those in true NEED……not the ones who have lots of babies and drive a Cadillac.

    7. Daryn Kent-Duncan says:

      I am incredibly tired of hearing of ideas for fixing entitlements. Entitlements are unconstitutional and only one solution makes sense: abolish all entitlements and the FDR/Lyndon Johnson welfare state by a reasonable phased-out program. No one, not the government, not anyone, has the right to take our money by force either to "put away for us" or to give to others, which is what these ponzi schemes amount to. We are each responsible for our own lives. Private charity will help those truly unable to help themselves. Get the government out of our lives and our pocket books. They do nothing but harm. The fact that these men were voted into office didn't give them omniscience or miraculous powers to guide our lives.

    8. Dennis says:

      So those of us who have worked hard our entire lives and paid into the system would then receive a reduced benefit, while those who have received government handouts would continue to receive the same benefits? So Social Security is just another way of redistributing wealth, take 14% of my total life's earnings and give them to someone else! Screw that!!

    9. John Albers says:

      Social Security was never intended for SSI or underage children of SS recipients or their younger spouses. Could you list the programs that SS covers besides the retirees who paid into it????

    10. charles schlagel says:

      Why doesn't congress just remove the ceiling upon which social security taxes are paid? Right now it's around $106K. Why should someone making multi-millions a year only have to pay SS taxes on the first $106K? That way they could probably lower the rate on everyone.

    11. Evelyn says:

      The members of Congress should be covered by Social Security so that the laws passed by Congress
      would apply to its members as well as everyone else. Nothing will be done unless our representatives feel
      the pain others feel.

    12. toledofan says:

      There is no leadership on either side of the aisle to cut spending. Let's face it if something was done it could have been done months ago. I just think that Obama and the Democrats in general want all the revenue they can get their hands on and this over the cliff debacle is just a smoke screen to cover the parties butts so one side can blame the other. Until there is some solid leadership in Washinton and the country wants to have a more defined future, nothing will change. The only plan the Democrats have is to spend baby spend and at the end of the day they don't care about anything else.

    13. They sold it as an insurance plan that you put that money in and you get it back when you retire. Why should I continue to be in this program if I am not going to get what I put in? I would rather take my chances and put the money where I want. Another Gov. program where they mismanage the funds that are not in a "lock Box".
      They should just scrub the whole thing for new workers and let them invest themselves.

    14. jeb Strickland says:

      These solutions will not do it. The index change is too little for so much confusion it would cause. The big change could be met by Increasing the retirement age to 74 for those just now age 19 and proportionately adjust retirement age for those up to age 55. From age 55 down to age 19 is 36 years. Adjust the retirement age by one quarter per year going backward from age 55. That way we will have the same life expectancy social security life expectancy target that folks had back when FDR put is in this mess.

    15. Richard T. says:

      OK, let's see if I have this right. The government has been robbing social security of its funds to use at its discretion. They stopped the payroll tax which funds social security. Now, they want to know why they have a problem. What happened to the effort to have social security funds put in a "lock box" so the House and Senate can't touch it?

      I'm OK with reducing social security for those of us that have worked hard to save our money and now are a little more secure that others. However, we don't know what things like "Obama Care" are going to do to all of us and would that mean that the same people that won't go out and try to get a job will get all of the social security money as well as food stamps and welfare? I believe we should help those who will try to help themselves.

    16. Katiemacny says:

      I'm a senior citizen and willing to do my share to save our country, so I can approve these changes. But I'm appalled that the first place we look are the only 2 plans where the recipients have actually contributed to the plans. What about Welfare, Medicaid, Food Stamps, Disability, unending Unemployment. These plans should be set up to help the recipients survive, NOT THRIVE. The fact that people recieving these benefits would take a pay cut if they went to work is a problem, there should never be a plan that encourages people to stay on it, and punishes the worker. The average Welfare recipient gets 168.00 a day in cash and benefits as opposed to the average worker who gets 137.00 and pays taxes on that. So why would you work. Please let's look at these Programs at the same time or before we deal with the other two.

    17. M. Nunes says:

      The first 2 suggestions make sense, but the third sounds like more liberal garbage. My money was paid in for insurance – that was the deal. When an insurance policy is canceled in the real world, the insuror has a duty to refund premiums. What would be fairer for Social Security would be for government to return that premium money (withholding and self-employment deposits) over life expectancy. No indexing, no extra benefits, just divide what's been paid by the number of months of life expectancy. if I die before time's up, then on to my heirs. Make it taxable if you want, but don't cheat me.
      It's time we hold government to the same standards of promises to which we hold private parties. No one should be above the law and that includes the Social Security Administration and the rest of the government.
      So what's the substitute solution? Offer flat rate one-time buyout of those premiums to those above the age where it actuarially looks like the long-term cost will mean a government loss. Tax the buyouts at capital gains rates and stop charging social security to those opting out and still earning so they do not come back into the system. Fund the buyout with special purpose bonds.
      But don't punish success with a government right to break its promises. Hold government accountable.

    18. Bob Lauer says:

      It would be a better fix for Social Security to not give any retirement benefits until a person reaches the age of 65 or 66 – no early retirement benefits at 62, for example. The other fix, although politically more difficult, is to eliminate social security disability payments. This program is grossly abused, has become the "new welfare", is draining social security system of resources and is not the original intent of social security. The full retirement age should not be increased beyond 66 or 67 because, even though people are living longer, they run low on energy and stamina at the same age they always did – it's a biological clock issue. Also, cost of living increases need to keep up with true inflation or else seniors of limited income are at risk. Even now cost of living increases are considerably less than true inflation.

    19. Jax says:

      Once again we have people that have never worked in consruction wanting to raise the retirement age.Look around you idiots.Do you want men 65 and older working on steel 50 stories? Do you want people 65 hanging drywall.A better idea,is to cut all foreign aid and put that money in the SS coffers.

    20. Bruce says:

      Social Security is not a safety net it is a ponzi scheme. I wish you would stop suggesting fixes to a scandal that tags citizens at birth with a number in order to steal their property all their lives.
      The entire idea that citizens should stop producing because they reach a certain age is a communist / socialist ideology. Yet you embrace it and look for ways to perpetuate it. Your solution is to tax the citizens all their lives then hope the majority dies off before they can collect. That is despotism not compassion.
      The government is not nor should it attempt to be a charitable organization. Individuals and private organizations helping those who truly are in need is where charity begins and ends. Those receiving the help have a sacred bond with those who are giving, government should not interfere with that bond.
      If citizens were left with the fruits of their labor a free people would rise up protecting those who face economic hardship through their communities, private organizations, churches and synagogues. I guess that would mean politicians would have less power to buy votes and control the citizenry. Who would want that?

    21. RFR says:

      All solutions are very good that you have suggested and the weak kneed Congress needs to act but they will not. Why? Because they are no longer representing the people their office has become their job and career so the only thing they care about is getting reelected. Where are the men and women who are their to be statesmen and do what is right with our Heritage? The times they vote themselves raises that are double and sometimes triple the median income of their districts and states they cease being concerned with the country they become two bit tin horn dictators. We do have a house of Lords in both chambers. The Speaker knows what is right but he wants "good" press and he wants he and his wife to attend the right social gatherings in DC. I am feed up with him and his so called "conservatives" who act like conservatives and then will not stand their ground when a major media figure sounds the mouth piece for Obama and the democrats and they run for cover with a plan B. To me the first act would be for them to roll back their pay to 1992 levels since that is where we have been taken back to with inflation. Second would be to enact a law that they can only serve two terms consecutively. Third all laws etc. applies to them and they must retire under Social security just like others and pay in to it. We will not "fix" Social Security till it effects the members of the ruling class!

      As far raising the retirement age I agree to 66 and then graduate that every 5 years as people live longer. I know of poor people who took their retirement at 62 not by force of lost job but because they looked at the same way welfare people look at their check and then they file for all sorts of help such as SNAP etc. I have no problem with for actual health reasons people have to go on SS but the health reasons should not be drug addicts, alcoholics, and others who abuse themselves where they cannot hold a job find a quack doctor to authorize disability and go on SS at early ages. That would stop some of the waste. And then it should be placed with an agency private type to invest at a rate of return like is required for private pension only over seen by the government to make sure it is being Madoffed.

    22. Bobbie says:

      To humble their ignorance, democrats can relearn what they refuse to acknowledge. America's purpose. Then they can relearn the intent of social security and face themselves the fault it's become. These are simple solutions that only someone contrary to solutions would be against. There should also be evaluation in the process and administration to eliminate the corruption and inside jobs feeding the able bodied with corrective actions to deter future mishaps. NO ONE but the elderly should be on social security. If democrats can't respect America's freedom and people and help out with the kindness of their hearts instead of stealing from other people to make it look like democrats really care, then they're not genuine or sincere people and undeserving in any roles of America's governing.

      Rich democrats are nothing but selfish, greedy hypocrites who uses paid time to spin their webs and attack their fellow American and because they only breath air regulations are put on everyone else as they protect their unearned and stolen wealth. Too bad their constituents can't see. So wrong for America to have to live with it!!

    23. will says:

      Really? Let's look at all the entitlements AND income taxes before we start talking about confiscating 12.4% of people's lifetime productivity for a Social Security they may not get anything out of. Prudent 35 year-olds would need to invest another 12.4% of their productivity to protect themselves in retirement. Medicare is already progressive and will need to be significantly more so to survive… meaning these same people will pay a lot more in and get a lot less out. Ditto for Obama Care and Medicaid. The tax increase we haggling over today will get us revenues close to the 50 year norm of around 18% of GDP, with spending at 22+% of GDP as far as the eye can see. Let's not tap out the producers on one failed program until we have a plan for the other failed programs.

    24. Gerry Diachenko says:

      We need to reign in benefits of congressional professionals! Where else can you get so many
      "tax payer" dollars for so little time invested? A lot of those dollars would make up the lack in needed

      Socdial Security: My dear husband did not want to be a part of the program, but it is linked to
      medicare in such a way that other medical insurance is not enough! Baqd program all the way

    25. stu says:

      The idea of not giving any social security to upper income seniors is not acceptable. Like everyone else who worked, social security payments were deducted from income and must be returned with interest. Instead stop spending on lavish government expansion.

    26. J. Ewing says:

      We don't need 3 fixes, we only need one. Everything proposed here breaks one or more of the promises that have always been made. You either make people work longer to get benefits, pay them less (in inflation adjusted dollars) than they were promised, or tell them their "investment" was poor because they became too rich. None of them are acceptable.

      What we SHOULD do is to simply phase out the current system in favor of privatized accounts. The younger you are (in steps), the more of your FICA tax (and more, if you want) goes into your personal, tax-free retirement account and the less goes into Social Security so that, by the time current 25-year-olds retire, they will be getting zero earned benefit under current law. Those near retirement or already retired get everything promised them. If you still worry or object, require that the investment be in "safe" government-approved funds if you want. Make the private accounts a voluntary choice if you want. Extend the current welfare safety net into old age for those who never get enough in their retirement accounts, if you want. But the problem goes away over 30 years, just as we got into this mess over 30 years.

    27. Blair Franconia, NH says:

      Here's a fourth: Adopt the Chilean Model. Privatize Social Security, along with Medicare and Medicaid, which are
      also going broke.

    28. Frank says:

      Point by point:

      1. Sounds reasonable.
      2. Sounds reasonable
      3. Totally unfair. This would be another example of "conservatives" caving in to social liberal demands for redistribution of wealth. You want some in America to subsidize the retirement benefits of others? Give me a break! What happened to the goal of a small, limited, Constitutional government for conservatives? If anything, Social Security should be PHASED OUT, NOT PERPETUATED BY AN OUT OF CONTROL WEFARE/WARFARE/POLICE STATE:

      Those on Social Security continue on it with same benefits.
      Those 55 & older can opt in or out of Social Security. If they opt in, they get whatever Social Security offers at time they start collecting. Those that opt out get a full refund & can invest it in a private retirement account.
      Those under 55 get a full refund and can invest in a private retirement account.

      This will get the Federal Government eventually out of an Unconstitutional Federal program. If the States want to continue it on a State level that is mandatory for everyone in the State, OK… but then the people in those States can "vote with their feet" & move to another State with lower taxes & no State run Social Security program. Let the States compete with each other for citizens that want to live in them. I bet the States with lower taxes, fewer rules/regulations & welfare programs will out perform economically the other States.

    29. Albert Maslar says:

      To involve all in government, my 5-page 84-point plan INCLUDES a 3% National Sales Tax (NST) with NO-EXEMPTION for any purchase whether by individual, business, corporation, church, school, charity, political, import, export, money transfer into and out of the country, and Government spending. Government tax paid to itself automatically goes against budget, not available for current budget spending but reserved for debt reduction only.

      The 3% NST allocation is 1% for Budget; 1% to reduce National Debt; 1% for Universal Medicare (UMC) for all legal residents having valid visas, permits, or Social Security Number, NOT EIN Employee Identification Number meant for business only but used by illegal residents to get picture ID to gain status and benefits.

      A graduated 20% maximum income tax would make all income equal with no exceptions resulting in a single graduated tax table with limited exemptions and exceptions.

      Stock market transactions would be subject to a 1% transaction tax, limiting negative effects of High Frequency Trading (HFT) that creates artificial volatility gobbling up investor profits in the blink of an eye while causing havoc in the market.

      Based on a study published in The HILL, the NST would result in sufficient revenue to handle the debt, deficit, and National HealthCare that would operate under existing Medicare rules and regulations, thereby limiting bureaucracy, overhead, and regulations.

      There were $755 Trillion total transactions in 2008 and with exempted $312 Trillion in stock transactions deducted, and no exemptions for NST, results in $4.43 Trillion in annual tax revenues: 1% each or $4.43 Trillion for Budget, $4.43 Trillion for Debt reduction; and $4.43 Trillion for Universal Medicare replacing ObamaCare. This can eliminate the national debt within 5-10 years, as $4.43 Trillion approximates current budgets.

      For complete 5-page 84-point plan that includes expanding Social Security to Universal medicare contact;

    30. Jerry says:

      An enormous help to Social Security as the retirement benefit as it was intended to be; would be to remove the Social Security Disability Income Benefit portion. If you want a national disability benefit program make it stand alone and funded by some other method. Understand that you (under normal circumstances) retire once. But you can become disabled many times. If you're young you can be disabled for a longer time than the vast majority of retirees live.

    31. Henry Felter says:

      How do we get Conservative groups to stop calling Social Security an entitlement? I paid into it for over 50 years. The money I receive is less than I would have received had I been able to invest the money privately. It is not an entitlement, but a addendum to retirement paid for by me and stolen by the Government to cover the money they spent trying to buy votes and other wasteful uses of money

    32. Mary.......WI says:

      I believe Obama care will take care of the problem through the aging population ……….decreased number of doctors, death panels, minimal care…..all equals fewer people to claim benefits.

      As I told my doctor last month, (who will stop practicing medicine beginning 2014), Obama and the democrats have taken away my healthcare and my golden years. He was in agreement. I will be 62 in March.

    33. Ron W. Smith says:

      Rob, I'm on board with all three suggestions, but I do have reservations with the second one, increasing the eligibility age. For maybe most people that would be fine. For those whose bodies are exhausted from physical labor,though, there should be an exception. And there should be an exception for those who retire early to begin caregiving for a spouse. We've all known many laborers whose bodies wear out sooner than their ability to quit the labor without losing all of their income. And there are cases–albeit not too many–where a spouse's health requires the partner to caregive and, in so doing, give up employment. That happened to me at age 52–full-time caregiving instead of employment.
      One other thing. We all KNOW that the down-the-road-solvency of Social Security and Medicare are issues that should be dealt with now.while time is in our favor. You have no argument from me on that. You do, though, when you leave out what we spend annually on being SuperPower on Call, a voluntary status since the years following WWII. The costs of a strong National Defense are quite a remove from what maintaining more than 700 military installations around the world costs SuperPower on Call. We spend more annually than the rest of the world combined does every year–now nearly $1.2 trillion–because we're SuperPower on Call. It's no accident that our annual deficit is just about the same dollar amount, in fact, and no mere coincidence that since 9/11, our national debt has ballooned to $16.3 trillion, an amount we are borrowing regularly to increase as we tackle one intervention after another, one war after another.
      Talk about changes to Social Security and medicare is reasonable. Forgetting the enormous expense we have to bear as SuperPower on Call isn't.

    34. Juan Martinez says:

      Really good ideas for fixing Social Security. I hope they can be adopted in the coming year. Next up: please figure out a way to fix Medicare — that will bankrupt our nation even if Social Security doesn't.

    35. Henry says:

      What has happened to the IOU's — money "borrowed" by congress from the SSa?

    36. Dennis Olds says:

      I'm generally in favor of raising the retirement age for the reasons discussed with fourth big 'howevers'. Most important, raising the retirement age without fixing, really fixing, age discrimination will not do much more than drive a much higher percentage of older Americans into poverty. Second, we older Americans live longer but with many more disabilities and physical limitations than those under 65. Just because medicine can now keep us alive longer in our infirmities doesn't mean we're able to do much physically. Third, the high rate of volunteerism among those over 65 will necessarily decrease. Fourth, from what I can tell there aren't nearly enough jobs available of the kind which, because of our infirmaries and limitations, we could perform well enough. Just because the government tells us we have to work longer doesn't mean we'll be able to. Employers have near zero interest in hiring us.

    37. Ron Swaren says:

      Reform the SSI (Supplemental Security Income) entitlement. Despite 1996 reforms more of this is still going to sponsored foreign citizens, who can also qualify for local benefits like housing , Medicaid, food stamps. This is a system that is being exploited way beyond its original intent, which was to go to the neediest Americans, not people who can figure out loopholes. They can pay someone in the home country to take care of their parents and visit them over skype. Jet travel is also cheap.

    38. erb says:

      I know I would be devastated without my only income which is SS. I had a little money put away for retirement but I had to turn that in with a penalty in order to take care of my mom with alzheimer's and her only income was SS at less that $700/mo. I had to take retirement 2 years early also because of cancer surgery and not being able to get back to work. So yes I am worried for myself. The government too freely gives to other countries and spends way too much money. Can't they look at where all the money goes and eliminate or revise programs?

    39. Ron Swaren says:

      The overextended, and growing, SSI entitlement. http://www.vdare.com/articles/another-reason-to-o

      Also NY Times article on how this is being exploited: http://www.nytimes.com/2009/08/31/us/31elder.html

    40. rrs says:

      Change to the system used in Peru. !!!!!!!!!!!

    41. pcj says:

      Social Security is an earned program if you have contributed to it through your working years. It is an entitlement program if you have not. An economist recently stated that if the funds you and your employer had paid to the Social Security program were instead invested in a private program, you would be getting checks twice as much as SS provides. The real problem is past presidents who used SS funds as a "piggybank" for other projects…

      • Kngplyr says:

        The only real entitlement program in this country is the White House and the Congress. Their COLA is not tied to inflation either folks. Nor do they contribute to Medicare. They have private insurance for life. Put me on their program. I'll be a happy camper.
        I agree on the piggy bank statement. No one talks about why SS is insolvent. It isn't because they don't get enough money from the working class.

    42. @IAMPCBob says:

      Putting bandaids on the current outdated system isn't going to 'save' it, only postpones the inevtiable. When Congress took away the reserved funds for SS and began a spending spree , using those funds, they dealt the death blow to seniors. These small fixes are only the start. What is needed and what Congress needs to finally accept is the same sort of system used by Chile, when they, too, realized that the Ponzi scheme was falling apart. They set up private savings accounts back in the 30's for workers, giving them the choice of keeping the old (SS like ours) system or the new savings plans. The government does NOT control the plan and has no chance of stealing that money.

    43. @IAMPCBob says:

      Part Two: It is there for the workers when they finally retire. The amounts of money available for the longest workers is FAR more than what they would have gotten under the old government plan. It takes a few decades to begin saving, but eventually ALL workers would be in this new savings plan. They have final say on what investments are in THEIR portfolio and there are NO withdrawals before retirement, unlike a 401K or an IRA. Regular savings would be recommended for emergencies and other needs. THIS is the plan America needs. It is NOT socialism, it is pure capitalism. People should be able to control their own savings and retirement funds, not some government wonk in DC. In the meantime, make EVERYONE pay into SS and Medicare, and deny the 'wealthy' the right to draw the benefits. Set an appropriate age for retirement.

    44. @IAMPCBob says:

      Part Three: People who have the resources to support themselves in retirement do not NEED Social Security. Cull the ranks of ALL the current phonies who are drawing 'disability' checks. Running out of unemployment entitelement does not mean that one is now DISABLED! Our government has entirely too many leeches, bleeding it dry, and I am not talking about hardworking people who have paid into Social Security all their adult lives. New immigrants to this country have NO BUSINESS drawing our limited SS funds! Yet, they do. Fraud and down right theft are what is ruining this country today. It's high time for a complete housecleaning, starting WITH the House! Our government has gone insane and it's no wonder these people with mental problems are starting to take matters into their own hands! It's like the night of the undead! Zombies are everywhere! We need some common sense in America, today, but the problem with common sense is that it's just so damned UNCOMMON!

    45. Lou Linxwiler says:

      In No. 3, you completely ignore the fact that Social Security was to be funded by our contributions (a poor word choicesince we had to pay, as did our employers.) I paid in several hundred thousand dollars myself as did my various employers. It was wasted and I resent it. Call it what it is – don't 'sugar coat' it!

      Bt virtue of what I paid into the system, I am 'entitled' – but I resent having it called that, lumped in with so many other 'gimmicks' the administration uses to get votes!

    46. babyboomermom says:

      As one of the first baby boomers, I will be happy to relinquish my spousal benefits from Social Security IF I thought that savings would not be wasted. I have been receiving a monthly check since September and feel regret each month. I worry that my child (age 36) will have NOTHING when he reaches retirement age . Therefore, I made the decision to take my Social Security and use that money to help him now and try to have some left for his inheritance. Fortunately, I am a better money manager than our Federal Government!!

    47. guest says:

      If you examine the life expectancy numbers for when Social Security was created; I believe it will show that the average for both men and women was 53.1 years in the mid-1930s (National Center for Health Statistics, National Vital Statistics Reports, vol. 54, no. 19, June 28, 2006. Web :www.cdc.gov/nchs). Read more: Life Expectancy at Birth by Race and Sex, 1930–2007 — Infoplease.com
      In 2009, according to National Vital Statistics Reports, American life expectancy is now significantly beyond 65 years. As you can see the way Social Security was first designed, many Americans (46.9%) of them were not even expected to live long enough to receive any benefits. In fact almost half of average Americans were expected to die more than 10 years prior to reaching the required age of 65 to collect social security in 1935.

      • guest says:

        Here is a break down from 2009 by age for all races and both men and women, averaged together, for life expectancy. The percent figures are for what portion of the populace is expected to live to that particular age.
        Life expectancy in the US 2009:
        65….83.25 % a full 30.14 years longer than in 1935
        70….76.6 %
        75….67.3 %
        80….54.2 %
        85….37.8 %
        90….20.8 %
        95….7.9 %
        100…1.1 %

        • guest says:

          If we were to return to the percentages expected to receive social security when it was first instituted, we would have to move the eligibility age up to a little past 80 years of age.
          In addition to a much increased longevity; according to data from the Bureau of Labor Statistics and the Social Security board of trustees there were only 1.75 full time, private sector people paying into SS for every person receiving benefits in 2010.
          Even employment is impacted by increases in longevity. If older experienced people stay employed longer; there are less job openings available for new workers entering the job market if the jobs available do not increase to absorb new workers entering the job market. Over the last 10 years U.S. population has grown at about 211,000 per month. Traditionally a little less than 50% of the population is in the workforce. We need to add about 100,000 jobs each month just to keep up with increases in population.

    48. Mark Helms says:

      I suggest that under ObamaCare life expectancy will go down.
      Raising retirement age doesn't sound so good if you have a physically demanding occupation that has taken a toll on that persons body.
      Disability benefit is being abused.
      Reduced or no benefits for the wealthy is another tax on the rich, and then were back to what is rich. Are you rich by income or assets? How much income, how much in assets? At least it should be a choice and they should get a charitable deduction for the amount of benefit they could receive.
      No restriction on how much people can earn and still collect. The would continue to support the system and contribute more to the economy. Do not restrict the desire of one's pursuit of happiness from that one's own perspective of happiness.
      Younger workers should have choice of, or mandatory 401K in lieu of SS.
      Ultimate goal should be to end government involvement in retirement responsibilities.

    49. Centurion says:

      If SS benefits are to be means tested on individuals who paid in the maximum 12% of capped earnings during their careers, how is that equitable? If one had invested that $12k per year over 40 years they would have created a million dollar retirement account and the money would belong to them and their estate. The minimum one should expect from this kind of government theft is a tax CREDIT equal to the SS annual income they should have received ($20k) as SS benefits.

    50. anna says:

      Why in the world do you continue to call the money that seniors get from socisl secutity an entitlement. We and our employers paid into this fund for more years thsn most of you have lived. No one ever ssked me if I wanted to contribute. It was just done. Now that I am 73 and no savings and have serious health issues or any other way to exist except for SS you want to call it an entitlement. This is bialoney.

    51. Mark Howard says:

      I have paid thousands into Social Security over the years, yet I am not eligible to draw SS because I have not paid in enough quarters. Yet, there are people showing up here every day that have never paid a DIME into the system that get on to and collect Social Security benefits. There are also people that come here to get on Social Security, then LEAVE and someone sends them their money.

      We need to stop paying benefits to people that have never paid into the system and we need to stop paying benefits to people that are no longer citizens and do not live in the U.S.

      Years ago, there was a woman running a boarding house in Sacramento (http://en.wikipedia.org/wiki/Dorothea_Puente ) that had killed 9 of her tenants and was collecting their SS checks. The SS benefit made them valuable victims. If SS recipients had to go in to an office once or twice a year and scan their thumb print to verity they were the one getting the checks and that they were alive, it would make this type of fraud less profitable and keep SS recipients from being victims.

      If we were to implement these ideas, I have no doubt it would save the SS system BILLIONS going forward and there would be no need to raise the age to save the system from fiscal collapse.

    52. RFR says:

      All solutions are very good that you have suggested and the weak kneed Congress needs to act but they will not. Why? Because they are no longer representing the people their office has become their job and career so the only thing they care about is getting reelected. Where are the men and women who are their to be statesmen and do what is right with our Heritage? The times they vote themselves raises that are double and sometimes triple the median income of their districts and states they cease being concerned with the country they become two bit tin horn dictators. We do have a house of Lords in both chambers. The Speaker knows what is right but he wants "good" press and he wants he and his wife to attend the right social gatherings in DC. I am feed up with him and his so called "conservatives" who act like conservatives and then will not stand their ground when a major media figure sounds the mouth piece for Obama and the democrats and they run for cover with a plan B. To me the first act would be for them to roll back their pay to 1992 levels since that is where we have been taken back to with inflation. Second would be to enact a law that they can only serve two terms consecutively. Third all laws etc. applies to them and they must retire under Social security just like others and pay in to it. We will not "fix" Social Security till it effects the members of the ruling class!

    53. John Olofson says:

      Two things pertaining to social security: 1) It should not be labeled "an entitlement;" we were forced to pay into this scheme, against our will in many cases. Now all we want is our money back with interest and cost of loving increases! And, 2) In the past two years there have been no cost of living increases. In the meantime gas has doubled in price and the cost of food has increased significantly. So let's be very careful about those on social security honestly.

    54. James Phillips says:

      The supposed fix to Social Security that is proposed by Heritage flies in the face of the Constitution. How do you justify taxing citizens for a program to supplement for their retirement years and then deny them that benefit because they succeeded and or saved for their own retirement. Social Security should be a voluntary savings program for those who will not or cannot secure for their retirement during their earning years.

    55. John Hume says:

      What I want the government to do about Social Security is easy, give me back the money I was forced against my free will to pay into the system. Cancel your social programs and get off my back.

    56. Cheryl says:

      Why do Americans have to pay the price for over spending by the government? Why don't they cut Foreign Aid and leave Americans alone.

    57. Edward Kleren says:

      What kind of people are you? You mean wait until 68? How many people over the age of 65 or even 62 will have a job? Some companies want to get rid of you at 55 or 60. What do you expect them to live on?
      I have to average my best 30 years to get a certain amount and not collect full amount till 65.
      Other government people get 2 to 3 to 4 times the amount I get and don't have to have 30 years.
      Cost of living adjustment? I barely got much of one this year not to mention times I didn't get any.
      Other government people get 2% to 5% increase. Mine came to if I am right 1.3%.

      LASTLY! Why isn't anyone asking the Congress or Senate along with other government people to take a cut on theirs? They always go after everyone else.

    58. Attila says:

      1) As many have pointed out, the COLA has been gamed by politicians for their benefit and does not reflect reality. Check out Shadow Stats for more realistic numbers. Using non-gamed numbers would reveal a 50% drop in real SS benefits.

      2) This seems the only reasonable measure. The idea was to provide end of life protection, not decades of mind numbing idleness, and provide a major pander tool for the political class.

      3) Marx would be proud of this one. "From each according to his means, etc" is certainly an immoral extortion from one group to curry favor of another. If a person pays, a person should collect; their other income is of no consequence or any of our business for that matter.

      Jack Dixon

    59. Judi says:

      Lower federal employees, senators, representatives, presidents, vice presidents, etc. retirement coverage to the same as social security.

    60. Wolf says:

      The most important fix needed is to merge the government employees (Senate, House, Administration, and Justices) retirement system with the Social Security System * is is outrageous that politicians treat themselves as dome sort of elite segment of our population! This above the masses self aggrandizement opinion politicians have of themselves must stop! The Social Security System must be for all citizens * no exceptions!

    61. David Dogman Harvey says:

      Why is there never the mention of "raising the age of retirement" for Public Sector Workers? We in the Private Sector should work till we're 65 or 67 so Public Workers can retire at 49? If this is the benefit for dangerous work like police and fire, fine. 30 years and you can retire, but after they work alongside us in the Private Sector till the age of 65, They can then collect their Public Pension and SS Benefits.

    62. John Scott says:

      Uncap income level for contribution from income; base on gross income;and index distribution regressively.
      Above concept should apply to Medicare contribution also. Has anyone ever ran the figures on that. All FY
      excess should be applied to our national debt until eliminated and lock box accounts of both accounts at Treasury will be given same amount credit to allow affordable COLA hikes after debt is eliminated. This would justify the Fed to print for a good purpose, instead of letting the banks hoarde the cash like they are
      doing now.

    63. Gary M. says:

      I'm sorry, I had to shake my head in disbelief at your first proposal. Seniors are getting a 1.5% increase in their Social Security in 2013. There are years recently where their has been no increase, yet what we need to do is save money with a "chained" index. U'll have to wait for an explanation of how the 'chained' index works, but as it is most of the heavy hitter expenses these retired workers have each month aren't even included in the current indexing formula. Did your energy bills go up 1.5% last year? How about your grocery bill? Your taxes?

      You had better do a much more thoughtful, informational marketing campaign on your new indexing program. Your touting the savings, not how that effects the individual senior. You saw that rolled out in the fall elections by the Democrats. Less vague, more facts or once again I believe they are going to be mopping the floor with your as we go over the cliff. Most Democrats don't see a big cliff, they see a big opportunity to sew up the senior vote.

    64. grams says:

      First of all, my social security retirement is NOT an entitlement, I paid into it. Congress has been stealing from social security since the Johnson administration, it is time Congress PAID the seniors back.-grams89408

    65. Sam says:

      I can think of 2 more changes. First, only give social security payments to those who have paid into it. Right now there are a lot of people getting SSA benefits who have never paid into it. Second, eliminate the ceiling
      for collecting Fica taxes for those working. I believe the ceiling is now about 110K to 120K. People making more then that may not be wealthy, but they are a long way from being poor, and I believe they can afford that.

    66. Bill Meyers says:

      There are so many problems with the system but they all lead right back to the greedy politicians. The Federal government saw the problem and thought they had a band aid by making members of the Federal Employees Retirement System (FERS) pay social security and make it a part of their retirement system. This would infuse millions of dollars into the system to help fend off the social security financial crisis. Now that people have started to retire from the FERS system they are having to pay social security to these people as well and the problem has doubled. NOw we have politicians and others making statements like the one in the above article "Focus benefits on those who most need them. It’s time to return Social Security to one of its original purposes: protecting seniors who face economic hardship. In order to make Social Security a true insurance program, upper-income seniors would face reduced benefits or none at all." These people paid into the system and now some Washington beauracrat, or some other think tank organization wants to cut their benefits, or stop them altogether. According to the governments own records I paid over $125,000 into benefits, If the government wants to stop my checks then all I am asking is give me back the money I paid in to the system. It is not my fault greedy politicians stole the money and squandered it on there pet projects.

    67. Larry says:

      The article does NOT recognize that Congress has stolen the SS contributions of employers and employees.

      There IS a way to force the funds being paid back!

    68. Bob LaFrank says:

      And get the people who haven't paid into SS off of it. Too much skimming off the top. If there are people who haven't paid into the system who need assistance then fine. They can live in a barracks and pick fruit for a living. If they don't feel like picking fruit then make soylent green out of them to feed the people who will pick fruit. See?

    69. Ben C. says:

      What Heritage and other "think tanks" fail to realize or publish is that the solution for Social Security and government spending is to return to self reliance rather than government reliance. All the rhetoric that is being put forth is a waste of time and energy. The "takers" are the problem, not the "givers." We as a country have lost our moral compass and individual responsibility. We are now a nation of sheep being led by wolves in sheep clothing. Face it – our kids will never experience the freedom for achievement that we experienced. The "central planners" will see to this.

    70. Bob says:

      I guess I missed something in the recent past I didn't realize that those on Social Security were getting such big colas. How many raises did they get and how much was it

      Yes it's true people who reach the age of 65 may live longer than in the past but what also needs to be taken into account is the number of people who don't reach 65. Have you taken that into account? I don't like making it easier for those who screwed up my retirement to do it again.

      Although I agree the very wealthy may not need their Social Security it doesn't change the fact that they and their employers paid into the account for them not for someone else. As it stands right now it should be made voluntary for the wealthy to fore go the Social Security payments.

      I haven't seen anything about those receiving who may not have earned it until that is addressed no other fix should apply.

      The government is the worst possible choice for handling the countries retirement for the simple reason that future congresses are not bound by the actions of past congresses. In other words congress can change any fixes any time they want and that is a bad thing.

    71. savernation says:

      Since you don't allow sufficient comment space for comlex topics, I'll cut and paste my comment into installments…
      Part 1: This is another solution that does not fix the causal factors of our debt and deficit and attacks those who actually contributed
      If you want to index something, start by indexing government spending to half of the CPI. This will give the Government less of an incentive to
      pump worthless dollars into the economy, driving up costs of goods and services, and stop this maddening 7-8% automatic increases in the total

    72. savernation says:

      Part 2
      Second, Congress should be prohibited from lowering payroll taxes until they come up with a move solvent solution that does not hurt
      current retirement recipients. The 2% reduction in payroll taxes robbed $103B in 2011 and $113 B from Social Securty. The net-net is that you took
      $216B out of Social Security which would fund the COLA change you so wrongly espouse for 10 years rather than take it from old men and women
      who are surving on $1,200 – $2,000 per month. You try living on that!

    73. savernation says:

      Part 3
      Raising the SS age is just as nuts as the COLA when you are not willing to either
      allow some for of privatizing of SS for those under 55 so the $48 Trillion in Unfunded Liabilities can be addressed in a meaningful way. Your argument
      will be that this is not politically acceptible.

    74. Jeanne Stotler says:

      The writer left out the fact that since the Jhnson aministration, the gorment has been using Soc. SEc. and madicare deductions n the general fund. Te goverment has gtenaway with criminal behavior, this money was suppose to g int a seperate fund and draw interest through T-bonds. This is not an intitlement for most of s, I 've paid into Soc. Se. ince I was 14, and Medicare since it's beginning, since part A is for hospitals, I've sed it once, I very seldom see a doctor and most is paid by supplement which I pay dearly for and it's increase plus increase in part D and ncrease in te deduction for part B, left me getting less than in 2012, I am one of those widows who depend on this to survive.

    75. Lindecisive says:

      A quick question for proud Americans. Not long ago the position I held at my company was eliminated and I suddenly had no income and a pile of bills—basically, I was poor. With tremendous guilt, I was forced to negotiate and plead with the utility companies to extend my payments. It was a very stressful time in my life, but with the help of friends and using the traditional conservative tools of frugality+hard work, I was able to find a job and get back on my feet. Now that my financial situation has stabilized and (though not nearly as blessed as some) I found a comfortable little apt. to rent, I thought I'd give a couple hundred dollars back to those less fortunate in my community. I was planning to travel to the low income area where there is an organization that helps struggling families pay their heating bills (and other necessities) for the upcoming winter. But now, after reading the posts here, I'm afraid that these funds would only enable these people to become dependent. Wouldn't it be more effective if, instead, I were to travel up to the affluent areas where people have (because of their obvious status) proven to be better money managers, and give my $200 to someone whose use of it strengthens the economy, thereby helping those people out of poverty? Torn and confused—
      Lynn S.

    76. Audrey says:

      One of the major problems is….no matter….and it should matter is that if social security is given some first aid…congress will find ways of spending this money and in ten years the obligations will not only be larger,and the tax bite even bigger…..the solution mabe direct our own social security and and not depend the the irresponsible federal government to give us back our money plus what it has earned.

    77. Bud says:

      I believe that you pay FICA tax up to you reach a certain level of income. I believe that is $125K and after that you don't pay any tax the rest of the year. Why not pay FICA on every dollar earned? Wouldn't that be taxing the "RICH"? Also, when you are rich why would you need SS at all. Do you think people like Forbes, Souros, Gates, Trump and other really need it? If these people didn't collect look at how much would be there for those who do.

    78. Me Again says:

      Why is the Media constantly calling Social Security and Meidcare an "Entitlement" programs when people have paid into those programs for years to have them for their golden years. Granted Medicaid is one. The way Washington has re-written the programs to give to some who never paid into them is what killed these programs.

      • K. Smith says:

        You should do a google search or just look up Medicare and SS on Wikipedia's websites. Go to the charts near the end and you can see what the average person pays in vs what he gets out. SS is more in line, but Medicare is way over the top on how much you get out. Medicare is the worst..by far

    79. K. Massey says:

      I have not read all the above comments however I do agree with the three recommended fixes in this article.
      I would add two others, 1) Don't stop payments into the system when a certain income level is reached and
      2) quit being so lenient with payments to people who have paid very little into the system plus all the disability fraud that is going on must be stopped. I paid my full amount in each year since 1956 until recently so if anyone deserves benefits now it is someone like myself.

    80. Chris DeSana says:

      Taking away bennies from those that fund the entitlements is a progressive ideology – the wealthiest among us deserve to have equal access to the entitlements that they contribute.

    81. @egbegb says:

      These are novel solutions.
      1. Use a chained CPI. The effect is to reduce benefits to those already collecting Social Security.
      2. Increase the retirement age. This is a second way to reduce benefits, but this time for those yet to retire.
      3. Reduce or eliminate benefits for rich people – fundamentally changing the nature of Social Security and
      again, reducing benefits.

      It seems like you have struck on a solution to the Social Security problem – Reduce Benefits.

      Do you think this method would work for Medicare also?

    82. Luonne Dumak says:

      Social Security should be changed to personal accounts. We would all have more money to retire on.Read Secure in Glaveston by John Fund and read articles by Jose Pinera and Chile. It has been proven that if we had personal accounts that people would have almost twice has much in retirement for even the lowest payed workers. As far as I'm concerned S.S. is nothing but an uncobstitutional poni csheme. Government destorys everything they touch.

    83. larryfrom10ec says:

      You are underwater on you home mortgage, all your credit cards are maxed out, you are months behind on your car payments and you've borrowed every penny you can get from every relative and friend you have,m you owe three months on your furniture and you've had advances on your salary for the next three month's wages. But no worries: you have a pocketful of IOUs you wrote to yourself while you were running up all those debts. That is how the Social Security Trust Fund works, you liberal economic illiterates.

    84. Gerald Holloway says:

      One thing is always missing in the talking points about SS. (1) The fund paid in was not to used for anything except SS, what happened passed congressmen got their hand on it and now it is not their, why? (2) If we change the age we have to assume people will work longer. Are we going to work longer is the Question?

    85. Dr. Bob says:

      The third suggestion is crazy. Social Security is like an annuity. You pay into it and in your later years you are paid back. To have to pay into a system all your life and then get nothing in return reminds me of taxation without representation. What gives with Heritage? What nut wrote this article? Sounds like a Demonocrat. I'm withdrawning my support of Heritage.

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