By Eric Millman, CMC ’18
As the election season heats up, one of the most important issues on older voters’ minds is (unsurprisingly) Social Security. The national program has become a hallmark of America’s commitment to providing for the elderly in their old age. Unfortunately, Social Security is in desperate need of comprehensive reform, but neither viable presidential candidate on the Democratic (and now the Republican) side has proposed the kind of measures necessary to ensure the program’s long-term sustainability.
Last summer, the trustees of the Social Security system’s finances published their annual report, which estimated that the combined trust funds that help pay old age and disability benefits are likely to run out by 2034. Hillary Clinton and Bernie Sanders agree on expanding Social Security, and both have different ideas on how to finance their respective visions. However, neither of their plans include the kind of pragmatic, bipartisan elements necessary to pass Congress or to adequately address the magnitude of the issue.
Senator Bernie Sanders would like to expand Social Security by eliminating the $250,000 cap on taxable income and by implementing a 6.2% tax on investment income above that mark. Clinton, on the other hand, has been considering a range of options (including Senator Sanders’ proposal) to finance expanded benefits, and has not yet formally announced her plan.
With respect to benefits, Senator Sanders would raise benefits to a minimum of $65 per month, and, according to his campaign, people making less than $16,000 a year would end up receiving $1,300 more annually from the program. Secretary Clinton’s plan would more specifically target poorest beneficiaries, particularly women who are single, divorced, or widowed, who have substantially higher poverty rates than elderly males.
Neither of these two candidates’ plans include the optimal blend of policies to fix the systemic inefficiencies of Social Security System. And, unfortunately, the only candidate who did advance such a plan has dropped out of the race: Chris Christie. In addition to eliminating the $250,000 cap on taxable income, Governor Christie’s plan would have “means-tested” the program– retirees earning more than $250,000 per year would receive zero benefits, and those earning more than $80,000 would have theirs reduced. Furthermore, his plan would have raised the retirement age from 67 to 69.
The fact of the matter is that if you are earning more than $80,000 per year, you don’t need a monthly Social Security check. Is it unfair to pay into a system thinking that you’ll receive certain benefits from it, and then end up not getting what you were promised? Sure. But that’s a price that the old and wealthy must pay in order to fix the broken system.
With respect to the increase in the retirement age, this is also a practical necessity. In 1983, when the last reform was made, the average life expectancy was 74.46 years. Today it is 78.84 and rising. That’s four more years of benefits that must be paid for.
Ultimately, proposing meaningful Social Security reform was a political risk that Chris Christie bravely took, but was unable to see come to fruition. In the coming months, we should all encourage presidential, congressional, and state candidates to embrace the kind of sensible, comprehensive reform we will someday thank ourselves for having the courage to stand up for.