Strengthening Social Security for Generations to Come
As seen in Dallas Morning News
To understand why Social Security is currently in trouble, we have to look at how America has changed since the program was established in 1935. And a lot has changed over 81 years. People are living longer, more women are working, and families are having fewer children. It’s also important to note that the number of workers paying Social Security taxes per each retiree receiving benefits has dropped from 16 in 1950 to under three today.
To make matters worse, the tax burden on workers has increased. When Social Security started, workers and employees each paid 1% on the first $3,000 of earnings. Today, they each pay 6.2% on the first $118,500 of earnings – and this still is not enough to keep Social Security solvent. In fact, since 2010 Social Security has paid more in benefits each year than it’s taken in through taxes.
Clearly we cannot tax our way to fixing Social Security. The problem isn’t revenue. The problem is that the program has become outdated. And if no action is taken, Social Security will not be able to pay full benefits – the benefits our workers and retirees are counting on for their future – starting in 2034.
The good news is that we can fix it.
As Chairman of the Ways and Means Social Security Subcommittee, I have long fought for changes to modernize Social Security, reward work, and improve retirement security. The plan I released a few days ago – the Social Security Reform Act – does exactly that. It permanently fixes Social Security without raising taxes. What’s more, it actually cuts taxes that seniors pay on their Social Security benefits.
My plan modernizes Social Security by improving how benefits are calculated, updating the retirement age, and calculating annual cost of living adjustments in a more accurate way.
Because all workers should be treated the same, my plan also gets rid of the Windfall Elimination Provision (WEP) – a flawed policy affecting many teachers, fire fighters, and police officers here in Texas and across the country. With the repeal of WEP, folks will no longer be penalized for choosing to serve their communities.
I also made sure my plan increases benefits for long career, low earners. After all, Social Security is a program for workers – and it should reward hard work! That’s why my plan builds upon a bill I had signed into law in 2000, The Senior Citizens Freedom to Work Act of 2000 (P.L. 106-182). This law ended an unfair earning penalty (known as the retirement earnings test) for some seniors and allowed them to receive benefits while they continue to work. But this penalty still remains for others, and that’s just not right. The Social Security Reform Act fully repeals the retirement earnings test once and for all. Seniors earn their Social Security benefits and they have the right to them, whether they are fully retired or if they need to keep working.
Finally, for many folks Social Security is an important part of retirement security. With this in mind, my plan ends the taxation of Social Security benefits for single individuals with income below $34,000 and for married couples with income below $44,000. Furthermore, it provides Americans with a choice in how they receive their benefits when they wait to claim. Seniors who delay claiming could choose to receive part of their benefit as a lump sum if they want.
All of these ideas are commonsense solutions to get this important program back on track. And we must get it back on track soon. Waiting to act doesn’t make Social Security’s problems any easier to solve. In fact, it makes it harder.
It’s time to have a fact-based conversation about what it takes to ensure Social Security is on the sound footing that Americans expect and deserve. The Social Security Reform Act is a serious answer to how we can permanently save this important program – without raising taxes.
Anyone can say they want to save Social Security, but doing so requires tough decisions.
With this plan, I want to start the conversation about what it takes to make Social Security’s future strong. I encourage others to put their pen to paper and share their own plan for how to do just that.
Americans want, need, and deserve to be able to count on Social Security. It’s up to us in Congress to make sure they can.