Every couple of years the Republicans start trying to claim that we really need to “fix” Social Security because it is running out of funds and very soon. Recently, Congressman Reid Ribble, a Republican from Wisconsin, was the latest to take up the call. The Committee for a Responsible Budget, a budget policy think tank, ran a copy of the letter here. While it is a fact that the gentrification of the baby boomer generation is about to put an enormous strain on the Social Security system, and that various politicians have raided the funds to pay for other things, AND that within about thirty years if nothing is done the system will reach a tipping point where there will be more people receiving benefits then there will be money going into it, the truth remains that now is probably the absolute worst time to discuss these matters.
Again, it is important that something eventually be done, but considering how Congress can barely agree on what to order out for lunch, I highly doubt that anything worthwhile could happen anytime soon. The bigger issue is what Ribble proposes. As a Republican, although he does include the good plan to change how benefits are calculated for higher earners, making it so that people who don’t need Social Security don’t take benefits from people who do, the first two options he lists in his letter are forcing hard working people to work even longer before they can get their full benefits, and taking money away from poor seniors by reducing their annual increases.
One can argue that raising the retirement age is not as big of a deal, that with people living longer lives it makes sense for them to work for more years, but there is a major difference between being a member of Congress until the day you die, and working in construction or manufacturing or any other physically demanding job. Congressmen have a distinct disconnect from the labors of the average person. The only way it would make sense to possibly raise the retirement age is if it was connected to the type of work that someone does.
As for the chained CPI issue that even Obama has said he might consider, what it equates to is a stagnation of benefits. While inflation pushes up the cost of all goods and services year after year, retirees would be forced to cover those costs with barely any additional income. For anyone who has endured another year at their job where insurance premiums went up, but they didn’t get a raise, they’ll know how horrible a proposition this is.
Eventually Social Security will have to be dealt with, and it should certainly be taken care of sooner rather than later, but punishing our seniors is not the way to go about it. While looking at the CRFB’s Social Security Reformer, it can be noted that the one single thing that can be done that has the most impact is removing the cap on Social Security taxable income. Currently income is only taxed up to a certain amount, after that amount someone could make millions more and not pay anything more into the Social Security fund. The current amount for 2013 is $113,700, which means that anyone who makes more than that doesn’t pay anything more into Social Security despite the fact that most people don’t make that much and yet the ones who do contribute an inordinate amount to the GDP. Be sure to keep an eye out for more discussion to come.