In 2010 the Democratic-controlled White House commissioned a deficit committee. This sounds good, but they are proposing to slash benefits to a program that doesn't contribute one penny to our nation's deficit or national debt. Social Security is under attack with hyperbole and misleading information. We might expect this from the Republican Party, with their seething hatred for well-run government programs, but having the former party of the people attacking the most successful program in our country's history shows the influence of special interests and their lobbyists on our entire political system. We cannot let this happen.
Since the 1950s, retirement has been a three-pillar stool of Equity in our homes, Pensions, and Social Security. In 1980 we had a private workforce that was about twenty-five percent unionized; fifty percent of workers had pensions, and the average U.S. homeowner had two-thirds equity in their homes. In 2010 only about six percent of the private workforce is unionized, eight percent have pensions, and our housing market has crashed, leaving one in three American homeowners owing more on their home than it's worth. The only remaining solid pillar in this stool is Social Security, because it hasn't been subject to the privatization epidemic we have experienced over the past 30 years.
The fact is that Social Security is solvent and in 2009 brought in a surplus. If nothing is done to the insurance program it will pay out full payments until the year 2039. According to the non-partisan Congressional Budget Office, in 2010 there is a $2.5 trillion surplus, and that will grow to $4 trillion by 2023. So the Republican fear tactics are a lie and the Democratic leadership inability to stand up to the financial sector lobbying efforts is a symptom of a corrupted political system that is leaving average Americans out in the cold.
The Republican Party and the Corporate Democrats are proposing to privatize Social Security and to increase the retirement age to seventy.
Privatizing was pushed hard by the Bush administration, and luckily the plan didn't go through. Imagine how much worse condition our nation would be in if Social Security had been at the mercy of Wall Street CEOs. Tens of millions of Americans are already hurting because of the deregulated Wall Street giants and their direct involvement in the American economy's collapse. The big payoff for Wall Street in privatizing Social Security would be the administrative costs of processing trillions of dollars, which translates into more fees and risk for workers. This is an absolutely horrible idea and must never happen.
The second proposal is to increase the retirement age to seventy. Seventy! This is an immoral proposal for a number of reasons. One, it increases the likelihood that tens of thousands of Americans will die before receiving a single payment due to having to work well into their retirement years. Two, by increasing the age, about fifteen percent of benefits will be lost by younger workers due to the extended years they have to pay into program but are not receiving payments from it. Three, this will increase the number of people in the work pool, thereby increasing unemployment and decreasing workers wages. Increasing the retirement age to seventy is immoral, wrong, and counterproductive in building a strong middle class.
I'm proposing a simple answer that will make the FICA tax progressive and Social Security solvent forever. Remove the FICA $106,800 cap and make all income susceptible to the tax, except long-term investments of seven years or more. By doing this, millionaires and billionaires will pay into the program at the same percentage as the rest of us. According to the New America Foundation and their recent study and article on Social Security "Secure Retirement for All Americans," we could increase benefits to recipients by 50% if the cap is removed. My proposal is to give a paycheck tax break to all Americans by reducing the roughly 12 percent tax down to a 10 percent tax, allowing more people to have more money in their pockets while creating a solvent Social Security forever.
Lets make the adjustments needed to ensure a retirement with dignity for all Americans for generations to come.