U.S. Senators Lindsey Graham (R-South Carolina), Rand Paul (R-Kentucky), and Mike Lee (R-Utah) today introduced new legislation addressing major funding issues facing Social Security in the coming years. The Senators noted their plan, Social Security Solvency and Sustainability Act, achieves sustainable solvency for the Social Security system without any tax increases.
What the plan accomplishes:
Reduces debt held by the public by $6.2 trillion by 2085.
Eliminates the current difference of $5.4 trillion between benefits promised and what Social Security can actually pay.
Creates a solvent and sustainable Social Security system that will be able to provide the benefits it promises to future generations without raising taxes.
Gradual Increase in the Social Security Retirement Age -- The senators propose a gradual increase in the Social Security full retirement age to 70 by 2032.
Indexing the Retirement Age to Longevity -- When retirement age of 70 is achieved, the full retirement age will then be indexed to increases or decreases in life expectancy. Indexing will help maintain a constant ratio of years worked to years spent in retirement. (Click here for chart detailing current law and Social Security Solvency and Sustainability Act retirement age.)
Gradual Increase in the Early Retirement Age -- The senators propose a gradual increase in the Social Security early retirement age from 62 to 64 by 2028.
Slower Benefit Accumulation for Higher Lifetime Earners -- After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth. Above $43,000, benefits will be calculated based on price growth.
"Social Security is coming unraveled and it must be preserved," said Senator Graham. "Our plan saves Social Security and will be significant down-payment on comprehensive entitlement reform. I've been involved in Social Security reform since my election to the Senate in 2002. I'm quite familiar with the scare tactics and know first-hand the demagoguery that is sure to come our way. But the American people know the problems facing Social Security are real and must be addressed. Every year we delay, the solutions get more difficult and the consequences of inaction become more dramatic. It's time for action."
"This plan fully fixes the shortfall in the Social Security program, ensuring that the promises we make today can and will be kept. It gradually implements changes everyone knows need to be made," Senator Paul said. "If we wait a few years, the fixes will have to be more drastic and less thought-out and gradual. I urge anyone who wishes to join this discussion to do so by bringing forward their own plan that fully fixes our Social Security system for the next 75 years or more."
"Our proposal addresses the coming Social Security deficit in a responsible way without raising taxes," said Senator Lee. "These ideas should be part of the larger debate over entitlement reform that we will have in the coming months. For those who might oppose these solutions, I look forward to hearing their ideas to make Social Security solvent and sustainable as the discussion goes forward."