Social Security is a highly effective and efficient program, with an almost $3 trillion Trust Fund surplus. Since its inception in 1935, Social Security has helped to reduce the elderly poverty rate by over forty percent. The program currently averages an annual benefit payment of $15,000 for retirees, keeps 20 million Americans out of poverty, and puts almost $775 billion into the economy.
But the retirement deficit, which is the difference between what Americans have saved for retirement and what they need to maintain their standard of living in retirement, is $6.6 trillion. In a time of stagnating wages, high income inequality, and eroding pensions and personal savings, Social Security should be expanded, not cut.
I support changing the cost of living adjustment (COLA) to a higher measure of inflation, from the current CPI-W to CPI-E. With this shift, retirees would see an average increase of $70 a month in benefits, good for roughly $800 more annually. This accounts for the fact that seniors spend a greater proportion of their income on healthcare, whose costs have risen greater than inflation.
I also support increasing benefits for divorced spouses, widows and widowers, and reinstating the Student Benefit for those in college or vocational school with retired, disabled, or deceased parents. Currently, children with retired, disabled or deceased parents only receive benefits until they are 18 years old.
To pay for these benefit increases while also ensuring that Social Security is fully-funded in perpetuity, I want to scrap the payroll tax cap. Payroll tax is the only tax in the country with a cap, making it extremely regressive. Eliminating the cap alone would cover roughly 80% of the projected long-term shortfall in the Trust Fund.
To cover the remaining shortfall and then some, I support raising payroll tax rates by .85% on those paying at least that percentage in income tax. Income taxes should then be cut by the percentage of payroll tax increase on those making up to $400,000, to make it tax-burden neutral while putting more money in people's pockets.