Can We, and/or Should We, Fix Social Security?

Our existing Social Security system lives comfortably in the capitalist economic model we have here in the US. We can agree it has flaws which need to be addressed from time to time.

The current flaw is that without some changes, it won’t be able to provide the financial safety net for older Americans that exists today. People are living longer and longer, and there are more of us, which translates to a projection that current benefits to beneficiaries are unsustainable.

There was something similar happening in the early 1980’s and Congress came up with a remedy. They increased the percentage of earned income that was re-directed toward the Old-Age and Survivors Insurance (OASI) Trust Fund. They also increased the upper limit of earned income that is subject to the percentage.

By the time the problem reaches the same level of dysfunction that caused the last major changes, almost 50 years will have passed.

Given that roughly 50% of retired Americans depend exclusively on monthly benefits to sustain themselves, the goal of some to simply do away with Social Security is not realistic. Only a very small % of Americans have little or no need for a financial safety net when they choose to leave the workforce.

Given the economic, political and social pressures across the voting age members of our society, the question of whether we ‘should’ fix social security is probably a given. As for the ‘can we’ part, the answer is relatively simple. What is required is the political will to make it happen.

As was done in the 1980’s, we can increase the payroll tax percentage. It need not happen overnight, but could be phased in over a decade.

In like manner, we can apply the payroll tax on earnings beyond the current limit of $132,900 in 2019. This is up from $128,400 in 2018. That’s referred to as the wage base limit. And yes, the limit has been increasing over the years. In 2009, it was $106,800. But in order to avoid the crisis which is projected to happen in 2034 (?), there needs to be either an immediate jump upwards, or a steady, predictable increase written into law.

Let me give you some context. I spoke this morning with one of my physicians about his readiness to retire. He’s in his early 60’s and said he confessed he’s no-where near ready. Part of that he attributes to having children later in life. It’s my guess that if he wants to maintain his current lifestyle, he’s going to depend heavily on Social Security at some point not far down the road.

It’s not a stretch to say he’s one of many millions of Americans earning more than $132,900 in 2019. Is it reasonable for the wage limit to be increased, either by a substantial amount right away, or towards a much higher upper limit over the next decade?

A lot of people probably freaked out in 1983 when both the % and the wage base limit was increased. Frankly, I can’t remember how I reacted, if I reacted at all. What I do know is that if a remedy isn’t found, and I’m still alive in 2033, I’m going to be royally pissed when my checks are suddenly smaller. Have I answered the ‘can we’ part? I hope so… at the very least, we need to have a discussion at the national level. Can I count of Republicans to join the conversation? Stay tuned…

Tony Kendzior \ July 16, 2019