Social Security, the foundation of retirement income for many, faces intense financial pressures as the program’s trust funds are projected to be depleted by 2033. If Congress is unwilling to find a bipartisan solution, benefits are expected to be cut by 20% to 25%.
However, there’s a diverse coalition of lawmakers, policy experts, and senior advocacy groups stepping up with their visions for ensuring the program’s solvency. Here, we break down ideas from all sources and viewpoints, including progressives, conservatives, and centrists. The eventual solution may result from suggestions from each group.
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Progressive suggestions
Among their proposals, Democrats and other progressive lawmakers suggest lifting the payroll tax cap. Currently, workers pay Social Security taxes on wages up to $184,500, while any additional earnings are free of Social Security taxes. This proposal would either eliminate or significantly raise the cap so the wealthiest Americans will pay Social Security taxes on more of their income or on all of it.
Many progressives also support the Social Security Expansion Act, which increases monthly benefits by $200 across the board, ties cost-of-living adjustments (COLAs) to the Consumer Price Index for the Elderly (CPI-E) to better reflect seniors’ expenses, and ensures low-income workers receive more support in retirement.
Conservative suggestions
Republican lawmakers and conservative think tanks like the Heritage Foundation have proposed these fixes for the Social Security trust fund:
- Raise the retirement age: The current full retirement age (FRA) is 67. Conservative groups propose gradually increasing it to 69 or 70.
- Use means testing: This proposal would reduce or eliminate Social Security benefits for high-income retirees.
- Adjust COLA calculations: Use the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) rather than the measure currently used to determine COLAs. The C-CPI-U tends to show lower inflation rates than the traditional CPI.
- Privatize Social Security: Replace Social Security with a private system of retirement accounts that workers would control themselves.
Centrist suggestions
Somewhere between progressive and conservative proposals lie those of centrists. They include:
- Establish a sovereign wealth fund: This fund would invest in markets to (hopefully) generate greater returns for Social Security.
- Gradually adjust the benefits formula: Implement modest changes to how benefits are calculated.
- Introduce means testing: Reduce the benefits for the wealthiest Americans who have other substantial income sources. The attempt is to bridge the partisan divide by combining elements from plans proposed by both progressives and conservatives.
Based on this short list, it’s easy to see how challenging it may be to settle on a solution. The good news is that there is no shortage of proposals to choose from.
