Last week, the co-chairs of President Obama’s debt reduction commission released a report outlining their recommendations to reduce the budget deficit. Since then, a raucous debate has erupted over the proper measues that should be taken to rein in the U.S. debt.
Yesterday, Sens. John Cornyn (R-TX) and Mark Warner (D-VA) appeared on CNN’s State of the Union to discuss various political matters. At one point, the senators addressed the proposals made by the commission. Warner said he had to give the “commission a lot of credit for, you know putting out some hard choices. It’s kind of where the reality meets the campaign rhetoric about deficit reduction.” He then went on to say that because “folks at 25 or 30 years old today aren’t going to get Social Security at 65 or 67,” that we’re “going to have to raise the retirement age slowly, in a slow way that doesn’t affect folks 50, 55. He concluded that “this is just math. We’ve got to do some of these things”:
WARNER: I actually give the budget commission a lot of credit for, you know, putting out some hard choices. It’s kind of where the reality meets the campaign rhetoric about deficit reduction. And I think there’s a lot in the plan that I could be supportive of. Listen, some of this stuff is not Democrat or Republican. Some of it’s just math. For example, 50 years ago, eight retirees for every worker, now only two. Look, folks at 25 or 30 years old today aren’t going to get Social Security at 65 or 67. We’re going to have to raise the retirement age slowly, in a slow way that doesn’t affect folks 50, 55. But this is just math. We’ve got to do some of these things.
Social Security is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084 (once you account for inflation those basically consist of full benefits). It is far from in crisis. That does not mean that there aren’t positive and progressive changes that could possibly be made to the system.
Raising the retirement age, however, would be a particularly punitive way to solve future deficits in the program’s funding. While it is true that average life expectancy has increased over time, these gains are largely a result of life expectancy rising among upper income earners. Among moderate and low income workers, life expectancy has barely changed. And “nearly half of workers over the age of 58 work at jobs that are either physically demanding or involve difficult work conditions.” Raising the retirement age would create enormous burdens on those who work at these jobs.
A better, more progressive solution involves raising the payroll tax cap. Currently, only the first $106,800 of a person’s income is considered taxable for the purpose of funding Social Security. Raising this cap significantly or eliminating it would essentially leave the program fully funded for decades to come, and not create undue hardship on those working physically demanding jobs.
An Election Day poll by Survey USA found that 85 percent of voters are opposed to cutting Social Security, and that Republicans by a 2-to-1 margin back raising the tax cap over raising the retirement age.