Significant proposals to enhance Social Security’s long-range financial stability are emerging from a variety of sources. Although there was only one mention of Social Security during the first round of Democratic Presidential debates in June, it is likely to get much more attention from candidates in the coming months.
Recently, I attended the annual Peter G. Peterson Foundation’s Fiscal Summit in DC. (The Peterson Foundation has been a long-time supporter of the Academy’s work.)
The Summit featured a “Solutions Initiative,” in which seven policy organizations from across the political spectrum put forward plans “to set America on a stronger, more sustainable fiscal path.” In keeping with Peterson’s priorities, the overriding goal of each plan was to reduce the federal debt over the next 30 years. Each organization’s plans include proposals that would change elements of Social Security, which the Peterson Foundation notes is “currently the largest program in the federal budget and represents an essential part of Americans’ retirement.”
Given this range of political perspectives, it should be no surprise that the seven organizations – American Action Forum (AAF), American Enterprise Institute (AEI), Bipartisan Policy Center (BPC), Center for American Progress (CAP), Economic Policy Institute (EPI), Manhattan Institute (MI), and Progressive Policy Institute (PPI) – address Social Security’s challenges in different ways. Five of the seven propose some reduction in benefits for some beneficiaries, and all but one propose raising additional revenues.
Of the seven organizations, four identify Social Security as one of their top three priorities.
The following is a summary of each organization’s Social Security proposals.
American Action Forum (AAF)
(Douglas Holtz-Eakin, AAF’s President, serves on the Academy’s Board of Directors.)
American Enterprise Institute (AEI)
Bipartisan Policy Center (BPC)
(Bill Hoagland, BPC’s Sr. Vice President, is a former member of the Academy’s Board of Directors. Jason Fichtner, who helped in the development of BPC’s plan, serves on the Academy’s Board of Directors.)
Center for American Progress (CAP)
In a memorandum accompanying its plan, CAP noted that: “Public investments in areas like infrastructure, education, and social insurance make workers more productive, help sustain employment, and reduce inequality.”
(Rebecca Vallas, a CAP Senior Fellow, serves on the Academy’s Board of Directors.)
Economic Policy Institute (EPI)
Manhattan Institute (MI)
Progressive Policy Institute (PPI)
More information about these proposals may be found on the Peterson Foundation’s website.
The Academy’s Ongoing Focus on Social Security
As we noted in the Academy’s 2017 Report to the New Leadership and the American People on Social Insurance and Inequality: “To continue to provide adequate benefits over the long term, reforms will be needed.”
The Academy continues to focus on Social Security in many ways.
Our website contains a robust collection of Social Security materials, which we update regularly.
Our “outside the Beltway” forums over the past year have featured Academy Founding Board Member Henry Aaron’s Social Security plan as a framework for discussing policy options to restore the program to financial soundness.
We produce an annual Issue Brief, Social Security Finances: Findings of the 2019 Trustees Report.
Our 2019 Annual Policy Conference, Regenerating Social Insurance for Millennials and the Millennium, included a panel on “Social Security Across the Lifespan: Addressing Misconceptions among Young People.”
We conduct an annual Summer Academy for Interns and Young Professionals, Demystifying Social Security. This year’s will be held on August 13th from 8:30 am to 4:30 pm. Please encourage people in your network to attend.
Our Concept Paper, Assured Income, published in April, includes a section on how Social Security might provide a vehicle for delivering some form of assured income to all Americans.
In collaboration with AARP, we are conducting a Social Security Policy Innovations Challenge. The Challenge is focused on workers with limited employment opportunities who lack the financial security to postpone claiming Social Security benefits until they reach full retirement age. Awardees will be announced soon.
Looking Ahead
In collaboration with Matthew Greenwald & Associates, we will be conducting an update to our 2014 survey and report, Americans Make Hard Choices on Social Security: A Survey with Trade-Off Analysis. We expect to release our new survey findings in early 2020.
As always, we welcome your comments, suggestions, and questions about the Academy’s Social Security activities, as well as any other aspects of our policy work.
Please send them to me at warnone@nasi.org.
All Comments
The amount of workers' earnings subject to Social Security taxes is capped each year (called maximum taxable earnings). The federal government increased the Social Security cap significantly for 2020. In 2019, the maximum earnings subject to Social Security taxes was $132,900. The 2020 cap is $137,700.
Why is there a cap? Those who make more can afford to pay into the SS system. Without a tax those making $500,000, or $10,000,000, or more would be taxed. A cap makes no sense and actually those paying in making less than $137,000 are proportionally paying a greater share than those making more than $137,000.
— Steve on February 16, 2020
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