Social Security, the government entitlement that provides support to seniors in retirement, the disabled, and other Americans, has long been in the cross-hairs of budget reformers. The program’s trust fund currently won’t be spent out until 2033, and after that it would still pay 75 percent of scheduled benefits.
Most of the proposed solutions to the shortfall involve cutting back benefits and raising the minimum retirement age. Both are deeply problematic; at its current level of benefits Social Securitykept over 20 million peopleout of poverty in 2011, many Americans in demanding manual labor jobsalready takeearly retirement and thus reduced benefits as it is, and lower-income Americanshave notparticularly benefited from the average rise in lifespans .
This week, however, Sen. Mark Begich (D-AK) put forward a reform package that goes in the opposite direction, while still financially securing the program’s trust fund for roughly the next seven decades. The Washington Post’s Dylan Matthewslaid out the details:
The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax.In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap. […]
The Congressional Research Serviceran the numbersback in 2010 and concluded that eliminating the payroll tax cap — while also paying out the new benefits to wealthier Americans in accordance with their new taxes —would eliminate95 percent of the trust fund’s shortfall over the next 75 years.