With a Republican troika in place after Nov. 8’s election — the GOP in control of House, Senate and White House — among the first far-reaching proposals being mentioned are how to reconfigure Social Security and Medicare.
Social Security is actuarially solvent until 2034 with current statistical input; Medicare to 2028.
Many fixes will be mentioned, including privatization. A simple one for both is at hand; one mentioned a number of times by the Register — to do with income, age and wealth of recipients.
First, income would increase enough to keep Social Security in the black for a good while longer if the threshold for collecting taxes were increased, or if the tax itself were bumped up a notch or two. As of today supportive taxes are collected until income reaches $118,500. If that were doubled, the revenue flow would jump accordingly.
Another taxing approach would be to create a tiered system. Continue to collect on the first $118,500, give taxation a vacation and revisit taxes at some point after income reaches a higher amount, perhaps $1 million. That would be particularly effective in cases such as entertainment and professional sports where incomes are outlandish. Or for many CEOs and others who are paid excessive and gaudy amounts.
When Social Security was instituted in 1935 by President Franklin Roosevelt, retirement age was a lofty 65 with life expectancy at birth 58 for men, 62 for women. Now, on average, life expectancy is nearly 79.
Age for full benefits from Social Security has increased to 67, just two years in 81-plus years, and in any sense of fairness should be higher.
Rep. Sam Johnson, Texas Republican, has proposed gradually increasing retirement age to 69. To be honest, it should be higher, or reach a higher age quickly.
The third factor that would help “save” Social Security is to make means testing a part of the formula.
If a person earns a great deal of money during his or her lifetime, or has accumulated wealth in a retirement plan, the calculus for determining Social Security benefits should take those things into consideration.
For someone whose wealth permits an exceedingly comfortable life for perpetuity, is a dab of Social Security benefit really necessary?
Similar arguments may be made for Medicare.
Then, there’s Medicaid, a horse of another color, which has had its eligibility and reach become political gamesmanship to the great detriment of a multitude of very deserving folks.
EMERSON LYNN, JR., who wrote Register opinion pieces for nearly five decades, refused Social Security payments until they were forced on him. He authored several editorials that suggested the same three-legged approach to keeping the federal retirement fund solvent, back when adoption would have made huge a difference to Social Security, and we’d be looking further down the road at solvency.
