Senate Sped Up Social Security Insolvency
Not too much to say here. They did vote on the WEP and the GPO. They passed it. I get the impression the politicians are going to take advantage of the elderly and not pay more into the SS Fund. A few years back it was easy enough to fix with a tweak of an increase in withholding. It still would not take much to keep it solvent with no reductions. This is possible in spite of those who take exception to what has been proposed multiple times at Angry Bear. Insolvency does not need to be the end result.
Senate Will Soon Voted on Speeding Up Social Security Insolvency, Committee for a Responsible Federal Budget
Senate Majority Leader Chuck Schumer (D-NY) announced yesterday that the Senate would vote on the Social Security Fairness Act. This act passed the House in November. This bill repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The two policies that reduce Social Security benefits for those who are otherwise eligible for non-Social Security government pensions. The Congressional Budget Office estimates that enacting this bill would hasten Social Security insolvency by six months and add $196 billion to deficits over a decade.
Because of the advanced insolvency, we estimate that repealing WEP and GPO would reduce lifetime Social Security benefits by $25,000 for the typical couple retiring at insolvency, including more than $8,000 in the first year alone.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
It is truly astonishing that at a time when we are just nine years away from the trust fund for the nation’s largest program being completely exhausted, lawmakers are about to consider speeding that up by six months. And add on top of that another $200 billion in new borrowing as a result. We are racing to our own fiscal demise.
Even worse is that repealing WEP and GPO does nothing to address windfalls they are intended to eliminate. Instead, it just restores windfalls for folks who have other government pensions. What an incredulous set of events.
Hastening Social Security’s insolvency will only make its consequences worse; benefits will be cut by an additional 1 percent while reducing lifetime benefits for a typical couple by $25,000. We should be talking about how to prevent this cut, not make it bigger and happen sooner.
The Senate should reject WEP and GPO repeal. Instead, they should come together to try to fix the issues with WEP and GPO as part of a comprehensive package to strengthen Social Security, prevent insolvency, and make the program’s finances sustainable over the long term.
Matt Klucher, [email protected]
It isn’t that they can’t see the solution.
It’s that they can’t see the problem.
~ G. K. Chesterton
This was what was wrong with the Northwest Plan. The solution was fine when it was proposed. Today, of course, the tax increase numbers are anachronistic. Yes, the math for the solution could be tweaked to achieve solvency.
But the core problem was unaddressed by all the fine language. It was obviously politically infeasible from the get-go, and politics is ultimately what matters. There was, and still is, no appetite to increase SS taxes. Full stop.
Increasing taxes needs to be kept within the Overton by continuing to discuss the problem it solves and why it is a viable solution.
Arne:
Even today after missing the 10-year window, a small increase would suffice though greater than what could have been.