“Social Security Solutions” is a series that explores the pros and cons of several current proposals to try and save Social Security. All statistics listed here are from the Heritage Foundation, the National Academy of Social Insurance, and the AARP.
Cover all newly hired state and government workers
-Currently, 25% of government employees are not on Social Security. They are on other plans that are unique to government employees. This includes workers on both the federal and local level of government. There is a proposal to put them onto Social Security, which would put more workers into the system. This would only affect new hires into the government, so that current employees could keep their current plans. Proponents argue that the system works best when it is covering everyone, while opponents say that it won’t really do much to address the problem. Also, those workers added onto the system would eventually need to be paid benefits, as well. This measure could fill 8% of the funding gap.
Benefit improvements
Certain groups have extremely low benefits, such as the disabled, or families of the deceased. Almost all parties agree that these groups need more benefits. Certain groups, however, say that any changes to the system must address these groups. The issue, however, is that adding more benefits will only make the nest egg run out, faster. Benefits for these groups can only happen alongside other reforms.
Increase the number of years used to calculate initial benefits
Currently, workers must work for at least 35 years to qualify for Social Security retirement. The formula of benefits is based on that concept. This is true in all cases, unless injury or death occurs. There is a proposal to raise this number to 38 years. This would mean that there is more earnings in the system, and less benefits being paid out. Proponents say that most people are working longer, but opponents say this hurts low-income workers, who may have more physically demanding jobs. This proposal could fill 13% of the funding gap.
Begin means-testing social security benefits
Social Security pays benefits to everyone who pays in, regardless of their income. Receiving benefits is only dependent on work and age requirements. There is a proposal to change this and incorporate a means-test. This would reduce or eliminate benefits for higher incomes.Proponents say that it is pointless to give higher income earners Social Security benefits, since they don’t need them. Opponents, however, say that Social Security is an earned right, not welfare. These Americans already paid their way in, and it’s not fair to deny them benefits. At its most extreme, it could fill 11% of the funding gap.