News/Commentary

Senators mull 70-yr-old retirement, quietly plan to revise Social Security before funds run dry

March 2, 2023 | | Print Article

A bipartisan group of senators led by Bill Cassidy, a Republican, and Angus King, an Independent who caucuses with Democrats, are currently working on devising a plan to potentially save Social Security.

As previously reported, Social Security is headed toward insolvency by 2033.

The plan currently in the works reportedly calls for, among other things, gradually raising the retirement age to 70, which would mean fewer new people collecting Social Security and Medicare payments each year.

“Other options on the table include changing the existing formula that calculates monthly benefits from one based on a worker’s average earnings over 35 years to a different formula that’s based instead on the number of years spent working and paying into Social Security,” according to Semafor.

And then there’s a proposal for a “sovereign wealth fund” that would be “seeded” with an initial $1.5 trillion investment and used to generate an 8 percent minimum annual return that would then be used to fund Social Security.

“If it fails to generate an 8% return, both the maximum taxable income and the payroll tax rate would be increased to ensure Social Security stays on track to be solvent another 75 years,” Semafor notes.

The goal, it appears, is to avoid raising taxes on the American people or cutting the benefits being enjoyed by current Social Security recipients.

“This is an example of two leaders trying to find a solution to a clear and foreseeable danger. Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. Indeed, many will receive additional benefits,” a spokesperson for both Cassidy and King told Semafor.

“All of the ideas on the table are the ones you would expect, but the thing that I like about these discussions is that there’s ideas on the table that nobody has talked about until now, but that have a track record of working, and that’s what I think is interesting,” Sen. Tim Kaine said in a separate statement to The Hill.

That said, not everybody is so keen on these ideas. In fact, even some on the right are crying foul. Take “moderate” Sen. Susan Collins.

“Sen. Susan Collins, R-Maine, shares King and Cassidy’s concerns about Social Security but had ‘serious reservations’ about the key elements of the plan, she said in a statement. Raising the age to 70 would be difficult for Mainers in physically demanding jobs, while the income of wealthy Americans would be largely untouched,” according to the Bangor Daily News.

“That strikes me as regressive and unfair,” she reportedly said in her own words.

Her perspective is shared by a large number of both Democrats and Republicans who also think raising the retirement age is unfair:

The problem is too many Americans want Congress to do NOTHING about Social Security, period. But if nothing is indeed done, then there will absolutely be cuts to Social Security distributions by 2033, at the latest.

“In other words, all retirees will suffer a Social Security benefit cut of 24%, starting in 2033. This would be a huge financial crisis for our nation,” CNBC notes.

“The average monthly check is about $1,400. For most retirees, it’s the majority of their income. If this situation isn’t averted, millions of retirees will lose their homes, be unable to pay for medicine and health care and suffer other financial challenges,” CNBC reported back in 2021.

The other option, of course, is to just raise taxes on everybody, but nobody wants that either…

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Vivek Saxena
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