Dear Member of Congress:
Onbehalf of the 362,000 members of the National Taxpayers Union (NTU), I urge youto support S. 804, the Social Security Solvency and Sustainability Act.Introduced by Senator Lindsey Graham (R-SC), this bill would eliminate theshortfall in the Social Security system, thereby maintaining its ability to servefuture generations of retirees without raising taxes
Social Security’s finances are becomingincreasingly tenuous. This year the program is projected to collect $45 billionless in payroll taxes than it will pay out in benefits. According to theCongressional Budget Office, annual deficits will continue to grow until theprogram’s deceptively-named “Trust Fund” is exhausted around 2037. All told,the Trustees for Social Security calculate that over the next 75 years theprogram will have an unfunded liability of $5.4 trillion. Without prudentchanges to the program now, reconciling that liability will entail ruinousdebt, punitive taxes, or sharp benefit reductions in the future.
Bygradually raising the retirement age, and introducing progressive priceindexing to the benefit formula, this bill is able to make Social Securitysolvent and sustainable without resorting to higher taxes. Although Congresshas altered its New Deal-era provisions through the years, Social Security hasnonetheless failed to keep up with the rapidly changing demographics andeconomics of modern society. Since the program first began paying regularbenefits, the average lifespan of recipients has increased by about 15 years,whereas the age at which you can collect benefits will be raised only 2 years, to67, by 2027. S. 804 would begin to address that lag through graduallyincreasing the retirement age to 70 by 2032. Furthermore, the bill ensures thatAmerica won’t find itself in a similar problem down the road by indexing theretirement age to increases or decreases in life expectancy.
The “SocialSecurity Solvency and Sustainability Act” also addresses a flaw in the benefit calculationthat threatens future retirees’ ability to rely on the program. Social Securityuses a formula that links a retiree’s benefit payment to increases in the wageindex. But since wages grow faster than prices, successive generations receivegreater benefits than those paid to earlier retirees. As a remedy to thissolvency problem, S. 804 introduces progressive price indexing that maintainsthe wage-based formula for any income up to $43,000, with further benefitsbased on price-growth. Such a change would return the system closer to theexpected benefit levels put in place prior to 1972.
NTUhas long argued that any Social Security reform should increase freedom, createownership of retirement assets, and terminate long-term unfunded liabilities.Although our ideal plan would empower individuals with more options for privatepersonal retirement accounts, this bill takes necessary steps towardoverhauling a program whose financial woes are already contributing to ourdeficit. NTU applauds the introduction of the “Social Security Solvency andSustainability Act” and we encourage all Members of Congress to work towardpassage of S. 804.
Sincerely,Brandon GreifeFederal Government AffairsManager