Keep Social Security intact
To ensure that Americans are able to retire with security and dignity, government must keep Social Security intact. Even if it requires raising taxes or reducing spending on other government programs, the promise of income security in retirement years must be honored. It is immoral and unthinkable to arbitrarily reduce benefits to older Americans because of the pressures created by a large number of individuals in the baby boom generation. In any case, maintaining this program over the long run requires only modest adjustments of revenues and expenses.
What Should be Done?
Keep Social Security benefits and eligibility criteria intact. Make technical adjustments in the cost-of-living formula to more accurately reflect inflation. Make minor adjustments to raise revenues such as increasing the earnings on which workers pay Social Security taxes, and taxing Social Security benefits the same way other retirement income is taxed. Take measures to accelerate economic growth, which will increase revenues for retirement programs.
Arguments For This Approach
Social Security represents a right and a promise. Everyone who has paid into this program, regardless of income, deserves coverage. The best way to maintain public support for Social Security is to continue to cover all of the elderly, regardless of need. Social Security goes a long way toward keeping older Americans financially independent. If benefits were cut back, many retirees would be forced to live with their families or go on welfare. Providing assistance to individuals who can no longer work or provide for themselves is one of the fundamental responsibilities of government. Older Americans need these programs now more than ever, since private pensions are shaky and many have saved less than they will need in retirement.
Arguments Against This Approach
It's unrealistic to think that rapid economic growth will provide enough taxes to sustain benefits at current levels. Public policy should be based on prudent forecasts, not wishful thinking. No one has a right to any specific level of benefits. Today, retired Americans get benefits two to five times greater than the amount they and their employers paid into the system, even allowing for inflation. Unacceptably large tax hikes will be necessary if the cost of benefits for retirees keeps rising. The federal deficit cannot be controlled without restraining spending for Social Security. The promise of substantial retirement benefits has lulled many Americans into a false sense of security and diverted them from the habit of saving.
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