How Congress Can Protect Beneficiaries and Strengthen Social Security
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Social Security supporters rally at the Senate in March 2011. (Photo by Chip Somodevilla/Getty Images)
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Millions of Americans—including retirees, people with disabilities, and those who have lost a family member—rely on Social Security to meet their basic needs. But as the Old-Age and Survivors Insurance (OASI) trust fund reserve depletes, policymakers are casting doubt on the bedrock social program’s viability—leading Americans of all ages to lose faith that it’ll be there for them. In a new brief, Roosevelt’s Stephen Nuñez explains that this so-called crisis is overblown. In fact, we’ve been here before. As long as lawmakers choose to act in the public interest, Congress can not only ensure Social Security’s long-term fiscal health, but strengthen the program.
Social Security is facing a fiscal shortfall, but it’s not because benefits are too generous, as some lawmakers may lead the public to believe. The program is fiscally constrained as written—funds must come from payroll tax revenue, and not borrowing. The depleting reserves are the result of a breakdown in payroll tax revenue, as income gains increasingly flowed to the highest earners over the ’90s and 2000s—many of whose earnings are not subject to Social Security taxes because of regressive taxable income caps—and as the Great Recession further weakened the tax base.
Reforms that directly address these drivers can ensure Social Security’s long-term viability. If the problem is that there isn’t enough revenue and that’s partly driven by rising inequality, the solution is not to worsen inequality by asking beneficiaries to give up benefits while high earners remain shielded from contributing more as the economy grows. It’s to get rid of regressive tax caps and consider alternative sources of revenue, such as taxing workplace benefit packages.
Older Americans, and all Americans, should be able to trust that Social Security will be there to ensure economic stability, empowering them to enjoy a dignified retirement after a lifetime of work. Since 1935—when Franklin D. Roosevelt signed the program into law—our government has maintained that promise. It can and should continue to do so in the future.
Read the brief: “Will Social Security Run Out?” Is the Wrong Question: How Lawmakers Can Protect Beneficiaries and Strengthen OASI
And check out the companion fact sheet: What’s Actually Behind Social Security’s Trust Fund Shortfall
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