Social Security has been a quiet subject for Republicans since the
collapse of President Bush’s reform efforts in 2005. In the late 1990s
and early 2000s, Republican Members of Congress were seemingly lining up
to present new plans to fix Social Security’s long-term funding
shortfall, currently estimated at over $11 trillion. Since Bush’s plan
failed to pass even a Republican-led Congress, however, many in the GOP
have left the field to progressives who seek to expand Social Security
benefits, even at the cost of the program’s solvency.
Today, however, Rep. Sam Johnson (R-TX), the chairman of the House Social Security subcommittee, has introduced a Social Security plan that would address solvency concerns while also taking steps to make the program work better for participants. It’s a complex plan, so it might be easiest to explain by breaking it down into its functional components.
Solvency: While there’s more to Social Security reform than simply keeping the system from going broke, a program that can’t pay what it promises isn’t much good to people. To address the solvency side of the problem Johnson’s plan takes a number of steps. First, the plan would gradually increase the normal retirement age, reaching 69 for people born in 1968, who will retire in the mid-2030s. Second, the plan alters the basic Social Security benefit formula in such a way that benefits are progressively and gradually reduced for roughly the top half of retirees. Third, the plan would base Cost of Living Adjustments on the so-called “chain-weighted CPI.” On top of this, high income retirees – singles with retirement incomes above $85,000 and couples above $170,000 – would not receive a COLA. Fourth, the plan would limit the size of spousal benefits for higher-income retirees. Currently, the non-working spouse of a high-earning retiree can receive a higher monthly benefit than a low-income person who worked and contributed to the program all their life. Together, these changes would be sufficient to make Social Security solvent for 75 years and beyond.
http://www.forbes.com/sites/andrewbiggs/2016/12/08/at-last-a-new-social-security-reform-plan/#7fe495428d1d
Today, however, Rep. Sam Johnson (R-TX), the chairman of the House Social Security subcommittee, has introduced a Social Security plan that would address solvency concerns while also taking steps to make the program work better for participants. It’s a complex plan, so it might be easiest to explain by breaking it down into its functional components.
Solvency: While there’s more to Social Security reform than simply keeping the system from going broke, a program that can’t pay what it promises isn’t much good to people. To address the solvency side of the problem Johnson’s plan takes a number of steps. First, the plan would gradually increase the normal retirement age, reaching 69 for people born in 1968, who will retire in the mid-2030s. Second, the plan alters the basic Social Security benefit formula in such a way that benefits are progressively and gradually reduced for roughly the top half of retirees. Third, the plan would base Cost of Living Adjustments on the so-called “chain-weighted CPI.” On top of this, high income retirees – singles with retirement incomes above $85,000 and couples above $170,000 – would not receive a COLA. Fourth, the plan would limit the size of spousal benefits for higher-income retirees. Currently, the non-working spouse of a high-earning retiree can receive a higher monthly benefit than a low-income person who worked and contributed to the program all their life. Together, these changes would be sufficient to make Social Security solvent for 75 years and beyond.
http://www.forbes.com/sites/andrewbiggs/2016/12/08/at-last-a-new-social-security-reform-plan/#7fe495428d1d
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