A White House-created commission is considering proposals to raise the retirement age and take other steps to shore up the finances of Social Security, prompting key players to prepare for a major battle over the program's future. ...
In addition to raising the retirement age, which is now set to reach age 67 in 2027, specific cuts under consideration include lowering benefits for wealthier retires and trimming annual cost-of-living increases, perhaps only for wealthier retirees, people familiar with the talks said. ...
On the tax side, the leading idea is to increase the share of earned income that is subject to Social Security taxes, officials said. Under current law, income beyond $106,000 is exempt. Another idea is to increase the tax rate itself, said a Democrat on the commission. ...
"Are Republicans willing to sign onto a tax increase, and are Democrats ready to sign onto a benefit cut? I think the answer is probably yes in both cases if the other is willing to do it," said Alice Rivlin, a Democrat and former White House budget director.
Update: The Wall Street Journal article suggested that the American Association of Retired Persons (AARP) might be willing to consider accepting Social Security benefits cuts. AARP has issued a press release rejecting any benefit cuts as part of a deficit reduction package. However, the press release leaves open the possibility that AARP might not oppose benefit cuts to "address Social Security's long-term financing."
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ReplyDeleteI note the statement that the AARP is "willing to make a deal" on benefit reductions through raising the retirement age.
ReplyDeleteWho died and left them in charge? AARP mainly sells insurance these days and had a lot to do with the Medicare Advantage fiasco by agreeing to the concept. They stood to gain mightily from Advantage plans and did well on the business thus created. This makes me wonder what benefit they see in reduced retirement benefits. They wouldn't be so amenable to a clearly bad deal for ordinary retirees if there weren't something in it for them.
Of course, the Catfood Commission can make deals with whomever it wishes, but Congress has to vote any proposals up or down. This is a good time to make sure our congress people know what we think about this issue. Anything the WSJ writes about so approvingly is not good for the ordinary beneficiary. Nancy Ortiz
They keep referring to raising the retirement age. All they are doing is raise the age at which full benefit are payable. Even once the full retirement age (FRA) hits 67, you can still apply at age 62 for a reduced benefit.
ReplyDeleteNot sure if it would save more money, but why not raise the age at which you can apply from 62 to 64, rather than raising the FRA to 69?
Probably not going to save a lot, but every little bit helps, so do away with the ARF. If you work and go over the earnings limit and don't get benefits for some months, you are just out those benefits and get no adjustment of the reduction factor at FRA.