Jun 7, 2011

We've Already Cut Benefits

From a press release:
Changes enacted by Congress in the 1980s to ensure the long-term solvency of Social Security will cut retirement benefits by 19 percent for workers born in 1960 and later, and more cuts could undermine the basic economic security of future retirees, a new report said today.
The report, released by the National Academy of Social Insurance, said modest benefit improvements and revenue increases are affordable, have broad public support and can close Social Security's long-term financing shortfall without more benefit cuts.
"Social Security benefits are already being cut more than many people realize," said Virginia Reno, NASI's vice president for income security and a co-author of the report. "Cutting benefits further is not necessary to preserve Social Security for future generations. Other alternatives merit consideration by policymakers."
NASI is a nonpartisan organization made up of the nation's leading experts on social insurance. 
As policymakers consider calls for further retirement benefit cuts, the NASI report said it is important to remember that the Social Security amendments passed by Congress in 1983 relied far more on benefit cuts than new revenue to balance the system's long-term finances. Those amendments changed Social Security by:
  • Gradually raising the full-benefit retirement age from 65 to 67, a change that results in a 13.3 percent reduction in benefits.
  • Taxing part of benefit income, which results in a 5.1 percent benefit cut.
  • Delaying the cost-of-living adjustment by six months, resulting in a permanent 1.4 percent cut.

1 comment:

Don Levit said...

The 1983 amendments should have recognized revenue as just as important as benefit cuts in order to keep SS solvent.
If that was the case, the excess payroll taxes and interest would have been invested in order to provide a true sinking fund which can be liquidated without raising new monies, when tapped.
Maybe even benefits could have been spared, rather than cut.
Don Levit