Social Security Fix: Higher Taxes or Reduced Benefits
September 24, 2007
The president’s administration today released a report on the future of social security with the principal findings being that in order to ensure its continued solvency, taxes on benefits would either need to increase or benefits be reduced.
While this is surely an undesirable choice, it is one that should not come as a surprise considering that social security in itself has become an out-of-control program that has failed to evolve since its inception over 70 years ago.
In 1935, when the Social Security Act was adopted in America, the average life expectancy for a white male was about 58 years and the benefits-eligible age of the program was 65 years. It is clear that social security was never intended to be a financial program that all would enjoy, instead a protection for persons from “poverty-ridden old age” (President Roosevelt, 1934).
If social security had been properly adjusted over the years to account for the increase in life expectancy, the benefits-eligible age for today’s recipients would be 87 years; certainly an age that would have prevented many of the problems that are plaguing the system today.
Additionally, social security was designed to be a supplement to life savings, not a substitute. The dependency on social security further puts people at a disadvantage since many rely solely on this income to provide for them in their later years, especially when earned income from work is generally at its lowest level due to retirement.
CapitolWatch opposes unfair taxes at a time when Washington is ruled by private interests groups and encourages politicians on both sides of the aisle to re-evaluate their priorities and find a financial solution to this issue with current revenues. However, without taking the painful yet necessary step of significantly increasing the benefits-eligible age, social security will continue to face solvency issues well into the future.