Commentary: Nancy J. Altman — Social Security’s future question of values, not affordability

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Social security is conservatively funded and managed. It has no borrowing power and cannot issue deficits. To ensure that all benefits can be paid in full and on time, the Social Security Board of Trustees reports annually to Congress, projecting the program’s revenues and expenses over three-quarters of a century. That’s a longer valuation period than private pensions or most other countries expect for their counterpart programs.

When such a long timeframe is used, projections will sometimes show inadvertent surpluses or deficits. Unsurprisingly, Social Security administrators are reporting a manageable deficit more than a decade away. It must be closed by increasing the specific income of the Social Security.

A much-cited and popular approach is to do away with the income cap against which Social Security contributions are assessed. Currently, most employees contribute to Social Security throughout the year. But the highest-paid workers stop contributing after their earnings hit the cap — $147,000 in 2022. Depending on how quickly the cap was phased out and how much the extra contributions are credited for future benefits, eliminating them would significantly close the shortfall.

It is important to restore social security to a long-term actuarial equilibrium. But it is simply a means of providing economic security to working families. The first question should be whether the benefits are large enough. Only the second question is how these benefits can be financed fairly.

Social Security is more universal, safer, fairer and more efficient than its private sector counterparts. The only shortcoming is that the benefits are too low by almost any measure. Due to insufficiently low benefits and the disappearance of private sector pensions, the country is facing a pension income crisis. Reducing already low Social Security benefits would exacerbate that crisis.

While abolishing the cap on Social Security contributions is both popular and healthy, it is critical to recognize that the highest paid workers will simply have to pay the same rate on all their earnings as 94% of all workers, including the lowest paid, now do . Currently, progressive income, with the wealthy paying a higher percentage, makes up only 3% of total Social Security committed income. Additional progressive income should be spent on Social Security.

The country faces rising, destabilizing income and wealth inequality, a development President Barack Obama called “the defining challenge of our time.” Among the other drawbacks, rising inequality has cost Social Security billions of dollars in revenue each year due to increasing revenues exceeding the Social Security limit. Expanding modest Social Security benefits while requiring the wealthiest to pay more is a solution not only to the pension crisis and the economic strain on working families, but also to inequality.

There are plenty of options. The late Robert M. Ball, the longest-serving Social Security Commissioner and widely recognized as the foremost expert on our nation’s Social Security system at the time of his death, suggested that the estate tax should be spent on Social Security. Other possibilities include a financial transaction tax, a wealth tax, and a surcharge on incomes over $1 million.

Comprehensive social security is undoubtedly completely affordable. The cost of social security as a percentage of gross domestic product is close to a level line for the next three-quarters of a century and beyond.

Whether benefits should be increased or decreased is a matter of values, not affordability. Fortunately, as polarized as the nation is on many issues, polls show Americans overwhelmingly agree that Social Security should be expanded, not cut. They also agree that the wealthiest, who have benefited greatly, should pay more for the common good.

This is also the best policy.

Nancy J. Altman is president of Social Security Works and chair of the Strengthen Social Security Coalition. She wrote this for InsideSources.com.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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