Day: November 14, 2010

The Debate Over Social Security’s Future And The Fiscal Responsibility and Reform Commission

The President’s Fiscal Responsibility and Reform Commission, headed by Erskine Bowles, Chief of Staff for President Bill Clinton, and former Republican Senator Alan Simpson, came up with a statement last week, three weeks before the Commission’s official report on December 1, calling for radical changes in the way the nation looks at the deficit crisis that the country faces in its future.

The immediate reaction was for harsh denunciation by ideological forces on the left and on the right, condemning any suggestions that were made by the joint heads of the Commission.

There is much to be chewed over about the recommendations, but it was surprising that so much attention was paid to the Social Security portion of the recommendations.

Bowles and Simpson both promoted the idea of raising the amount of income taxed for Social Security, which is presently $106,800, to much higher levels, with Medicare, as it is, having no limits on being taxed on incomes. Also, in the year 2050, the age limit would be 68, and in 2075, would rise to 69, in order to keep Social Security solvent.

All of the above makes sense, as one forgets that in 1983, by bipartisan agreement between Republican President Ronald Reagan and Democratic Speaker of the House Thomas”Tip” O’Neill, and the support of the Republican Senate and Democratic House of Representatives, the retirement age for full Social Security was raised for those born after 1940 to age 66, and for those born after 1960 to age 67.

So what is so radical about the proposals set forth by Bowles and Simpson, but one would think it was extremism, based on the reaction by political forces that seem unwilling to compromise! 🙁

This is the problem today, as compared to nearly thirty years ago, that there is no willingness to compromise in any form by either side of the political spectrum! 🙁

Think about what the above reform suggests: So people born after 1980 will have to wait to age 68 to collect full Social Security benefits, and would have notice FORTY years ahead!

And people born after 2005 would have to wait to age 69 to collect full Social Security benefits, and would have notice SEVENTY years ahead!

And realize that age longevity and health have improved, and anyone could still collect lower benefits as early as age 62!

And if the income limit is raised, Social Security will survive for the long run, and be well funded by these changes!

And in no case, can anyone expect that they will survive on Social Security benefits, so part of the plan for life is to SAVE early and responsibly for one’s retirement in the long run!

This plan is NOT extreme! Instead, it is totally responsible and MUST be adopted if Social Security is to prosper in the long run!

It is time to stop ranting and raving on both sides of the political spectrum, and to recognize the validity of these proposals set forth by Bowles and Simpson!