Debt Crisis: Social Security Reform

It is obvious from the start, and painful to accept, that we must reform and cut Mandatory/Social Entitlement spending. Mandatory or Social Entitlement Spending is Social Security, Medicare, and Medicaid. All three programs take up more than 41% of the Federal Budget¹. It is obvious that if you want to put a dent in the deficit and debt, you will have to make cuts and reforms to Entitlement Spending. Social Security alone takes up 19% of the federal budget¹ and is the largest section of our budget. According to the Congressional Budget Office (CBO), Social Security is predicted to run out of funds completely by 2039 and is considered to be unsustainable².

The best solution for reforming and fixing Social Security is increasing the retirement age. This by far is the best solution to make Social Security permanently solvent. In combination with the increase in the retirement age, preserving Social Security benefits for those ten years within the retirement age (55 or older) is also a great solution. Offering workers under the age of 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees, is also a great solution. Sound familiar? These solutions are in the old Paul Ryan Plan³. Another good solution would be to deny Social Security benefits to those making more than $100,000 dollars a year. The people who truly depend on Social Security do not make more than $100,000 dollars! It’s like offering welfare to Bill Gates; it isn’t necessary and it’s a waste of money! With that said, raising the retirement age for Social Security is the best solution. The average life expectancy of American citizens has gone up, and will continue to go up with the advent of future medicine and technologies. It’s time we raise the retirement age, to help make Social Security permanently solvent. The solution to also allow workers under 55 to invest their FICA taxes into IRAs, or personal retirement accounts, is also a great solution. We have to reform Social Security to save it, whether we like it or not. It’s a hard pill to swallow, but I can personally say the solutions I mentioned are a lot better than increasing FICA taxes or Individual Income Taxes to pay for the growing, unsustainable costs of Social Security. Raising revenues will not solve the problem – Social Security is insolvent and unsustainable and it needs to be reformed. It’s a spending problem, not a revenue problem.

Sources:

1. .  ”Revenues, Outlays, Surpluses, Deficits, and Debt Held by the Public, 1969 to
2008.” Congressional Budget Office. Federal Government, n.d. Web. 9 July
2011. http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-31-2012_Outlook.pdf

2. “CBO Budget Outlook.” Congressional Budget Office. Federal Government, n.d. Web.
9 July 2011. http://www.cbo.gov/ftpdocs/115xx/doc11579/06-30-LTBO.pdf

3. A Road Map to America’s Future. GOP Republican Budget Committee, n.d. Web. 9
July 2011. http://www.roadmap.republicans.budget.house.gov/Issues/Issue/?IssueID=8521