The month of April really flew by! Do you know that April is National Social Security Month? Social Security is the most popular and successful government program in American history. Before it, half of senior citizens lived in poverty. Today, that rate has plummeted to 10 percent.
As corporations continue slashing retirement benefits and pensions, and as the gap between the wealthy and the rest of us continues to widen exponentially, the program is more vital now than ever. According to the Economic Policy Institute (EPI), almost half of families have nothing saved for retirement. The median family retirement savings is just $5,000, and the median for families with some savings is just $60,000.
In fact, half of Americans 55 years of age and older have nothing saved for retirement, although they are quickly approaching their elderly years. The truth is, many Americans simply cannot afford to save for retirement. We should not even entertain the thought of cutting Social Security. Instead, we must protect it and expand it.
Talk of the program’s “going broke” is largely politically-motivated nonsense. In fact, per AARP, Social Security currently operates at a surplus of $2.8 trillion. As the program stands now, full benefits can be paid to the elderly and disabled through 2034. If Congress does nothing to shore up the system by 2034, the program can still pay out 79% of promised benefits through 2090.
Social Security is funded through a payroll tax earmarked only for that purpose. (You see it on every paycheck stub.) Unfortunately, the government keeps “borrowing” from that fund when it shouldn’t—for example, to fund regime change wars abroad, risking the economic future of our workers here at home.
Not only must we stop borrowing from funds collected specifically for Social Security, but we must raise the taxable income cap on Social Security. The 2018 limit is $128,400. That means, the amount of taxes you pay into Social Security this year stops increasing after $128,400. In other words, someone making $128,400 pays the same amount into Social Security as someone making $150,000, $250,000, or even $100 million.
Senator Bernie Sanders has introduced legislation to lift this taxable income cap. It would extend the solvency of Social Security for the next fifty years, expand average benefits by $65 per month, raise minimum benefits paid to seniors, and increase cost-of-living adjustments.
Also, we must not continue raising the retirement age on Social Security. In the richest nation in the history of the world, not only do Americans deserve to retire, but they deserve to enjoy their retirement. Furthermore, many millions of Americans work with their hands and therefore, are often limited in terms of working age.
I encourage you to learn more about Social Security—and to sign up for your own “My Social Security” account. It tracks your annual taxable earnings, and shows you how much you are slated to receive if you retire early or at full retirement, or if you were to become disabled.
We aren’t technically “borrowing from Social Security”. Instead of the trust fund sitting in a vault in cash, it sits in a vault as treasury bonds. Those bonds are only slightly less liquid than cash and can be sold on the bond market.
Those bonds are US debt, but they have value. I think that in the past few years we have actually started to sell those bonds, as expenditures exceeded receipts. That may have been a temporary situation, but soon will be the norm.
Aside from that, this is right on. We really need to lift the cap and possibly extend the tax to other forms of income that tax-savvy people have been using for living expenses to avoid the tax.
That someone making $128,400 pays the same amount into Social Security as someone making $100 million is one of the least understood facts of the modern era. Tax all types of income and tax it at a higher rate.
It is important to ask our Federal delegation where they are on fixing Social Security — especially a plan to eliminate the cap.