Social Security Solvency—Now

By – Arthur Katz

Tough issues, like tough nuts, crack hard. Social Security and entitlement reform, while assuring seniors that they will receive the benefits of hard work, is one such issue. Here, in Bergen County, we older Americans are watching closely what the US Congress—especially Congressman Garrett and Senators Booker and Menendez—do to preserve Social Security this session. And we have a suggestion.

Today, we need action from Congress, a real solution—or first step—toward keeping Social Security viable. So, with the 114th Congress in full swing, there is a new idea in town, a real solution, a chance to guarantee the efficacy and solvency of Social Security broadly, and this program specifically. Various components of that solution are gaining favor, and all are being personally briefed to Congress by the Association of Mature American Citizens (AMAC), a 1.2 million-strong group of senior citizens.

The high level briefings are to the right people, with the right numbers and with a genuine aim of getting new approaches discussed, legislated and ultimately made part of the law. The briefings have been across the board, to Democrats and Republicans, including to the Ways and Means Committee Chairman Paul Ryan, Budget Committee Chairman Tom Price and Social Security Subcommittee Chairman (and legendary POW) Sam Johnson. Again, the door is opening.

So, as we worry about the turn of seasons here in Bergen County, there is another change afoot in Washington. It will take effort and pressure from all older Americans to elevate this issue—but we must refocus now on entitlement reform, beginning with keeping Social Security solvent in both a fair and fiscally responsible way. No more shell games, procrastination or scripts that set one portion of the nation against another. Let’s get down to brass tacks.

Specifically, since it will affect our lives here in Bergen County, we want a solution that addresses the incontrovertible facts. Today, an aging population receives benefits from a declining workforce, and it is only going to get worse, creating a slow-motion collision. Benefits going out will outpace receipts on Social Security Disability Insurance by the end of 2016, while the other entitlement programs will grind toward broke at various times beyond that. Make no mistake; we will feel that grinding—the shake of an empty can—in Bergen County.

To get beyond this reality, Congress must follow the fiscal compass to true north, which involves adopting a rescue plan such as the AMAC blueprint. That essentially boils down to this: Without raising taxes—something employers and employees cannot afford—we must guarantee a cost-of-living increase every year for everyone, adjusting COLA rates based on income levels so that low-income individuals receive more than high-income workers, while raising the age of early retirement to 64 and full retirement to 69.

Here is the kicker: There is also a way to allow all retirees to enjoy the benefits of the free market. Recognizing that Social Security was never intended to be the sole source of income for retirees, the AMAC approach adds a voluntary, tax-deductible Early Retirement Account (ERA) to complement the other major components of the Social Security Guarantee.  This creates a “best of both worlds” option for all future American workers.

How? Workers who contribute to an ERA over the course of their careers—which cannot be accessed until age 62, or upon death or total disability—would have a true lockbox of money on which they could rely during retirement. ERA funds would be invested in guaranteed, low-interest-bearing accounts or annuities and in secure companies, like those included in the S&P 500, for best possible returns.

Opening this discussion with local members of Congress—demanding some accountability in a program we all depend upon and that must be preserved—is only the start of the process. AMAC is committed to assuring that benefits stay equitable, available and sufficient, while also committed to keeping our country solvent over the long term. If this is not done now and by us—or by our representatives—then when and by whom? Surely we can and should expect our members of Congress to do more than “admire the problem.”

AMAC, which already has 4,432 committed members in this congressional district is right: This is an issue whose time has come, and this is the time to resolve —not just talk about—the entitlement insolvency crisis. Like it or not, this crisis will impact us here, in Bergen County. So let us go and meet it in Washington first.

Arthur Katz, a Teaneck resident, is a delegate for AMAC, a senior advocacy organization representing 1.3 million mature Americans. He can be reached at [email protected].

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