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Calif. senators differ on Social Security fixes

Posted 9 years 93 days ago ago by newspaper editor    1 Comments  0 Likes Like Dislike

When it comes to shaping the future of Social Security, Sen. Dianne Feinstein says "everything should be on the table," including gradually raising the retirement age.

Sen. Barbara Boxer takes a different view. She is co-sponsoring legislation that would require a two-thirds majority vote before Congress could proceed with any legislation that would reduce benefits, increase the retirement age or transition the program to private accounts.

The different approaches from the two California senators demonstrate the divide among Democratic lawmakers about how to shape Social Security for the future as Congress considers ways to reduce the nation's debt.

Now that an agreement has been reached to fund the federal government through the summer, Congress is expected to consider more long-term challenges, possibly including a review of the entitlement program that serves more than 54 million people — nearly 18 percent of the U.S. population.

While Republicans are not offering a specific proposal on how to deal with Social Security, some Democrats are wary of the discussions taking place behind the scenes. House Republicans have a blueprint that would cut federal spending by $5 trillion over the next decade, partly through reductions in Medicare and Medicaid.

Meanwhile, a group of three Republican and three Democratic senators has embraced many of the recommendations made by a panel appointed by President Barack Obama to address the nation's long-term fiscal challenges. The president is scheduled to deliver a speech Wednesday revealing more specifics for reducing the country's debt, and advisers have signaled that he will propose changes to health care programs for the elderly and poor.

The bipartisan group is working on a plan to put the deficit commission's recommendations into legislation, including several related to Social Security. Among them:

_ A new benefit formula to slow the growth in future benefits, particularly for upper-income workers. A new minimum benefit would be created for low-wage workers, designed to ensure that benefits are at least 125 percent of the federal poverty level.

_ Higher payroll taxes for upper-income workers. Under current law, workers in 2020 will pay payroll taxes on earnings up to $168,000. Under the commission's recommendation, workers would pay payroll taxes on earnings up to $190,000.

_ A higher retirement age. Under current law, the age for full retirement is gradually increasing to 67 for people born in 1960 or later. The commission recommended increasing that age to 68 and then to 69 by about 2075. The age for early retirement also would rise from 62 to 64 during the same period.

Feinstein said she agrees with the commission's roadmap.

"I think the deficit commission did a great job," she said.

Feinstein said increasing the retirement age would not affect anybody currently receiving benefits and that the need for doing so is based on longer life expectancies and people staying in the work force longer. She said she wants to ensure the program is viable for those who need it most.

"If we do nothing, my understanding is that benefits drop 22 percent in 2037," Feinstein said. "If we make adjustments early, you can do it in a much more painless way."

But AARP, the advocacy organization for retirees, said there is little appetite for increasing the retirement age or for other benefit cuts among the general public.

"Pensions are shrinking, savings are shrinking, health care costs are going up, people are living longer. In other words, there is going to be more reliance on Social Security in the future than there is today," said David Certner, AARP's legislative policy director. "And nobody today thinks Social Security is overly generous."

Social Security benefits average about $14,000 a year, and millions rely entirely on it for income during retirement.

A survey taken in January by the Employee Benefit Research Institute, based in Washington, showed that nearly three out of every 10 workers had less than $1,000 in savings and investments. Nearly half of all workers had less than $10,000 in savings, excluding the value of their house or any pension.

The commission also recommended a hardship exemption for those unable to work. It said Congress should authorize adequate benefits to cover people who need to retire early for health reasons, about one-fifth of all those seeking early retirement.

Boxer said during a recent news conference that she is willing to address Social Security funding but rejected benefit cuts as part of the solution to sustain the program.

"We want to make it stronger out to 75 years, out to 100 years," Boxer said. "We're happy to engage in that conversation, but it is not adding to the deficit and should not be cut."

Boxer spokesman Zachary Coile expanded on her position in an email, saying the senator believes the best way to shore up Social Security is to "make sure the wealthy are paying their fair share."

Boxer's comments came during a news conference designed to show support for a bill by Sen. Bernie Sanders, an independent from Vermont, that would require a two-thirds majority before Congress could enact benefit cuts or transition the program to private accounts. Feinstein said she cannot support the legislation.

"I think there's an effort to create a situation by which it won't be touched. Then comes 2037, and people will say, 'Why didn't they do something before now?'" Feinstein said.

The trustees who oversee Social Security say trust fund reserves would be exhausted in 2037. At that point, tax income would pay about three-quarters of scheduled benefits.

With that date a quarter century away, some Democratic lawmakers say there is plenty of time to deal with Social Security funding, but Feinstein and others say it is unwise to put off tough decisions that are necessary to maintain the program for future generations.

"If we make adjustments early, you can do it in a much more painless way," Feinstein said.


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  • Frank Weinstein 9 years 85 days ago
    I understand Social Security OASDI is solvent until 2040. Is it true that Social Security funds are taken by the federal government to be used for other programs? If that's true, maybe that's part of the problem Social Security is facing. I'm not thrilled with Senator Feinstein's reaction. We need to understand that making the retirement age higher is a decrease to our standard of living.

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