How Social Security Can Be Strengthened Without Cutting Benefits

How Social Security Can Be Strengthened Without Cutting Benefits

In the debate over Social Security’s funding, much of the debate has focused on benefit cuts. A recent survey by the National Academy of Social Insurance (NASI), however, shows that benefit cuts aren’t supported by a large majority of survey participants. Those who participated in the survey agreed on a package of changes to strengthen Social Security that doesn’t cut benefits.

NASI’s survey used an innovative trade - off analysis approach to learn what Social Security changes Americans favor and are willing to pay for. Trade - off analysis is commonly used in market research for product development. It determines the effect of decreasing one or more key factors and simultaneously increasing one or more other key factors in a decision, design or project. More than 2,000 Americans over the age of 21 participated and 87% percent of respondents said they are registered voters.

Majorities reported that:

  • They don’t mind paying for Social Security because they value it for themselves.
  • They are willing to pay more for Social Security, if necessary, to keep the program strong.
  • They believe we should consider increasing future Social Security benefits.

            The survey found that rather than keep the Social Security status quo, 71% of respondents prefer the following package of changes:

  • Gradually, over 10 years, eliminate the cap on earnings that are taxed for Social Security. This would mean that the approximately 6% of workers who earn more than the $118,500 cap in 2015 would pay into Social Security throughout the year like other workers. In return they would get slightly higher benefits.
  • Gradually, over 20 years, raise the Social Security payroll tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year, matched by the employer.
  • Increase the Social Security cost-of-living adjustment (COLA) to reflect the inflation experienced by retirees.
  • Increase Social Security’s minimum benefit so that workers who pay into Social Security for 30 years can retire at 62 or later and have benefits above the federal poverty line (currently $11,770 in annual income for individuals).

The report stated that the four changes together would eliminate 113% of Social Security’s projected long-term financing gap. The majority of participants, who included all income levels, and political party affiliations, preferred the package of changes. “This survey reflects similar findings to surveys conducted by TSCL,” says TSCL’s Executive Director Shannon Benton. We hope that this survey can serve as an outline for a plan to strengthen Social Security without having to rely on benefit cuts,” she states. “We encourage our readers to share the findings of this study with your Members of Congress,” Benton adds.

Click here to learn more about the NASI survey.

 

Sources: “Americans Make Hard Choices on Social Security: A Survey With Trade-Off Analysis,” National Academy of Social Insurance, October 2014.

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