Get Radical: Raise Social Security

[groovedaddy]

AS a labor lawyer I cringe when Democrats talk of “saving” Social Security. We should not “save” it but raise it. Right now Social Security pays out 39 percent of the average worker’s preretirement earnings. While jaws may drop inside the Beltway, we could raise that to 50 percent. We’d still be near the bottom of the league of the world’s richest countries — but at least it would be a basement with some food and air. We have elderly people living on less than $10,000 a year. Is that what Democrats want to “save”?

“But we can’t afford it!” Oh, come on: We have a federal tax rate equal to nearly 15 percent of our G.D.P. — far below the take in most wealthy countries. Let’s wake up: the biggest crisis we face is that most of us have nothing meaningful saved for retirement. I know. I started my career wanting to be a pension lawyer. In the 1970s, lawyers like me expected there to be big pots of private pensions for hourly workers. By the 1980s, as factories closed, I was filing hopeless lawsuits to claw back bits and pieces of benefits. Now there are even fewer bits and pieces to get.

A recent Harris poll found that 34 percent of Americans have nothing saved for retirement — not even a hundred bucks. In this lost decade, that percentage is sure to go up. At retirement the lucky few with a 401(k) typically have $98,000. As an annuity that’s about $600 a month — not exactly an upper-middle-class lifestyle. It’s too late for Congress to come up with some new savings plan — a new I.R.A. that grows hair, or something. There’s no time. We have to improve the one public pension program in place. Should we means-test it? No. I don’t care if they go out and buy bottles of Jim Beam: let our elderly have an occasional night out at a restaurant.

The most paralyzing half-truth in this country is that people hate taxes. People are willing to pay taxes that they spend on themselves. Two-thirds of those surveyed in a CBS/New York Times poll in January were willing to pay more taxes to save Social Security at its modest level. To “save” it, most of us don’t need to pay. We could lift the cap on high earners, the 6 percent of workers who make over $106,800 a year. If earnings above the cap were subject to the payroll tax with no increase in benefits to high earners, there would be no deficit in the Social Security trust fund in 2037, as projected.

http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html?nl=todaysheadlines&emc=thab1

[Enthusiast]

1. K&R

They will never be satisfied until social security is privatized. It is a matter of greed, not of funding the program.

[closeupready]

2. Of course. It's putting big money in the hands mostly of people who don't know what

they are doing financially; all the better to find ways of separating them from that money, in the hundreds of different forms of fees.

[midnight]

3. It has a nice ring to it... Raise Social Security....

[diane in sf]

4. Can I K&R this article a million times?

[JDPriestly]

5. Great article. Just like everything else by Thomas Geoghagen.

Can't resist citing more:

If we lift the cap on the payroll tax without paying more benefits to those above it, that gets us 2.32 percent (or a bit less if we slightly increase benefits to the rich). Dedicating revenues from the estate tax at its 2009 levels to Social Security gets another half percent. A few other tweaks, like covering new public employees, add another 0.42 percent. The remainder can be found by raising the payroll tax by roughly 1 percentage point for both employees and employers.

http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html?_r=1&nl=todaysheadlines&emc=thab1