Strengthen Social Security...don’t cut it!

By Steve Kofahl

We’re advocating for improvements in benefit adequacy and equity, not just pushing back hard against the forces determined to cut payments and deform Social Security. By scrapping the $106,800 cap on earnings subject to payroll and self-employment taxes, we would gain revenue to fund program enhancements, while laying to rest any concerns about Trust Fund solvency.

At the Social Security implementation strategy session at the December 2005 White House Conference on Aging, the delegation from the Puget Sound Alliance made important recommendations, and got all of them approved. We suggested raising the surviving spouse benefit to 75% of the combined amount formerly paid to the couple, recognizing that the remaining individual needs more than one- half of the couple’s prior income to meet basic needs.

For workers who care for young children, we called for dropping their years with little or no earnings from the calculation of lifetime average earnings. Average indexed monthly earnings over the best 35 years are the basis for computing payment amounts, and this would allow fewer years to be averaged. A guaranteed minimum benefit would be established to keep low income workers out of poverty.

These changes would be gender neutral, but would primarily benefit women, who generally spend fewer years than men in the workforce, and continue to earn less for comparable work. For the disabled, we recommended an end to the five-month waiting period before benefits are paid following disability onset, and elimination of the 29-month waiting period for Medicare.

The national Strengthen Social Security coalition supports increased revenue from those most able to pay, as well as benefit improvements. Seattle’s Economic Opportunity Institute (EOI) is on the Steering Committee, and serves with PSARA and 18 other member organizations in Social Security Works Washington.

EOI calls for expiration of the 2% payroll tax “holiday” at the end of the year; for scrapping the cap; for a more progressive benefit computation formula; and for a drop in computation years from 35 to 30 in order to raise payments for those who must temporarily leave the workforce to provide childcare and eldercare.

Senator Maria Cantwell will introduce a bill to raise cost of living adjustments by pegging them to a modified Consumer Price Index that measures costs of a “market basket” of goods and services required by seniors and other beneficiaries. We really need to get behind this one, because our opponents are pushing for a reduced COLA for current and future beneficiaries. The costs of health care, food, and housing represent a greater portion of what is spend by beneficiaries than by the general population, and they are growing much faster than the standard CPI.

The October 2009 National Academy of Social Insurance (NASI) report, “Fixing Social Security: Adequate Benefits, Adequate Financing,” prepared for the Senate Select Committee on Aging, describes a menu of Social Security financing and benefit improvement options, including many of those described above.

The Congressional Budget Office followed NASI with “Social Security Policy Options.” NASI and CBO are non-partisan, and not advocacy organizations, so the choices are presented in a neutral and objective manner. If you want more information, check them out! It’s time we played offense, as well as defense, when it comes to Social Security.

(Steve Kofahl is president of Local 3937 of the American Federation of Government Employees and a member of the PSARA Executive Board.)