New Report: Rejuvenating Social Security
The program’s future is in peril, but saving it doesn’t mean cutting benefits
New York, NY – Social Security is set to run out of money in 2034, and reform of the program will then be unavoidable. Ideas have centered around two poles – either cutting benefits or increasing taxes – creating a political impasse promising little progress until the program’s insolvency crisis is imminent. In a new Manhattan Institute report, senior fellow Chris Pope offers an innovative solution capable of realizing Social Security’s ideals while inviting bipartisan support.
While maintaining the existing system with the tax increase needed to ensure its solvency, Pope calls for allowing those under 45 to opt-in for uniform retirement benefits (regardless of income) in return for lower payroll taxes. This “Reliable Predictable Security” would be a simple yearly retirement benefit worth $17,000 per person, indexed for inflation, in return for a 5% payroll tax cut in the remainder of enrollees’ working years. Such a program would better protect all Americans against poverty in old age, avoid Social Security’s imminent insolvency, and reduce the tax burden on younger workers.
In promoting a uniform benefit option, Pope’s proposal flips the dichotomy between cutting benefits and raising taxes, appealing to the entire political spectrum. The political left would be able to champion protecting existing benefits for all, while the political right would welcome the net reduction in the burden of the program on taxpaying workers. All Americans would benefit from the strengthened guarantee of a minimum income in retirement.
Pope’s is a unique, fleshed-out, and actionable proposal to rejuvenate Social Security, which will either come about through bipartisan support, or not at all.