The bipartisan National Commission on Fiscal Responsibility and Reform, as part of a proposal to slash $3.8 trillion from the federal budget deficit, is taking the combo-and-then-some approach.
In its draft plan to rescue Social Security and prevent what some see as inevitable in the absence of action — a sudden 22% reduction in benefits for all beneficiaries in 2037 — the deficit commission wants to tax 90% of covered earnings by 2050, make the benefit formula more progressive so that high-income recipients receive relatively less, index the retirement age to longevity gains, and dampen COLAs, among other measures. (See the commission's proposal on www.FiscalCommission.gov).
I think they are missing the point: Social Security was never meant to be a primary pension for Americans. It was intended as a supplemental retirement plan from pensions already established by corporations. It also began when the average life-expectancy was 55, not 85.
What they need to do is create incentives for individuals to bear the responsibility of their retirement for themselves rather than handcuffing them with silly penalty rules, maximum contribution levels, and minimum income stipulations. This, of course, is asking way too much.
Grace & Peace,
PLW
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