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Targeted improvements, 75-Year Financing
Plan would strengthen Social Security for
the Long Run group Says
11, 2010 /PRNewswire-USNewswire/
-- A long-range financing plan for Social
Security with targeted improvements in
benefits is an affordable approach to Social
Security reform that would have broad
support from the American people, according
to a new brief released by the National
Academy of Social Insurance (NASI)
Such an approach would secure Social
Security for the future, provide peace of
mind to workers and young Americans that
they can count on the program, and
demonstrate that Washington is
listening to what the public wants,
according to the new policy paper, Strengthening
Social Security for the Long Run.
"Opinion surveys consistently show that the
public, regardless of political affiliation,
recognizes Social Security is more important
now than ever," said NASI President Janice
"As Americans live through a time of great
economic uncertainty, they say they want to
reinforce rather than weaken the program."
NASI is a nonpartisan organization made up
of the nation's leading experts on social
In charting Social Security's future, the
it's useful to remember how Congress
addressed the immediate funding crisis the
program faced in 1983.
Following the recommendations of the
bipartisan commission chaired by Alan
lawmakers enacted a reasonably balanced mix
of contribution increases and reductions in
benefits to get Social Security safely
through the 1980s.
But when it came to closing out the
long-term deficit then facing the program,
Congress added only a further benefit
reduction by phasing in an increase in the
retirement age from 65 to 67. That benefit
reduction is still being phased in today.
Congress did not add any new revenue, even
though providing future revenue had been an
accepted practice in the past.
"In current policy discussions about the
long-term financing of Social Security,
reforms enacted in 1983 often are held up as
a model of balanced political compromise.
But that's not the whole story," said NASI
Vice President Virginia
Reno served on the staff of the Greenspan
Commission. Gregory was instrumental in the
work of the House Ways and Means Committee
when the reforms were enacted.
Unlike in 1983, the Social Security program
today does not face a short-term financing
Moreover, the percent of the population
receiving Social Security benefits will
increase from about 17 percent today to 25
percent in 75 years, but the cost of the
program as a percent of the economy will
increase only from about 5 percent to about
There are at least three reasons to be
concerned about the adequacy of Social
Security benefits in the future, according
to the brief. First, benefits today are
modest – about $14,000 per
year on average in 2010 – but are the main
source of income for most of the elderly.
Second, benefits as a percent of prior
earnings are projected to decline in the
future. Third, other sources of retirement
income are becoming less secure and less
Making modest improvements to address these
concerns and covering the projected
long-term shortfall facing Social Security
would require revenue increases equal to
slightly more than 2 percent of taxable
payroll over 75 years, according to the
There are many ways to raise that revenue,
including lifting the FICA contributions cap
to again cover 90 percent of earnings as
Congress intended and scheduling potential
FICA rate increases for points in the
distant future when additional funds would
strengthen the program.
"It's possible to design a financing plan
for Social Security that is broadly
affordable, consistent with the program's
history and principles, and capable of
strengthening the program for the long run,"
"That would free policymakers to consider
strategies to improve the adequacy of Social
Security benefits rather than cutting them.
"Social Security's long-term funding
challenge can be met in ways that give
Americans greater confidence in their own
economic future," said Gregory, who released
the paper at a Capitol Hill briefing.
To download the brief, visit the NASI
website at www.nasi.org.
The National Academy of Social Insurance (NASI)
is a non-profit, nonpartisan organization
made up of the nation's leading experts on
social insurance. Its mission is to promote
understanding of how social insurance
contributes to economic security and a
SOURCE The National Academy of Social