National Senior Citizens Law Center
Burton D. Fretz,
Executive Director
1101 14th Street, NW, Suite 400
Washington, DC 20005
(202) 289-6976
FAX (202) 289-7224
http://www.nsclc.org
Gerald McIntyre,
Directing Attorney
2639 S. La Cienega Blvd.
Los Angeles, CA 90034
(310) 204-6015
FAX (310) 204-0891
WHITE HOUSE CONFERENCE ON SOCIAL SECURITY
December 8, 1998
The Law Center advocates for the elderly poor, including low income
retirees, minimum wage earners, women, minorities, and people with
disabilities. Protecting the Social Security system is vital to
their security.
SOCIAL SECURITY CAN BE PROTECTED WITHOUT RADICAL CHANGES.
In reality, no Social Security "crisis" exists. The system can pay
full benefits through year 2032 and at least 75 % of benefits
thereafter. Modest adjustments today can eliminate any gap after
2032 and will not raise the tax rate, cut benefits or restrict
eligibility:
- Lifting the yearly cap on the payroll tax (FICA), now at $68,400
annually, will replace the current regressive structure and will
eliminate about half the gap. At a minimum, the cap should be raised
to $100,000, which will fill about 30% of the gap and restore the
FICA tax to 90 % of the national wage base, its historic level.
- Extending Social Security coverage to state and local employees
will eliminate about 12% of the 75-year gap.
- Taxing Social Security benefits like private pensions, and
phasing out the existing exemption thresholds, will fill about 19%
of the gap.
- Investing up to 40% of the Trust Funds in stocks, reaching 40%
in 2015, will eliminate nearly 50% of the benefit gap.
CERTAIN PROPOSALS WOULD HARM LOW INCOME PEOPLE
- Converting Social Security into private individual accounts
would expose workers to extraordinary risk. People who invest
unwisely, too conservatively, or just unluckily will face insecurity
in old age. A whole generation of retirees will meet this fate if
their peak investment years occur during a prolonged market slump,
like that occurring from 1962 to 1982. To force people to gamble
their retirement income in the marketplace turns Social Security
on its head.
- Raising the age of eligibility for retirement benefits is
especially harsh. Many older people work past age 65 from economic
necessity. Others suffer the disabilities of age and cannot work.
Still others are forced into early retirement and cannot find
replacement jobs. To finance Social Security on the backs of the
elderly would be cruel and unnecessary.
- Increasing benefit computation years from 35 to 38 would lower
benefits for many women and marginal workers by adding years of no
or low wages to the calculation.
These options would hurt the most
vulnerable individuals which the program now protects.
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