A Social Security Administration office in San Francisco.
Time is running out when it comes to implementing changes to bolster Social Security funds, which will not be able to pay full benefits in 13 years.
Potential voters are aware of the program’s woes, according to a June survey by Social Security Works and Data for Progress.
At this point, 64% of the 1,335 survey respondents are “very concerned” that the program will lack funding to cover all benefits for future generations. Meanwhile, 20% say they are “somewhat worried” and 10% say they are “only a little worried”, while the remaining 6% are not worried at all.
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The poll follows the release of the Social Security Trustees’ annual report last month, which forecast the program will only be able to pay 80% of benefits in 2035 if no changes are made by then.
To shore up the program, legislators usually have the choice of raising taxes, cutting benefits, or a combination of the two.
Democrats have proposed a few bills that would make benefits more generous largely by raising payroll taxes. Republicans bristled at the idea of tax increases.
The new poll aimed to gauge what Americans might think about some of the ideas put forward.
Cost of living protection is high on wish lists
Consumer prices have reached record levels not seen in four decades.
As a result, it’s no surprise that a proposal to increase Social Security benefits for all recipients to match the rising cost of living drew the most support, with 83% of respondents in favour, 10 % against and 8% saying they don’t. don’t know (answers have been rounded off).
Similarly, respondents strongly agreed with the idea that benefits increase with the cost of living.
The survey found that 84% of respondents were in favor of it, while 8% opposed it and 8% did not know.
Granted, Social Security cost-of-living adjustments already take place every year.
But while these annual changes are measured by a subset of the consumer price index — known as the Consumer Price Index for Urban Wage and Clerical Workers, or CPI-W — Democrats called for moving to another index.
That measure — the Consumer Price Index for the Elderly, or CPI-E — is, some say, a better measure of the costs older Americans are paying.
However, some research shows that the CPI-E would not necessarily lead to a greater increase in annual benefits. Both indices have seen virtually identical average annual increases from 2002 to 2021, according to the Center for Retirement Research at Boston College.
More payroll taxes for people earning $400,000
A proposal put forward by Rep. John Larson, D-Conn., seeks to reapply Social Security payroll taxes to people earning $400,000 and above.
Currently, these taxes — 6.2% paid by both employees and employers — only apply to wages up to $147,000 starting in 2022.
These higher taxes would be used to fund increased benefits.
Rep. John Larson, D-Conn., and other lawmakers discuss Social Security Bill 2100, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
Drew Anger | Getty Images News | Getty Images
Among survey respondents, 76% say they support these changes, while 14% oppose them. The remaining 10% were undecided.
It should be noted that Senators Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., have proposed a different bill that would reapply Social Security payroll taxes for incomes over $250,000, between other tax increases.
“We support expansions without reductions, and there are many ways to expand,” said Nancy Altman, president of Social Security Works. “Given the retirement income crisis, we need to grow quite substantially.”
Higher benefits and other proposals
Unsurprisingly, there was also strong support for the idea of increasing benefits at all levels for all recipients, with 77%. At the same time, 15% oppose the idea and 8% are undecided.
The survey also gauged people’s willingness to adopt other changes proposed by Democrats, including setting the minimum benefit at 25% above the poverty line, improving benefits for widows and widowers and ensuring that teachers, firefighters and police did not have their benefits reduced because Social Security taxes were not always withheld from their paychecks.
While these and other measures to make benefits more generous also received strong support, it remains to be seen what combination of changes politicians on both sides of the aisle can agree on.
Notably, social security reform legislation cannot be passed by a one-party majority. Both parties will need to agree to any changes that come into effect.
Another recent survey from the University of Maryland Public Consultation Program gave respondents a policy simulation where they could see the trade-offs of how certain changes affected the program.
Respondents tended to spread out their choices to include certain revenue increases and budget cuts, depending on the results. Most have not reached the maximum on one side or the other.
Like this survey, however, respondents were also strongly in favor of reapplying the Social Security payroll tax for salaries over $400,000..