Bipartisan Group of Senators Propose Social Security Reforms to Prevent Funding Shortfall
By A bipartisan group of senators is discussing ways to reform Social Security in order to prevent a funding shortfall expected in the next decade.[0] The proposal includes raising the retirement age to 70 and creating a sovereign wealth fund to pay Social Security benefits.[1] The fund would be backed by the government and its profits would be used to pay benefits.
The current retirement age for Social Security is 67 for anyone born after 1960, but those who wait until they are 70 will receive increased benefits.[2] Under the proposed changes, those who claim at 62 will still receive reduced benefits.
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) reduce Social Security benefits for nearly 3 million Americans. WEP affects workers who spent some time in jobs not covered by Social Security and worked other jobs where they paid Social Security taxes long enough to qualify for retirement benefits.[3] GPO offsets the Social Security benefit to which a surviving spouse is entitled by two-thirds of the monthly amount of any government pension that they might receive.
The Social Security Fairness Act, sponsored by Representatives Abigail Spanberger (D-VA) and Garret Graves (R-LA), would repeal WEP and GPO and has over 125 co-sponsors.[4] The legislation is the top legislative priority of the Fraternal Order of Police (FOP).
The report released by the Congressional Budget Office earlier this month warned that the Social Security trust fund could run out of money by 2032 — a year earlier than previously expected — without changes to existing policies.[5]
The senators’ bill would also create a sovereign wealth fund, similar to what other retirement funds do around the world, to provide additional income. The fund’s profits would be used to pay Social Security benefits and if the investments didn’t do well, the government would kick in through other sources to ensure no cuts to recipients.[6]
The proposed legislation comes as President Biden has repeatedly accused Republicans of seeking to cut Medicare and Social Security benefits, and Senators Bernie Sanders (I-Vermont) and Elizabeth Warren (D-Massachusetts) have introduced a bill that would not only extend the program’s solvency but also increase benefits paid out to retirees by scrapping the cap on Social Security taxes.[7]
0. “Bipartisan Senate Group Mulls Social Security Investment Fund, Higher Retirement Age” Yahoo News, 1 Mar. 2023, https://news.yahoo.com/bipartisan-senate-group-mulls-social-224452749.html
1. “Senators quietly meeting to retool Social Security” Daily Mail, 2 Mar. 2023, https://www.dailymail.co.uk/news/article-11808639/Senators-quietly-meeting-retool-Social-Security.html
2. “Senators call for two changes to help encourage Social Security beneficiaries to claim retirement benefits later” CNBC, 6 Mar. 2023, https://www.cnbc.com/2023/03/06/senators-call-for-changes-to-help-retirees-claim-social-security-later.html
3. “Senators Brown and Collins Introduce “Social Security Fairness Act” to Repeal WEP and GPO” Fraternal Order of Police, 3 Mar. 2023, https://fop.net/2023/03/senators-brown-and-collins-introduce-social-security-fairness-act-to-repeal-wep-and-gpo
4. “Bipartisan Effort to Fix Social Security Provisions Renewed This Congress” FEDmanager, 28 Feb. 2023, https://fedmanager.com/news/bipartisan-effort-to-fix-social-security-provisions-renewed-this-congress
5. “Social Security could be reshaped as bipartisan group of senators considers increasing age requirement” msnNOW, 28 Feb. 2023, https://www.msn.com/en-us/news/politics/social-security-could-be-reshaped-as-bipartisan-group-of-senators-considers-increasing-age-requirement/ar-AA182zpX
6. “Senators consider $1 trillion investment fund to save Social Security” Business Insider, 1 Mar. 2023, https://www.businessinsider.com/sovereign-wealth-fund-biden-sanders-romney-warren-social-security-medicare-2023-3
7. “Republicans Are Working on Making 70 the New Social Security Retirement Age” Truthout, 28 Feb. 2023, https://truthout.org/articles/republicans-are-working-on-making-70-the-new-social-security-retirement-age
