Proposals to Reform Social Security and Extend Solvency

As the Social Security trust fund faces an impending depletion within the next decade, a bipartisan group of senators is quietly exploring options to reform the program.^[0] One proposal is to raise the retirement age to 70, up from 67 for those born in 1960 or later.^[1] This change could drastically alter the monthly benefits received by early retirees and have a particularly strong effect on those with lower incomes or blue collar jobs due to life expectancies being shorter.^[2]

The Social Security Fairness Act (HR 82) sponsored by Representatives Abigail Spanberger (D-VA) and Garret Graves (R-LA) and has over 125 co-sponsors, would repeal both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) in current Social Security law.^[3] WEP affects workers who spent some time in jobs not covered by Social Security, while GPO offsets Social Security spousal benefits for those whose spouses receive pensions from federal, state, or local government.^[4] These provisions reduce Social Security benefits for nearly 3 million Americans – including many teachers and police officers.^[5]

The Windfall Elimination Provision and the Government Pension Offset were both enacted to shore up Social Security’s finances by reducing the benefits of those who didn’t pay into the program while earning their pension. However, a 2019 Social Security Administration report showed that almost 35% of men and 40% of women claim their benefits at age 62, resulting in a collective lifetime loss of $111,000 per household.^[6]

In an effort to extend the solvency of Social Security, Senators King and Cassidy are proposing a compromise in the form of a sovereign wealth fund (SWF).^[7] This would be an investment fund owned by the government, with profits used to pay Social Security benefits.^[7] The senators noted that if the investments “didn’t do terribly well, we would kick in through other sources and make sure that we don’t threaten in any way the benefits of recipients.”^[8]

The new Social Security plan sponsored by Senators King and Cassidy could reduce the overall total of Social Security payments collected in a retiree's lifetime and extend the age for collecting benefits to 70.^[9] This means that more workers will die before becoming old enough to collect any Social Security checks. President Biden has repeatedly accused Republicans of seeking to cut Medicare and Social Security benefits, while Republicans have responded with jeers and outrage.^[10]

0. “Bipartisan Senate Group Considering Raising Social Security Age to 70” Newsmax, 28 Feb. 2023, https://www.newsmax.com/newsfront/social-security-retirement/2023/02/28/id/1110485/

1. “Liberal Group's Meme Mentions Nonexistent GOP Vote to Raise Social Security's Retirement Age” FactCheck.org, 6 Mar. 2023, https://www.factcheck.org/2023/03/liberal-groups-meme-mentions-nonexistent-gop-vote-to-raise-social-securitys-retirement-age/

2. “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

3. “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

4. “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

5. “Duckworth Reintroducing Bipartisan Legislation To Get Public Employees Full Social Security Benefit” Samantha Laturno, 6 Mar. 2023, https://www.effinghamradio.com/2023/03/06/duckworth-reintroducing-bipartisan-legislation-to-get-public-employees-full-social-security-benefit/

6. “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

7. “There are whispers on Capitol Hill of a rare bipartisan effort to overhaul Social Security as the program is set to go broke in less than 10 years” Yahoo! Voices, 1 Mar. 2023, https://www.yahoo.com/news/whispers-capitol-hill-rare-bipartisan-204548981.html

8. “Senators mull Social Security proposals” The Hill, 2 Mar. 2023, https://thehill.com/newsletters/business-economy/3880220-senators-mull-social-security-proposals

9. “New Social Security Plan to Raise Full Retirement Age to 70” AOL, 6 Mar. 2023, https://www.aol.com/finance/social-security-plan-raise-full-162123499.html

10. “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