The 2012 Social Security Trustees’ report confirms Social Security is well-financed, with a reserve of $2.7 trillion. But you wouldn’t know it from the chorus of “bad news” headlines, so here are the facts:
- Without any Congressional action at all, full benefits can be paid until 2033, at which point Social Security would still be able to cover about 75% of benefits.
- Because of how Social Security calculates benefits, that “75%” of benefits in 2033 will still be, on average, higher (in inflation-adjusted dollars), than full benefits today.
Other nonpartisan sources have also noted Social Security is on a sound financial footing. The Congressional Budget Office projects costs will remain relatively flat over the next 75-years, increasing by about 1% before leveling off.
“Whatever the reason—ideology, poor understanding of how the program works, gullibility, or plain old reportorial laziness—news outlets have given the public a skewed picture of the financial health of this hugely important program.”
Social Security Works – Washington is pushing back by correcting misinformation about Social Security in the media, and advocating for a simple proposal that will improve Social Security’s long-term fiscal outlook and improve benefits: Scrap the Cap.
Under Scrap the Cap, Congress would lift the cap on income subject to Social Security taxes, currently $110,100. This simple fix would allow a modest benefit increase today, ensure benefits are fully funded in the long-run, and maintain Social Security’s historic benefit-contribution link.
“Social Security is well-financed – scrapping the cap will remove any doubt about its long-term financial stability,” said Robby Stern, Chair of the Social Security Works WA coalition and President of Puget Sound Alliance for Retired Americans.
Under Scrap the Cap, Social Security can restore benefits to college students who have suffered the death of a parent, provide family care credits to people who leave the workforce to take care of children or family members, and increase benefits for the lowest-income earners.