The following is an excerpt from Social Security Works!:
An expanded Social Security system is a solution to four serious challenges facing our nation: the income insufficiency of today’s seniors; the retirement income crisis confronting today’s middle-aged and young workers; insufficient recognition of and public support for the caregiving functions of the family; and increased inequality, now hollowing out the middle class. While not a total solution, Social Security has a key role to play.
We demonstrate that key role, by presenting our plan, the Social Security Works All Generations Plan – a comprehensive package of benefit and revenue changes that expands Social Security’s protections in important ways. Our plan is but one among a number of excellent plans. A growing number of United States senators, members of the House of Representatives, academics, and leading organizations representing, among others, women, seniors, people with disabilities, low-income Americans, and people of color, have put forward Social Security expansion plans.
All of the plans present solutions to pressing challenges. All pay for the improvements. All truly strengthen, rather than cut, our Social Security system. Combined, these proposals and plans illustrate that there are many paths to building on our existing Social Security system to provide stronger, affordable protection for America’s families, while reducing income inequality.
More specifically, we describe benefit improvements and how they strengthen retirement security for today’s retirees and workers, and how they strengthen protections across all generations in the family, including those giving care to others. We also explain why and how the richest nation in the world can pay for these benefit improvements. How doing so can slow the rapid growth of income inequality, while correcting the damage to Social Security’s financing that income inequality has wrought.
INCREASING THE ECONOMIC SECURITY OF CURRENT AND FUTURE SENIORS
Prior to the enactment of Social Security, the large majority of workers were unable to retire with enough income to live with independence and dignity. Social Security changed that. But, we may be returning to a time where a growing number of seniors who want to live independently without burdening their children will lack the financial resources to do so. Indeed, the majority of today’s seniors are at significant economic risk – some living in or close to poverty, and many others just one economic shock away from trouble meeting basic needs. And, tomorrow’s seniors are likely to be in worse financial shape.
Social Security currently provides a strong foundation, but its benefits are far from adequate by themselves. Indeed, they are modest by virtually any measure. Social Security’s retirement benefits average just $15,571 a year. They do not come close to replacing a large enough percentage of wages to allow workers to maintain their standards of living once wages are gone. Moreover, these already minimal replacement rates will be lower in the future, as the result of the already enacted cuts, now being phased in. As another measure, Social Security’s benefits are extremely low by international standards, ranking near the bottom when measured against the old-age benefits provided by other developed countries.
In light of Social Security’s near universality, efficiency, fairness in its benefit distribution, portability from job to job, and security, the obvious solution to the nation’s looming retirement income crisis is to increase Social Security’s modest benefits. Recognizing the retirement income crisis, a number of policymakers have proposed additional savings vehicles and incentives to save. Some have proposed building on tax-favored IRAs and 401(k)s. But savings will not be effective for the vast majority of workers; what will unquestionably be effective is insurance, in the form of time-tested Social Security.
Increasing Social Security’s benefits can be done simply and quickly, with no start-up costs, no additional regulation, and virtually no additional administrative costs. It is very important to recognize that benefit improvements will, over time, be conveyed to all generations in the family and those to come. In fact, younger generations will reap greater benefits from an across-the-board increase than today’s old. That’s because, in raising the benefits of current beneficiaries, we also raise the benefits of those who will receive them in the future, and because today’s old will receive this benefit improvement for fewer years than tomorrow’s old. It will also lessen the squeeze on those who feel responsible to supplement the incomes of their aging parents while also assisting their own children and grandchildren.
Moreover, increasing Social Security benefits will increase the benefits not just of retired workers but also of disabled workers, their families, and the families of deceased workers.
Copyright 2015 by Nancy Altman and Eric R. Kingson. This excerpt originally appeared in Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All, published by The New Press. Reprinted here with permission.