A Social Security Administration office in San Francisco.
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The clock is ticking when it comes to implementing changes to prop up Social Security coffers that won’t be able to pay full benefits 13 years from now.
Potential voters are aware of the program’s problems, according to a survey by Social Security Works and Data for Progress in June.
To this point, 64% of the 1,335 survey respondents are “very concerned” that the program will run out of funds to cover the full benefits for future generations. Meanwhile, 20% said they were “somewhat concerned” and 10% said they were “just a little concerned”, while the remaining 6% were not at all concerned.
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The survey follows the release of the annual Social Security Trustee’s Report last month, which projects the program can only pay 80% of benefits in 2035 if no changes are made by then.
To shore up the program, lawmakers generally have a choice between raising taxes, cutting benefits, or a combination of both.
Democrats have proposed some bills that would make benefits more generous, primarily by raising payroll taxes. Republicans have balked at the idea of tax increases.
The new poll attempted to gauge how Americans might feel about some of the ideas put forward.
Protection against inflation is at the top of the wish list
Consumer prices have risen to a record level not seen in four decades.
It is therefore not surprising that a proposal to increase Social Security benefits for all beneficiaries to keep them in line with the rising cost of living received the highest support, with 83% of respondents saying in favor, 10% against and 8% not don’t know (answers have been rounded).
Similarly, respondents strongly agreed with the idea that benefits increase with the cost of living.
The poll found that 84% of respondents were in favor, while 8% were against and 8% didn’t know.
Certainly, the adjustment of the cost of living in social security already takes place every year.
But while those annual changes are measured by a subset of the consumer price index — known as the CPI for urban wage-earners and office workers, or CPI-W — Democrats have called for a switch to a different index.
This measurement — the Consumer Price Index for the Elderly, or CPI-E — some say better measures the costs that older Americans pay.
However, some research indicates that the CPI-E would not necessarily result in a larger annual increase in performance. According to the Center for Retirement Research at Boston College, the two indices had virtually identical average annual increases from 2002 through 2021.
More payroll taxes for people who make $400,000
A proposal by Rep. John Larson, D-Conn., seeks to reapply Social Security taxes to individuals with incomes of $400,000 and above.
Currently, those taxes — 6.2% paid by both workers and employers — only apply to wages up to $147,000 from 2022.
These higher taxes would be used to fund performance upgrades.
Rep. John Larson, D-Conn., and other lawmakers discuss the Social Security 2100 Act, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
Drew Angerer | News from Getty Images | Getty Images
76% of survey participants supported these changes, while 14% opposed them. The remaining 10% were undecided.
Notably, Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., have proposed another bill that would reapply Social Security taxes on income over $250,000, among other tax increases.
“We support expansion without cuts, and there are many different ways to expand,” said Nancy Altman, president of Social Security Works. “Given the retirement income crisis, we need to expand quite significantly.”
Higher performance and other suggestions
Not surprisingly, the idea of increasing benefits across the board for all beneficiaries also received strong support, at 77%. At the same time, 15% rejected the idea and 8% were undecided.
The poll also assessed people’s willingness to embrace other changes Democrats are proposing, including setting the minimum benefit at 25% above the poverty line, improving benefits for widows and widowers, and ensuring that teachers, firefighters and police officers do not lose their benefits taxes cut due to social security weren’t always withheld from their paychecks.
While these and other measures to increase welfare benefits also drew strong support, it remains to be seen what mix of changes politicians from both sides of the aisle can agree on.
In particular, the social security reform cannot be pushed through with a one-party majority. Both parties must sign off on any changes that come into effect.
Another recent survey by 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.
According to the results, respondents tended to spread their choices across some revenue increases and some budget cuts. Most haven’t exhausted one side or the other.
However, as with this survey, respondents also strongly supported raising the Social Security tax again for wages over $400,000.