Given the contentious nature of the Social Security funding debate, Republicans and Democrats in Washington have been unable to make meaningful progress on solutions that would support the program. But new research shows that a “very large bipartisan majority” of ordinary Americans actually agree with a number of changes that could strengthen it and ensure benefits are paid in full for years to come.
Without legislative action, Social Security Trust Fund reserves could be depleted in just over a decade. At this stage, only 83% of benefits will be paid to recipients.
Some of the changes that have received bipartisan support include ideas generally considered unpopular, such as raising the 6.2% payroll tax and raising the retirement age, but there is a key caveat. Unlike traditional polls, which simply ask respondents about their support for policy proposals, this survey, conducted by the University of Maryland’s Public Advisory Program, included an educational component.
Participants were asked to read a briefing with information about Social Security taxes, benefit structures, and funding issues before answering questions.
The results show there is hope for the country to come together and solve the problem, but the scale of the problem will have to be taken into account, Ron Gebhardtsbauer, professor emeritus of actuarial science at the University of Pennsylvania, said during a panel session Wednesday at the annual meeting of the American Academy of Actuaries. .
“They weren’t simply asked, ‘What do you think about raising the retirement age?’ You know, no one will like this idea. Or, “What do you think about a big tax increase?” Nobody will like it,” Gebhardtsbauer said. “But what they had to do was like a challenge… (it) says here’s the problem, we have to fill this hole. Okay, how are we going to do this?”
Here are four proposals that are widely supported by Republicans and Democrats in the poll, which oversamples swing states:
- 87% support subjecting wages over $400,000 to a Social Security payroll tax.
- 86% support gradually increasing the payroll tax from 6.2% to 6.5% over six years.
- 89% support gradually raising the retirement age from 67 to 68 by 2033.
- 92% support benefit cuts for the top 20% of people by income
Together, these four changes would cover 101% of Social Security’s funding gap over 75 years, providing a comfortable buffer from an actuarial perspective, according to the report.
The first of these proposals is consistent with the Biden-Harris administration’s policy position, and the $400,000 amount correlates with its pledge not to raise taxes on those with income below that threshold.
The idea is to create a “doughnut” for payroll taxes, as Aaron Chirksena, founder and CEO of MDRN Capital, recently told Money magazine: Then $400,000 and everything above… is taxable again.”
The remaining three proposals—raising the payroll tax rate, raising the retirement age and cutting benefits—have no support from either candidate in the upcoming presidential election.
Budget proposals from the Republican Study Committee, the major House GOP caucus, call for a gradual increase in pensions until age 69. Retirement age determines when people are eligible to receive full Social Security benefits. Currently, you can claim benefits as early as age 62, but your benefits will be reduced if you file before age 67.
Despite the recent impasse in resolving Social Security’s problems, another speaker at the actuaries’ meeting, Stephen Goss, chief actuary of the Social Security Administration, called the financial difficulties the program will face in the future “very fixable.” The survey data above suggests that there is more room for consensus than previously thought.
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