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Sen. Tom Harkin

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A Real Proposal to Strengthen Social Security

Posted: 12/07/2012 2:26 pm

It's become an article of faith among certain "serious" people in Washington that any agreement to rein in deficits must include cuts to Social Security. I couldn't disagree more strongly. After all, Social Security can pay full benefits until 2033, by law it is not allowed to add to the deficit or debt, and is not driving our long-term debt. So we need to ask ourselves, what's really going on here?

Unfortunately, it's clear to me that this is just one more misguided pretext for putting Social Security on the chopping block. In fact, if you look closely at the changes under discussion, you'll find that they all purport to "save" Social Security by slashing benefits. Here are a few examples of what these "serious" proposals would do:

  • Raise the retirement age so that hardworking Americans including nurses, cashiers, carpenters and mechanics have to work even longer before they can retire and claim their full benefits;
  • Base future cost of living adjustments (COLAs) on the so-called 'Chained-CPI,' which would reduce the annual COLAs and make it even harder for seniors to keep up with inflation;
  • Means-test benefits by changing the Social Security benefit formula to reduce benefits for middle class beneficiaries.

These ideas are nothing new. And it should come as no surprise that they have been put forward by many of the same people who attempted to privatize Social Security less than a decade ago. Quite simply, this is just one more excuse for opponents of Social Security to undermine the nation's most successful social program.

Those of us who are honestly committed to strengthening Social Security have another approach. First, we will strongly resist any effort to cut Social Security as part of a "grand bargain" at the end of the year or early next year. Second, to demonstrate an approach that will actually strengthen Social Security, I have put forward legislation that would provide seniors with greater economic security in their retirement by increasing benefits.

My proposal does so in three ways:

  • Changes the Social Security benefit formula to increase benefits by approximately $65 a month;
  • Ensures that annual COLAs better reflect the typical expenses faced by seniors;
  • Applies the payroll tax to every dollar of eligible earnings by removing the wage cap that unfairly protects higher earning individuals from paying payroll taxes at the same rate as middle class workers.

Importantly, my legislation also extends the solvency of the Trust Fund beyond 2050, demonstrating that you can save Social Security in a way that doesn't undermine the retirement security of those who rely on the program.

These are the kind of changes we should consider as part of any effort to reform Social Security. Regrettably, I don't hear those who want to put Social Security on the table as part of a debt reduction package calling for these types of reforms. On the contrary, their proposals would simply make it harder for Americans to enjoy their golden years.

Social Security provides a modest benefit, on average $14,000 per year, to over 37 million retired Americans and their dependents. The long-term issue facing Social Security is certainly not that this benefit is too generous.

I stand ready to work with any of my Senate colleagues to reduce our deficit and debt. But I am not willing to do so at the expense of the hardworking middle class families who rely on Social Security to retire with dignity.

 
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It's become an article of faith among certain "serious" people in Washington that any agreement to rein in deficits must include cuts to Social Security. I couldn't disagree more strongly. After all...
It's become an article of faith among certain "serious" people in Washington that any agreement to rein in deficits must include cuts to Social Security. I couldn't disagree more strongly. After all...
 
 
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28 minutes ago ( 1:57 PM)
the 'right ' has distorted this truth repeatedly ! it lessens the ability to take them seriously as to motive ,, ie 'fiscal responsibility '
03:31 PM on 12/10/2012
Here is an idea. Let me invest my own money from Social Security. I can do a much better job with my own money then the government. They should give a choice to people. You want to invest on your own then fine, but no bailout if you fail or you can stay with the traditional government plan. I for one would do it on my own like i am now with my own retirement investing
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HUFFPOST SUPER USER
pjkozy
truth only comes in one flavor
11:32 AM on 12/10/2012
Now this social security plan makes sense...
10:55 AM on 12/10/2012
The best way to solve this mess is for congress to have their private retirment system merged into Social Security so everyone would be on a level playing field. That would be the only way to get realistic, equitable proposals out of these 'eletes'.
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Si1ver1ock
So long, and thanks for all the fish...
09:23 PM on 12/09/2012
Well, this is something we have been waiting for. Someone is a position of athority is willing to move forward. So, how do we move forward?

1. Name the Plan. It helps if we have short hand name we can talk about. For now call it the Harkin Plan. The name may change after step two.

2. Get a co-sponsor, preferably in the House of Representatives. The plan could be called the Harkin-Pelosi Plan or something.

3. Vet the Plan. Get some knowledgeable people to assess and possibly endorse the plan. Robert Reich was a trustee of Social Security. See what Reich has to say and some other Economists as well, Krugman et al.

4. Build support for the plan. Instead of getting people one at a time to look at the plan, go for organizations like the AARP it is one of the biggest lobbying organizations around. Getting the AARP, AFL-CIO, etc. on board would go a long way towards giving it "serious" status.

5. Create Buzz for the plan. Once the plan has been Named, Co-sponsored and Vetted, start calling people and asking if they support the Harkin Plan. Start with Liberal talk shows and move on from there to C-SPAN. Eventually, move on to Conservative arenas, Fox News, Rush etc.

Do you support the Harkin Plan?
HUFFPOST SUPER USER
cb55
11:04 AM on 12/10/2012
Absolutely! It is about time that someone looks out for the middle class. Who has been talking about them? Who is championing their causes?

Every single middle class voter should let their voices be heard and support this Harken proposal.
08:04 PM on 12/09/2012
Another example of misleading political blather. Social Security is a 15% tax (earner plus company contribution). Social Security taxes are capped because the benefits are capped. Removing the cap on social security is just a dishonest way of adding a 15 percent additional tax on all income above the social security tax maximum earnings of $113,700.

The country is already being torn apart by adding a 3.9% tax on income over $200,000. Can you imagine the fight we would have over increasing the tax 15% on income over $113,700?

A nice ploy Tom, but I don't think you can get away with it. If you want to tax the rich you just have to get the guts to stand up an propose it and not just find a cleaver way to try to hide it.
HUFFPOST SUPER USER
hark
10:19 AM on 12/10/2012
Baloney. Just baloney.
HUFFPOST SUPER USER
ImaBigBum
Why yes, I'm supposed to be working.
12:19 PM on 12/10/2012
Torn apart my backside. Pure blather. Get used to the idea dude, the cap will be removed during this administration.
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HUFFPOST PUNDIT
Bloggerrogr
Fired Up - Ready To Go!
04:04 PM on 12/09/2012
Actually, removing the earnings cap guarantees solvency into perpetuity. Thank you, Senator Harkin.


FWIW
botazefa
Sounds like Bodhisattva
01:41 PM on 12/10/2012
into perpetuity.

Very easy solution. And, it's a solution to a problem that doesn't even arrive until 2033. Just the fact that we're having conversations about the solvency of Social Security, in 2012, proves how strong the GOP is at manufacturing crises and manipulating the low-information electorate. Sad.
03:28 PM on 12/10/2012
There wouldn't be a problem with solvency if Congress, both Dems and Repubs didnt raid it over the decades
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Bloggerrogr
Fired Up - Ready To Go!
06:18 PM on 12/10/2012
The latest report shows the SS Trust with $2.7 Trillion in assets.
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HUFFPOST SUPER USER
Tar Heel Bill 92
03:09 PM on 12/09/2012
I like the idea of extending/eliminating the income cap on which FICA/SECA tax rates are based. However, if you merely eliminate the cap, you are basically adding a 15.3% income tax on self-employed persons earning above the current $110,100 threshold. (Employed persons only pay half of these taxes, while their employers pay the other half.)

If we were to eliminate the cap, then I would also think it is possible to reduce the overall RATE, as well--finding a lower rate that still allows MORE money overall to be collected for Social Security, but which then allows anyone earning below $110,000 to actually lower their tax burden towards Social Security while those making above $110,000 will then be contributing towards Social Security but at this lower rate. That seems to be a reasonable compromise.
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HUFFPOST SUPER USER
bg66astoria
Research Helps
10:14 AM on 12/09/2012
The average benefit is closer to $12K/year out of which Medicare Part A/B/D premiums, deductibles & co-pays are paid. The premiums alone make the annual net closer to $10,800.
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HUFFPOST SUPER USER
bg66astoria
Research Helps
10:11 AM on 12/09/2012
Repeal the wage/salary cap to FICA taxes & make sure more same year income, i.e., carried interest, bonuses, dividends, interest are income subject to FICA, adopt the CPI-E COLA measure.

Then cut the DOD/Security Industrial Complex budget as per sequestration & you're doing better.
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ennis438
06:20 AM on 12/09/2012
The best solution to maintain Social Security is the exact same solution to assure the well being of the middle class. Get as much Republicant sewage out of all fields of government.
10:13 PM on 12/08/2012
nice to hear someone say something to benefit the system. of course, the real argument is just what senator harkin is calling for, a huge tax hike on the hugely wealthy, approximately 14%, which is what i pay in social security tax, and what the fight is really all about. imagine the money the koch brothers would save if they didn't have to match the 7% being deducted from salaries? now, uncap the limit. let's hear it for harkin. he needs a larger stage.
12:55 PM on 12/08/2012
I have a better idea. The government should pay back all the money they owe to social security by buying back their IOU's. Easy and straight forward. The social security chest has been plundered for many years.
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Bloggerrogr
Fired Up - Ready To Go!
04:09 PM on 12/09/2012
The Social Security Trust Fund currently carries a balance of $2 Trillion; enough to make SS solvent at 100% until 2033. After that (under current law) it would reduce to 75%. By removing the earnings cap, solvency is guaranteed out into perpetuity. THe only IOU's are from other obligations made, most under Republican administrations.

FWIW
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T Trump
Sarcasm / Truth / Mocking
12:30 PM on 12/08/2012
The fact is many Republicans are on Social Security and do not want it changed. They want it strengthened for themselves and for future generations, yet Republican Politicians just can't seem to get that through their ignorant thick skulls.!
11:56 AM on 12/08/2012
SCRAP THE CAP!!
HUFFPOST SUPER USER
Allene Stucki
02:29 PM on 12/08/2012
Scrapping the cap is fine, but it barely makes a dent in the shortfall.
07:47 PM on 12/08/2012
Wrong. Just raising the cap from $110,000 (what it is today) to $250,000 would increase the solvency of Social Security by 75 years, that's a substantial amount of savings. Eliminating the cap altogether would net even more savings and make the program solvent for nearly a century.
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04:47 AM on 12/09/2012
Better to require employers to make matching contributions to their employees.