Retiree Leader Says Congress Should Not
Consider Cutting Social Security Benefits
National Retiree Legislative Network Maintains that Modest Revenue Raises
Could Close Most of Social Security's Long-Term Funding Gap
WASHINGTON (Monday, June 27, 2011) -- The president of the National Retiree Legislative Network (NRLN) said today that members of Congress should not consider cutting Social Security benefits to reduce the nation's budget deficit. Since Social Security's Trust Funds are sufficient to pay 100 percent of benefits over the next 25 years, Congress should instead address the long-term funding gap by focusing on modest increases in the payroll tax rate and increasing the cap on maximum wages subject to the tax.
"According to the latest Social Security Trustees report, the trust funds can pay 100 percent of benefits through 2036 without hurting current or future retirees," said Bill Kadereit, NRLN President. "There is no need to reduce Social Security Cost of Living Allowances (COLAs), do means-testing or make other cuts in benefits. Raising the Social Security tax rate and increasing the cap on maximum wages taxed would produce an actuarially sound Social Security program."
Kadereit acknowledged that the NRLN's position against cuts to Social Security benefits is in contrast to news media reports that the AARP has dropped its longstanding opposition to any Social Security benefit cuts.
"Polls have shown that the vast majority of all Americans oppose cutting Social Security benefits and favor raising the Social Security tax rate and increasing the cap on maximum wages taxed until the program is adequately funded," Kadereit said. "This is both a practical and ethical solution. It keeps the faith with the American public."
Kadereit said that the Social Security Trust in the future should be insulated from access by Congress and never again be loaned out as a piggybank to cover other government spending.
"Social Security is a generational compact," Kadereit said. "Today's retirees helped to pay for their parents' Social Security, and our children as current workers help to pay for us, just as their children will for them.
"It is a contributory plan, one where employers paid in 50 percent as compensation to employees and employees paid in the other 50 percent. Those who were self-employed paid 100 percent of the tax. In some cases Social Security income is taxed. Voters don't believe this is welfare, especially retirees, and rightly so because it isn't!" Kadereit said.
"The number of Social Security beneficiaries will double to over 80 million over the next 30 years, starting in 2010," Kadereit said. "By 2040, the number of beneficiaries stabilizes. Current and past Administrations and Congresses have known these facts and have done nothing to effectively prepare for them since the last round of changes in 1983 when the Greenspan Commission gradually raised the eligibility for full benefits to age 67, in essence a spreading out of benefits. Spreading out the eligibility age limit was an insufficient action in 1983.
"Extending the eligibility age limit again in 2011 would also be insufficient and unfair to those who have paid the mandatory Social Security tax to obtain their full benefits under the current age schedule," Kadereit said. "The U.S. government and members of Congress do not own the funds held in the Social Security Trust---they belong to the beneficiaries."
Kadereit stressed the NRLN's position that Social Security is not a welfare program paid for by the U.S. Government. He said Social Security beneficiaries and their employers have paid into the Social Security Trust since 1937. Every year since 1983, the payroll tax for Social Security has generated tens of billions of dollars in surplus annually. Approximately $1.7 trillion dollars were borrowed from the trust by Congress to cover other federal spending.
"Our predecessors and today's generation have built up an enormous nest egg sufficient to cover 100 percent of promised benefits for at least another 25 years," Kadereit said. "This is why most Americans understand that Social Security is an earned and paid-for benefit, not a government welfare program!"
About the NRLN
Based in Washington, D.C., the National Retiree Legislative Network (NRLN) is the only nationwide organization solely dedicated to representing the interests of retirees and future retirees. Formed in 2002, the NRLN endeavors to secure federal legislation to protect retirees' employer-sponsored pensions and benefits in addition to keeping Social Security and Medicare strong. The NRLN is a non-partisan, grassroots coalition representing more than 2,000,000 retirees who came to the NRLN from retiree associations and as individual members who have retired from 125 different U.S. corporations and public entities. Members live in all 50 states and practically all Congressional districts and are working together to preserve the retirement benefits they earned during their many years of employment. For more information about the NRLN, visit our website at http://www.nrln.org .
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