Republican presidential
candidates, from left, Ohio Gov. John Kasich, former Florida Gov. Jeb
Bush, Sen. Ted Cruz, R-Texas, businessman Donald Trump, Sen. Marco
Rubio, R-Fla., retired neurosurgeon Ben Carson participate during the
CBS News Republican presidential debate at the Peace Center, Saturday,
Feb. 13, 2016, in Greenville, S.C. (AP Photo/John Bazemore)
As we get closer to the presidential election, we’re reviewing how the some of the current White House hopefuls plan to fix Social Security. Here’s what we found according to data from AARP’s Social Security 2016 Election Candidate website and a review of the presidential candidates’ websites.
In general, Republican candidates — though there are exceptions and differences we’ll highlight below — want to raise to raise the full retirement age; eliminate the payroll tax for working seniors 65 and older; adopt inflation measures that would ultimately lower cost-of-living-adjustments (COLA); establish private accounts for Social Security; and abolish limits on retirement earnings.
By contrast, Democratic candidates — though there are differences we’ll highlight below — generally want to increase the payroll tax cap of $118,500 and improve benefits for low-income seniors.
By way of background, you might also want to read this Congressional Budget Office (CBO) report, Social Security Policy Options, 2015, which detailed how various policy options would improve or not improve Social Security’s finances.
Also, most policy wonks suggest that Social Security could gain long-term financial stability if the gap between the system’s revenues and its outlays could be reduced through an increase in tax revenues, a reduction in benefits, or some combination of those two approaches, according to the CBO report.
The CBO report also noted that although “most of the options in this report would improve Social Security’s long-term finances, only a few would significantly postpone the combined trust funds’ exhaustion date because most would be phased in slowly.”
That said, here’s a recap of how the current batch of presidential candidates plan to solve Social Security’s problems.
Bernie Sanders: Sanders wants to increase Social Security benefits by about $65 a month for most recipients. Plus, he wants to boost the minimum benefit to $14,363 a year for someone who has worked for 30 years and he wants to use the consumer-price index for elderly (CPI-E) to calculate cost-of-living adjustment (COLA) instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
By doing this, an average senior at the age of 80 will see a $43 a month increase, while the average senior at age 90 will see a $73 a month increase in benefits, according to Sanders’ proposed legislation, the Social Security Expansion Act.
Of note, Sanders is the only presidential candidate who wants to use the CPI-E to calculate COLAs. Learn more about CPI-E.
According to SocialSecurityWorks.org, Sanders would fund improved benefits for low-income seniors and improved benefits for all seniors by including earnings over $250,000 a year in the payroll tax (currently those making over $118,000 do not pay in on their income about that amount). Sanders would also apply a 6.2% Social Security tax on investment income for high-income households.
Hillary Clinton: Clinton wants to “expand Social Security for those who need it most and who are treated unfairly by the current system — including women who are widows and those who took significant time out of the paid workforce to take care of their children, aging parents, or ailing family members.”
Of note, Clinton is the only candidate who wants to improve benefits for caregivers, according to AARP. “She supports targeted benefit expansions, including a caregiver credit so that people (mostly women) who take time out of the workforce to care for loved ones aren’t penalized when calculating their Social Security benefits,” according to SocialSecurityWorks.org.
And like Sanders, Clinton wants to “preserve Social Security for decades to come by asking the wealthiest to contribute more.” Options include: taxing some of their income above the current Social Security cap and taxing some of their income not currently taken into account by the Social Security system. Read Clinton’s proposal.
SocialSecurityWorks.org praised Sanders and Clinton for opposing all types of Social Security benefits cuts, including efforts to raise the retirement age. Of note, Clinton recently tweeted “I won’t cut Social Security. As always, I’ll defend it, and I’ll expand it.”
Donald Trump: There’s nothing on the candidate’s website about Social Security, but this week Trump was quoted as saying: “We’re going to save Social Security, too, by the way. I mean you’ve been paying in for years, and now they want to start chopping away.”
Trump previously proposed raising the Social Security retirement age to 70 from 67. But he backed away from that stance last year and has since called for infusing Social Security with cash by canceling foreign aid to anti-American countries. Read Is Donald Trump’s new plan for Social Security crazy?
According to SocialSecurityWorks.org, Trump has criticized Republicans for supporting cuts to Social Security and Medicare, and has said he won’t cut benefits, but will instead strengthen them by growing the economy. This is a departure from his position in a book he wrote in 2000, where he called Social Security a Ponzi scheme and said it should be privatized, according to Lacy Crawford, a communications director for SocialSecurityWorks.org .
Jeb Bush: Of all the candidates, former Florida Gov. Jeb Bush plans to make the most changes to Social Security. According to his campaign’s website, his plan would:
- Adjust benefits for seniors who choose to retire early (even smaller checks than given now) or work past the retirement age (even bigger checks than given now)
- Eliminate the retirement earnings test: Under current law, the government reduces the amount of Social Security benefits for seniors who choose to continue working and make more than $15,720 a year. Bush will eliminate that provision.
- Eliminate the payroll tax for seniors at age 67: This will eliminate a 6.2% tax on work for seniors who choose to work well past the retirement age.
- Increase the Social Security retirement age: Workers are now eligible for full Social Security benefits at age 66 (gradually increasing under current law to 67). Workers can choose to retire as early as age 62, if they agree to a lower Social Security check each month. This proposal, similar to one in the bipartisan National Commission on Fiscal Responsibility and Reform (Simpson-Bowles), will very gradually change these eligibility ages by a month every year starting in 2022. (Of note, Bush is the only candidate who wants to raise the early retirement age, according to AARP.)
- Provide a minimum retirement benefit for low-income workers: Seniors who have worked for 30 years will be guaranteed a minimum benefit that is approximately $15,000 a year (125% of the federal poverty level for an individual). This will guarantee that seniors do not live in poverty.
- Slow the growth of costs over time by adjusting benefits for wealthier seniors: Under current law, the government determines the amount of a worker’s Social Security check through a complicated formula based on the worker’s average earnings. This proposal will change that formula so that wealthier workers, who can afford to save for retirement on their own during their careers, get smaller checks from Social Security during retirement.
- Change how Social Security checks are updated each year: Each year, the government updates the amounts of the Social Security checks they send to each senior. The annual update is based on growth in the overall American economy, but the government currently uses inaccurate data to calculate the changes. This proposal will use a more accurate measure of inflation called the chained consumer-price index.
Bush is the only presidential candidate to propose decreasing benefits for early retirees and increasing benefits for later retirees.
John Kasich: There’s nothing on Kasich’s website about retirement security, but he has been quoted as saying that he’ll have legislation to fix Social Security within the first 100 days of his administration, according to AARP.
But even though there’s not much meat on the bones on Kasich’s website, AARP suggests that Kasich would increase the retirement age; means-test high income, and index benefits to prices.
Kasich is the only candidate to propose indexing benefits to prices, according to AARP. According to a transcript of Kasich’s remarks on C-Span, he said this in October about Social Security: “…We need to look at the issue of raising the retirement age. We do need to have a indices of prices and not both prices and wages. Those things will get us in a pretty good place, and we have to think about a disconnect of what we pay in and what we get out. But Social Security is so sensitive it has to be stabilized, and I’ve got to let you in on something. We’re going to have to include some Democrats in this who understand this program needs to be fixed.”
We received no response to email requests to Kasich’s press office asking for more information.
SocialSecurityWorks.org notes the following about Kasich’s stance on Social Security: “In 1999 when he was House Budget Committee Chairman, he had a plan to deeply cut and partially privatize Social Security. During the current campaign, he has said he would cut Social Security for future beneficiaries and was quoted as telling an individual who objected, ‘you’d get over it.’ He has expressed interest in raising both the retirement age and the early retirement age, as well as means-testing benefits. He’s also implied that he still supports some form of privatization.”
Ted Cruz: According to AARP, Cruz, like Bush, Kasich, and Sen. Marco Rubio, would increase the retirement age for future beneficiaries. And like Bush, Cruz wants to implement a chained CPI for all urban consumers (C-CPI-U) to reduce COLAs. He, as well as Ben Carson, also wants to create private accounts for Social Security.
In the past, Cruz has called Social Security a Ponzi scheme. Watch Cruz on Social Security: “Ponzi scheme.”
Marco Rubio: Rubio has, like Bush, outlined his plans to fix Social Security. According to his website, Sen. Rubio would make no changes to Social Security and Medicare for those in or near retirement. For future retirees, he would:
- gradually increase the retirement age for future retirees, to keep up with changes in life expectancy;
- reduce the growth in benefits for upper-income seniors while strengthening the program for low-income seniors;
- exempt Americans over 65 who wish to keep working from the payroll tax, strengthening the economy and seniors’ savings;
- abolish the Retirement Earnings Test, which discourages work and does nothing to help Social Security’s long-term solvency.
Culled from MarketWatch
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