Tuesday, December 20, 2016

ENTITLEMENTS: A First Whack At Social Security

Entitlements: Donald Trump has largely been silent on entitlements, but it's a problem he's going to have to face eventually. He may not have a choice: Republicans, emboldened by unexpectedly keeping control of Congress, are already starting to move.
A new plan put forth by Rep. Sam Johnson, R-Texas, who chairs the subcommittee on Social Security, takes a badly needed first step toward a debate over comprehensive reform of Social Security. His plan would actually return the program to solvency — thereby ending a source of fiscal conflict between the old and the young in the coming decades.
His ideas are surprisingly modest in scope, but when added up would have a significant impact on outlays.
It starts by not raising taxes to pay for more benefits — the mistake that was made during the last major Social Security reform in the early 1980s.
What his plan does do is gradually raise the retirement age to 69, while slowing the growth in benefits for those with higher incomes. The current Social Security benefits formula relies on an inflation measure that most economists and actuaries agree overstates inflation; Johnson's plan would use the more realistic "chain-weighted CPI." And couples with more than $170,000 in income would get no cost of living hikes at all. And it would limit spousal benefits for high-income retirees. ...
Read the rest of this IBD editorial HERE.

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