Plan to Save Social Security Pushed in the Senate

U.S. Senator Kay Bailey Hutchison (R-Texas) has unveiled the Defend & Save Social Security Act to save Social Security and prevent it from going into bankruptcy, without raising taxes or cutting core benefits.

Under current law, retirees’ monthly benefits would be cut nearly one-fourth, beginning in 2036. Hutchison’s plan would ensure Social Security’s solvency by gradually increasing the retirement age (over 16 years) to 69 and instituting a modest one percent reduction in the annual cost-of-living adjustment.

Under Sen. Hutchison’s proposal, anyone who is currently 58 years old or older would not be affected. For everyone else, the normal retirement age would increase by three months each year, starting in 2016. It would reach 67 by 2019, 68 by 2023, and 69 by 2027.

The Cost-of-living-adjustment (COLA) would be computed as is under current law, and under Hutchison’s plan, would be reduced by one percent annually. According to the Social Security Administration’s Chief Actuary, Sen. Hutchison’s proposal decreases deficits by $416 billion over the next 10 years and will subtract a total of $7.2 trillion from the national debt by 2085.

Sen. Hutchison enumerated the following reasons why Social Security reform cannot wait:

- According to the projections made by the Trustees’ 2011 report, Social Security trust fund assets will be fully exhausted by 2036.

- Under current law, retirees will have their Social Security benefits cut by 23 percent in approximately 25 years. In today’s dollars that would mean an average cut of $271 per month.

- The unfunded obligation of the Trust Fund over the 75-year period is $6.5 trillion, an unprecedented $1.1 trillion increase from projections made just one year ago.

Key Reforms of Defend & Save Social Security Act:

- Gradually raises the Normal Retirement age to 67 by 2019, 68 by 2023, and 69 by 2027.

- Gradually raises the Early Retirement Age to 63 by 2019 and 64 by 2023.

- Slows the growth in benefits by lowering the annual cost of living adjustment by one percent or about $11 dollars per month, as opposed to an average reduction of $271 per month if nothing is done.

- Does not affect anyone who is currently 58 years old or older.

- Does not raise taxes.

- Does not cut core benefits.

Also See:

EEOC Updates Guidance on Employer Use of Arrest and Conviction Records

Jobs Bill for New Veterans Would Enlist Local Business Leaders as Mentors

Domestic Partnership Benefits and Obligations Act Clears Senate Committee

Justice Department Will Not Challenge Worker Rights Consortium's Designated Suppliers Program for Collegiate Apparel

US Labor Department Publishes Revised List of Products Made with Forced or Indentured Child Labor