Eric Kingson and Nancy Altman write for the Daily News on the Social Security Trustees Report, which confirms the solid ground upon which Social Security sits. Notwithstanding the pandemic, Social Security has continued to pay benefits to tens of millions of Americans.
Social Security represents about 5 percent of GDP. It will take until the end of the 21st century for it to represent 6 percent of GDP. The increase makes complete sense given that the population of older Americans is growing both in numbers and as a proportion of the population. Older adults will represent 23 percent of the population, 94 million people, by 2060.
Most other developed nations spend a far larger share of GDP on Social Security benefits. For example, Social Security represents 11 percent of GDP in France, Germany and Portugal.
Social Security has funds to pay full benefits until 2034. (NB: That’s 13 years out. And, many fewer people were working and contributing to Social Security than usual last year. With wages rising, it would not be surprising if the life of the Social Security Trust Fund grows by next year, with no Congressional intervention.) Even if additional Social Security payroll contributions in the next few years do not extend its life, it would still have funding to pay 78 cents on the dollar. Of course, that is not acceptable; and, Congress would likely make up any shortfall.
That said, Social Security benefits need to increase. More and more Americans are facing a crisis in retirement. They do not have the income they had in the past because employer-sponsored pensions are disappearing and most people do not have enough money in their 401(k)s to maintain a decent standard of living once they stop working.
Income inequality has only grown since the pandemic. In the past, Social Security succeeded at reducing income and wealth inequality. It fostered a strong middle class. It could do so once more if wealthier Americans paid as much proportionately into Social Security as less wealthy Americans. Congress simply could eliminate the cap on Social Security contributions, which is now $142,800 and then easily increase Social Security benefits.
We also need national paid family and medical leave to improve the economic security of American families, along with guaranteed universal health care. We’ve had only limited progress on these fronts since Social Security’s enactment–even though they were contemplated back then. Medicare, Medicaid and the Affordable Care Act have made a significant difference for some cohorts of the population. But, there’s so much more to do.
President Biden is calling for paid family and medical leave as well as new Medicare benefits and better coverage of home and community-based care through Medicaid. The public increasingly stands firmly behind these benefits. The US–the wealthiest nation in the world–has the means to deliver these benefits. And, these benefits would go far in ensuring the well-being of all Americans.
Here’s more from Just Care:
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