Very conservative Republicanism took it in the teeth in yesterday's election, which could be good for retirement planning.
Tea Party candidates lost elections in Virginia and Alabama, while New Jersey, a Democratic stronghold, kept moderate Republican Chris Christie as governor.
In Cincinnati, voters overwhelmingly defeated Issue 4, which would have eliminated old-fashioned defined benefit pension plans for teachers, firefighters and other public workers. The National Public Pension Coalition released a statement saying:
"Yesterday, the voters of Cincinnati stood against the Tea Party and supported a secure retirement by defeating Issue 4, which would have eliminated traditional pensions. This was a vote in support of working families, and a vote to ensure that workers are able to retire with dignity."
This turn of events also appears to have added fuel to the movement to expand rather than contract Social Security. The dominant idea is to adopt a more generous cost of living formula known as the CPI-E, or Consumer Price Index for the Elderly, which supporters say reflects the higher-than-average increases older people face when they pay for health care and housing. Supporters calculate that the CPI-E would raise Social Security benefits by an average of $70 per month, rather than hold them down as does the rival proposal for a chained CPI.
Today, Cleveland-area Sen. Sherrod Brown, D-Ohio, jumped in to support a bill to adopt the CPI-E, sponsored by Senators Tom Harkin, D-Iowa, and Mark Begich, D-Alaska. Other outspoken supporters include both Hawaii Democratic Senators Brian Schatz and Mazie Hirono. The plan also has backing from the AFL-CIO, the National Organization for Women and MoveOn.
The bill would pay for the increase by raising the cap on wages subject to Social Security tax. In 2014, the wage cap will be $117,000. If everyone who made more than that paid taxes on all their wages, but did not receive any commensurate increase in Social Security benefits, Social Security's Office of the Chief Actuary says that would resolve the program's current shortfall and finance some proposed increases. Adding benefits so that high earners would get a modest increase would have a much less dramatic impact, with actuaries estimating that only 43 percent of the program's current shortfall would be covered.
Does this bill have much of a chance? President Barack Obama and the Democratic Party officialdom support the chained CPI. Republicans have been outspoken in their support of any effort to cut Social Security, but the GOP's largest block of supporters are older Americans who love Social Security. If Democrats, eager to keep the White House in 2016, support an increase to Social Security while the GOP doesn't, would that sway elderly voters to vote Democratic? Stay tuned.