People who are opposed to changing anything about Social Security are a loudmouthed bunch, but a recent study suggests that all their noise is much ado about nothing. Most reasonable people see the need to fix Social Security and are willing to make changes.
Voice Of the People, a new organization affiliated with the School of Public Policy at the University of Maryland, polled a representative sampling of voters and concluded that a significant majority of Democrats, Republicans and Independents would support four potential fixes to Social Security that together would eliminate 71 percent of the projected shortfall, according to Social Security trustees. Left unfixed, the shortfall will lead to the need for substantial cuts in benefits after 2034 -- a real retirement planning problem.
The four changes endorsed by voters were:
- About 79 percent approved reducing benefits for the top 25 percent of earners -- those with average earnings over their lifetimes of about $65,500 a year or more. This would reduce the Social Security shortfall by 7 percent.
- Some 78 percent would raise the full retirement age to 68, while maintaining the possibility of collecting a greatly reduced amount at age 62, reducing the shortfall by 16 percent.
- Another 83 percent would raise the cap on income subject to the payroll tax to $215,000, while continuing to pay high earners 15 cents on the dollar in benefits for every dollar they and their employers pay into the system. This would cover 30 percent of the Social Security shortfall.
- Finally, 75 percent would increase the payroll tax rate for both workers and employers from 6.2 percent to 6.6 percent. This would reduce the shortfall by 18 percent.
A smaller majority -- 52 percent -- would completely remove the cap on wages subject to Social Security -- while still paying high earners benefits worth 15 cents on every dollar they and their employers pay in. Adopting this and the other proposals would totally eliminate any shortfall.
Steven Kull, author of the report and senior research fellow at the University of Maryland, says he wasn't surprised that people were willing to endorse a solution to Social Security's problems, but he was surprised that Republicans, Democrats and Independents all had similar opinions about how to fix Social Security.
"Our leaders need to treat the public like adults and assume that they have the capacity to understand the issue and relate to it in an intelligent way," Kull says.
If you'd like to take the same poll that this group took, you can go to VOP.org and click on "Try a Simulation." Keep in mind that these proposed changes would not affect the promised benefits for people who are older than 48 years of age in 2014.