Social Security: A Controversial Call to Raise Age of Eligibility

Article excerpt

Bernard Wasow was making light of the disappearance of a favorite topic of his work, Social Security. "It has sunk out of sight," says the senior fellow at the Century Foundation, a liberal think tank.

Well, not quite. Last week the American Academy of Actuaries issued a rare "public interest" statement advocating raising Social Security's age when an eligible retiree receives full pension benefits another two years to 69. (A 1983 law boosted the age gradually from 65 to 67.)

"Holding the retirement age constant is a certain prescription for future financial problems," the 16,000-member academy stated. "Raising it to reflect increasing longevity would contribute to solving those problems."

Such a change would be equivalent to about a 14 percent average cut in Social Security retirement benefits.

Since 1 in 4 American families receive some form of Social Security benefit and since the two presumed presidential candidates differ sharply on their reform proposals for the nation's most popular safety net, the issue will likely be in the news again before the fall election.

Certainly the Democrats hope it will. They are trying to paint Republican presidential candidate John McCain as seeking the same failed goal as President Bush, the partial privatization of Social Security for younger workers.

Social Security popped up last month when Senator McCain said during a town hall meeting in Denver: "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

Democrats and liberals leaped on this remark. They noted that Social Security benefits have always been financed by the working generation, that indeed this money transfer accounts for one-fifth of the entire federal budget.

It remains something of a mystery what changes in Social Security McCain would advocate if he wins the election. He promises not to raise the Social Security payroll tax, but then says everything is on the table. McCain's official campaign website (johnmccain.com) lists 16 topics as "issues" and deals with them in some detail. But not Social Security.

Barack Obama's website (barackobama.com) devotes almost three pages to Social Security. It notes his opposition to both hiking the retirement age "for hardworking seniors" and to privatizing Social Security. Senator Obama's plan calls for "shoring up" the program by applying the 6.2 percent payroll tax to income above $250,000 a year. This year, the cap subject to the tax stands at $102,000 (higher than the $97,500 cited on his website). …