Alex Brower on the Social Security Funding Gap and Solutions

Frederica Freyberg:
The latest official report on the solvency of Social Security forecasts the retirement and disability programs will be insolvent in 2035. It’s not that the program won’t have money to pay any benefits, but it’s when the Social Security Trust Fund reserves of $2.78 trillion will be depleted. What that means is that without action by Congress, the program will only have enough money in 2035 to pay 83% of benefits, not 100%. Now, that eventuality has advocates for seniors sounding the alarm. Alex Brower is executive director of the Wisconsin Alliance for Retired Americans. He joins us now. Thanks a lot for being here.

Alex Brower:
Yeah. Thank you so much for having me, Frederica. I appreciate it.

Frederica Freyberg:
So for people looking to be of retirement age in 2035 and beyond, the prospect of paying into Social Security for their whole, working lives and not getting their full benefit seems unfair.

Alex Brower:
It’s completely unfair, honestly. We believe that — and actually, the Wisconsin Alliance and other advocacy organizations, we believe that not only should people receive the benefits they’re entitled to, but they should be receiving more benefits and that Social Security should be expanded, the agency modernized and remain solvent for decades and decades to come.

Frederica Freyberg:
You believe that current beneficiaries should be receiving more in their Social Security benefits?

Alex Brower:
That’s correct, yeah. Our organization is supporting a bill in Congress right now, the Social Security Fairness Act that’s been introduced by Senator Sanders and Elizabeth Warren that actually expands by $200 per month benefits received to beneficiaries and also protects the solvency of Social Security by eliminating something called the contribution and benefits base, which is basically the cap on which income is taxed for Social Security purposes to have the richest Americans pay their fair share to help keep the program solvent.

Frederica Freyberg:
Does that particular piece effectively become a tax increase though, and how well would that go over?

Alex Brower:
Well, it is — what we’re advocating for, yes, it will increase taxes on the wealthiest Americans, who we need — need to contribute more to pay their fair share. Basically millionaires and billionaires in this country exist because of all the work that we’ve all done to contribute to their success. Everybody buys something on Amazon or at Wal-Mart or any of the department stores. Our roads that we pay for with taxes contribute to the millionaires and billionaires being able to get their goods to people’s homes, so no millionaire or billionaire is created in a vacuum. And so those individuals owe to our collective success, and that means everybody who is a worker currently has a full and dignified retirement. So, yes, we are asking the richest Americans to pay their fair share, but really, it’s pennies compared to the wealth that we’ve created for them by being American consumers.

Frederica Freyberg:
Because that cap on the withdrawal of FICA taxes is $168,000. Is that it? Anything over that, those people do not pay in?

Alex Brower:
That’s correct. When you receive a paycheck, like your viewers would know when you receive a paycheck, there’s a line called FICA, and that contribution, that deduction stops at $168,600. So if you make more than that, you don’t receive a FICA tax on that money. So it’s pretty much a regressive income tax, where the poorest Americans pay a hundred percent of their income is taxed for that and then the richest Americans don’t. The Social Security Fairness Act keeps that cap in place but raises it and lifts it for those making above $400,000 a year.

Frederica Freyberg:
So we know there are also discussions of raising the retirement age to shore up the program and that’s been done once, I understand, but doesn’t that effectively short people also?

Alex Brower:
That is correct, yeah. And there’s a study that just came out that showed that actually the raising of the retirement age back in the ’80s in the Reagan presidency actually shortened the life expectancy of seniors. So not only does that limit the number of years they’re eligible to receive benefits, but it actually limits their life expectancy because, as we all know, there’s a point in your life when you should be able to rest and retire from working. Right? And that is a right that every American should have, no matter what kind of job they had or what profession they worked in. We think everybody is eligible and do that, so raising the retirement age would only hurt retired Americans and senior Americans.

Frederica Freyberg:
How important is Social Security to the majority of retirees, including all of those in Wisconsin?

Alex Brower:
Extremely important. Every single retiree that I personally know depends on their Social Security check every single month and every retired American who is a member of the Wisconsin Alliance for Retired Americans depends on it fully. It drives our economy. It’s what keeps so many seniors out of poverty. We’re arguing that Social Security is one of the largest antipoverty programs that’s ever been created in the United States. We have a lot of choices in this country. I mean, all this is a political choice. Right? We could choose to roll back the clock and go back to the days before Social Security existed, but we would have seniors in poverty, living on the streets, and we don’t want that. We want everybody who has worked hard and contributed to this country to live a full and dignified retirement.

Frederica Freyberg:
Alex Brower, thanks very much. Thanks for joining us.

Alex Brower:
Thanks for covering this important issue, Frederica.