Tuesday, April 5, 2011

Munnell: To cut deficit, look to Social Security

Boston College's Alicia Munnell has a nice piece in the New York Times today looking at ways to fix Social Security. A quick cut:

The task force suggested four major changes: indexing the full retirement age (after it reaches 67) to improvements in longevity; switching to a measure of inflation that grows more slowly than the one now used to calculate Social Security's cost-of-living adjustment; gradually increasing the earnings subject to the payroll tax (and the basis for benefits) to about $180,000 from $106,800 today; and gradually subjecting both employer and employee premiums for group health insurance to payroll and income taxes.

Click here to read the whole piece.


PappyG said...

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http://bit.ly/goflF5 Join the debate, every weekday 9am (eastern) http://bit.ly/eN1pyf

Arne said...

"it cannot spend money it doesn’t have.

But in reality, scheduled Social Security benefits and current payroll taxes are included in long-term deficit projections by the Congressional Budget Office"

Munnel is suggesting changing the program because policy makers use a projection that does not conform to reality? Would it not be more reasonable to perform the analysis based on the moneys SS is actually allowed to spend?