It’s about time that one of the herd of 2008 Presidential candidates stuck out their neck over Social Security and got press coverage for doing so. I’ve seen this mentioned in a few places, but I’m quoting Google’s copy of the AP report:
But during an interview on NBC’s “Meet the Press,” Obama said subjecting more of a person’s income to the payroll tax is the option he would push for if elected president.
He objected to benefit cuts or a higher retirement age.
The article goes on to mention that Obama seems to be leaning towards a “doughnut hole” approach to the FICA tax cap, in which the cap on income subject to the FICA tax would remain more-or-less in place, but upper-tier income would be subject to withholding.
There is a well-known menu choices available to improve the financial standing of Social Security (which is expected to tap into its piggy bank filled with federal IOU’s in 2017, and lack the funds to pay expected benefits in the 2040’s). Those options include adjusting the income cap, adjusting the FICA tax rate, adjusting the benefits schedule (or the COLA indexing, which is kind of wacky as it is), and adjusting the prescribed retirement ages.
(Note the lack of “private accounts” from that list of options. While a reformed Social Security could include an element of privatization, accounts such as those proposed by Bush a couple of years ago aren’t generally considered a viable standalone element of solving the financial shortfall.)
While focusing on the income cap isn’t necessarily the approach I’d select, I can hope that the media’s attention might last long enough to get a healthy debate on Social Security going.
Of course, the mainstream media seems to be silent on Medicare already having to tap its trust fund (adding to the pressure on the national debt), and the expectation that it will be in a negative situation in just a few years.
P.S. If you want to try your hand at mixing and matching among the possible reforms to Social Security, you might want to check out the American Academy of Actuaries’ Social Security Game.