Finally, an issue we can all agree on.
Further confirmation of the popularity of Social Security is found in a recent report from the National Academy of Social Insurance. It found strong support among Americans of all stripes for financially shoring up the system and improving benefits, with a majority saying they are willing to pay higher taxes to make it so.
According to the survey of over 2,000 Americans age 21 and over, large majorities of both Republicans and Democrats agree on ways to strengthen Social Security—without reducing benefits. Almost 70% of Republicans and 84% of Democrats agree “it is critical to preserve Social Security benefits for future generations even if it means increasing the Social Security taxes paid by working Americans.”
When asked the same question about top earners, 71% of Republicans and 92% of Democrats agree that they could pay more. Social Security taxes are paid by workers and their employers on earnings, but only up to a cap ($117,700 in 2014 and $118,500 for 2015). About 6% of workers earn more than the cap.
Majorities oppose measures to balance Social Security’s future finances by reducing benefits. Fully 75% of respondents oppose increasing the retirement age to 70; and 76% oppose reducing the cost-of-living adjustment (COLA) that retirees receive.
To gauge Americans’ policy preferences, the survey used “trade-off analysis”—a technique widely used in market research to learn which product features consumers want and are willing to pay for. The trade-off exercise allowed survey participants to choose among different packages of Social Security changes.
As lawmakers would do, they weighed how each policy change would affect workers, retirees and the program’s future financing gap, and then were asked to chose among different packages of reforms.
Seven out of 10 participants prefer a package that would eliminate Social Security’s long-term financing gap without cutting benefits.
The preferred package would:
- Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security. With this change, the 6% of workers who earn more than the cap would pay into Social Security all year, as other workers do. In return, they would get somewhat higher benefits.
- Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year, matched by the employer.
- Increase Social Security’s cost-of-living adjustment to reflect the inflation experienced by seniors.
- Raise Social Security’s minimum benefit so that a worker who pays into Social Security for 30 years or more can retire at 62 or later and have benefits above the federal poverty line.
Without any changes, Social Security would be able to pay only about three-quarters of scheduled benefits after 2037. The study’s authors claim this package would turn the projected financing gap into a small surplus, providing a margin of safety.
The package was preferred by large majorities across political parties and income levels. Fully 68% of Republicans, 74% of Democrats and 73% of independents favor the package, as do 71% of study participants with incomes above $75,000 and 68% of those with incomes under $35,000.
“This study drills deeper into public preferences than standard surveys to learn how Americans consider the consequences of their choices and decide what they are willing to pay for. It deserves close attention by lawmakers,” James Roosevelt, Jr., CEO of Tufts Health Plan and grandson of Franklin D. Roosevelt, who signed the original Social Security law in 1935, said in response to the survey’s release.