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Retirement Planning > Social Security > Social Security Funding

Debate: Can Sen. Manchin Save Broken Social Security, Medicare Systems?

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Sen. Joe Manchin (D-WV) has indicated his willingness to reach across the aisle and work with Republicans on reforming the Social Security and Medicare programs. His recent comments indicate that he will work with the GOP to work on improving solvency while also taking action to reduce the national debt.

Manchin’s comments are in stark contrast with many Democrats who have attacked GOP plans to prolong the solvency of these two programs by raising the ages for qualification and taking other similar steps.

We asked professors Robert Bloink and William Byrnes, authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about Manchin’s latest indication that he may support GOP plans for Social Security and Medicare reform.

Below is a summary of the debate that ensued between the two professors.

Their Votes:

Byrnes
Bloink

Their Reasons:

Byrnes: The bottom line here is that we have a system that’s broken, and we must find a way to fix it before the clock runs out and these programs are simply bankrupt. Manchin’s willingness to work across the aisle to save these failing systems is a positive step in the right direction. New GOP proposals would gradually continue to increase the full retirement age and increase the age for Medicare eligibility, which is a reflection of the fact that Americans are working and living longer than ever.

Bloink: Yes, we need to focus on saving these valuable entitlement programs. These most recent GOP proposals, however, are tantamount to a reduction in benefits. Reducing benefits for hardworking Americans is not the way to go about saving Medicare and Social Security. We save Social Security by increasing the earnings cap to increase Social Security tax revenue.

Byrnes: Democrats who rail against recent GOP proposals to raise the age of entitlement because it’s the equivalent of a benefit reduction are overlooking one important fact: When Social Security eventually goes bankrupt, every American will immediately begin receiving a reduced benefit — and the reduction will be much more significant. That’s because only the tax revenues that are earmarked for Social Security will be available to fund the program — and that’s much less than we need to pay full benefits.

Bloink: We have to remember that it’s the lowest earners who actually have the shortest life expectancies, the most physically demanding jobs and thus the most pressing need for benefits at an early age. When you raise the age for entitlement, that’s creating an even more inequitable system than the one we currently have. It penalizes the Americans who rely on Social Security the most instead of putting their needs first.

Byrnes: Tax hikes aren’t the way to save the Social Security program. While we don’t have concrete details on the GOP plans, we know they won’t involve tax hikes. Gradually raising full retirement age to 69 is simply a reflection of the reality that life expectancies have risen dramatically since the Social Security program was created. This is the most painless way to shore up the Social Security program’s solvency over the long term without raising taxes yet again.

Bloink: Current GOP proposals seem to be working backward. Yes, raising the age at which Americans qualify for full retirement benefits made sense, and we’ve already implemented a program to gradually raise full retirement age from 66 to 67. Further raising the age of eligibility would be a much more drastic step, given the fact that the recent raise hasn’t “saved” Social Security like so many argued that it would.

Our focus now needs to be on raising the earnings cap so that we’re actually increasing the amount of revenue that is earmarked for Social Security each year — remembering that we’ve already executed the “increase full retirement age” strategy, and it’s now time to focus on the other side of the equation.


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