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Martha Shedden

Retirement Planning > Social Security > Social Security Funding

Please Take Politics Out of Social Security Reform: Martha Shedden

By John Manganaro

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What You Need to Know

  • Martha Shedden was recently accepted into the National Academy of Social Insurance, following years of Social Security advocacy work.
  • She will continue to focus on improving politicians' and the public's understanding of Social Security.
  • There is widespread support among Americans for raising payroll taxes and lifting the tax cap, Shedden says.

When one sets politicking aside, there is far more agreement than disagreement about the ways to fix Social Security, according to a well-known Social Security reform advocate.

Last week, Martha Shedden, the co-founder of the National Association of Registered Social Security Analysts, announced that she had been accepted into the National Academy of Social Insurance.

As Shedden told ThinkAdvisor in a new interview, the NASI is a nonprofit, nonpartisan organization made up of the nation’s leading experts on social insurance. Its mission is to advance solutions to challenges facing the nation by increasing public understanding of how social insurance programs such as Social Security, Medicare and federal unemployment benefits contribute to economic security.

Shedden said her induction into the NASI was an important personal milestone after years of challenging advocacy work. Simply put, advocating for Social Security reform is often thankless and slow-moving work, and so joining up with the NASI feels like a concrete step forward.

But even more important than any sense of personal achievement, Shedden said, is the new opportunity to collaborate with her fellow NASI members on what she sees as her most important professional goals. These are, in a nutshell, to improve the public’s understanding of the Social Security program and to reduce the amount of “unnecessary partisan division” that has prevented the uptake of sensible and concrete corrective actions that the vast majority of Americans support.

More Agreement Than Disagreement

According to Shedden, a wealth of public survey data shows the vast majority of Americans actually agree on the importance of Social Security — and on the best ways to shore up the program’s finances.

NASI data, for example, shows nearly three in four Americans say they “don’t mind paying for Social Security” because they value the benefit for themselves and their families, and for the security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers.

Notably, Shedden pointed out, nearly nine in 10 Americans agree that current Social Security benefits do not provide enough income for retirees, and seven in 10 agree that Congress should seriously consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.

According to Shedden, even more important than the broad-based agreement about the importance of Social Security is the consensus about changes that could be made to ensure the program can remain finically viable for the long term. She pointed to an NASI trade-off analysis that shows seven in 10 Americans would support a package of changes that increases Social Security revenues, pays for benefit improvements and eliminates the projected financing gap.

Specifically, the vast majority of Americans say they would support a plan that would gradually eliminate the cap on earnings that are taxed for Social Security, currently set at $160,200 for 2023, especially if the benefits formula was adjusted to allow higher earners to garner a higher benefit in retirement. Similar numbers support the notion of slowly raising the Social Security tax rate that workers and employers each pay from the current 6.2% of earnings to 7.2%.

Shedden says the data is clear, and that the vast majority of Americans agree that it is critical to preserve Social Security benefits for future generations, even if it means increasing Social Security taxes paid by working Americans. More than eight in 10 agree it is critical to preserve Social Security benefits for future generations, even if it means increasing taxes paid by top earners.

Politics Are the Problem

Shedden said she was equal parts troubled and encouraged by the current moment in the national politics of the United States.

In the discouraging column is the fact that political leaders on both sides of the aisle continue to use Americans’ deeply felt beliefs about Social Security — and other major government programs — as a means of rallying their own base of support, often at the expense of eliminating the opportunity to strike what Shedden sees as “very attainable compromises.”

More encouraging, she says, is the fact that many lawmakers on Capitol Hill are putting together and introducing thoughtful pieces of legislation that would go a long way toward shoring up Social Security. For example, Shedden said she continued to closely track the Social Security 2100 bill and a variety of other reform proposals in Congress, such as the plan put forward by the Republican Study Committee to gradually raise the full retirement age to 70.

While she personally disagrees with the RSC’s age-based solution to Social Security’s funding woes, she still credits the lawmakers for putting forward a proposal and engaging in a difficult conversion with the American public.

“It is positive to see that many high-ranking legislators are getting engaged on this topic and offering their proposals,” Shedden said. “We only have about a decade to address the current projected funding gap. That may seem like a long time, but in reality it is not, and so it is crucial to keep up the current sense of momentum. The good news is that there are so many options for addressing the problem, and there is near-universal agreement among lawmakers and the public that something has to be done.”

The Public Plays a Part, Too

Shedden said the effort to get lawmakers to work together to address the Social Security funding issue is of paramount importance, but so is better educating the American people about “all things Social Security.”

For example, far too many Americans think the Social Security program is simply going to disappear at some point in the mid-2030s when the combined Old-Age and Survivors Insurance and Social Security Disability Insurance trust funds are depleted. In reality, the Social Security program will continue to function at that time, but benefits would have to be cut in the realm of 20% to 30%.

Shedden said another harmful perspective is that the Social Security program is “somehow going to bankrupt the federal government and the U.S. economy as a whole, and so we have to make dramatic cuts even if we don’t want to.”

“Really the opposite is true from a macroeconomic perspective,” Shedden said. “The program supports the U.S. economy by keeping millions of retirees out of poverty. The truth is that we cannot afford to not have a healthy and viable Social Security system.”

Pictured: Martha Shedden

John Manganaro

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