Shocker: Right-Wingers Who DON'T Want to Destroy Your Retirement? A Promising New Trend in Washington
Photo Credit: Image by Shutterstock
Stay up to date with the latest headlines via email.
A remarkable thing happened at a U.S. Senate Finance subcommittee hearing Wednesday on America’s retirement crisis and Social Security. Despite initial remarks from senators and experts who stuck to predictable talking points from the right and the left, none of the Republicans or any of their experts said that benefits could not be increased—at least for America’s poor.
Instead, a fairly serious discussion ensued. Well-respected economists on both sides of the aisle agreed it would not be hard or costly to shore up benefits for the poor by as much as 10 or 15 percent, which would markedly improve their quality of life. While no specific commitment was made on where this discussion would go next, it was a sign that the entitlement reform debate is moving beyond just cuts and austerity.
“I have argued for a more far-reaching reform, similar to what you have in New Zealand or the U.K., where every retiree receives a flat benefit at the poverty level. The idea is that you take poverty among [America’s] seniors, which today is at 9 percent, down to zero percent,” said Andrew G. Biggs, an American Enterprise Institute scholar who was the head of Social Security research in the George W. Bush administration.
“On top of that, if you want to have a benefit above poverty, we need to sign people up for employer-sponsored plans or IRAs or something along those lines,” Biggs continued. “Social Security—I’m not going to say that it does not cut poverty. Clearly it does.”
Some of Biggs’ other ideas did not sit well with progressive economists, such as saying that benefits for middle-income earners were more than sufficient and could be cut, as well as suggesting it was a bad idea to raise taxes on wealthier Americans to better fund Social Security. But after years of threatened cuts to entitlements by the GOP and championed by Wall Street titans who want to avoid higher taxes, a serious discussion about updating the safety net was seen as a striking development.
“It was encouraging,” said Dean Baker, co-director of the Center for Economic and Policy Research, who also testified at the hearing. “We talked about increasing benefits. No one stood up and said we can’t do that. We have had our backs against the wall for more than a decade. They’ve been saying it has to be cut and by this much."
“Now we are talking about people ensuring they have a decent retirement,” he continued. “We have really moved the ball… I don’t take anything for granted in Washington, but I actually think we can do something positive instead of stopping something negative.”
Baker credits the outspokenness of a handful of U.S. senators—most notably Elizabeth Warren, D-MA—and the groundswell they have sparked for the shift in tone. The Senate hearing was convened by Subcommittee Chair Sherrod Brown, D-OH, who has been an outspoken supporter of modernizing Social Security by increasing benefits and raising the cap on the portion of income taxes that are taxed to fund it.
Pushing Talking Points Aside
Sherrod Brown said Wednesday’s hearing would be the first of several on addressing America’s retirement crisis and fortifying Social Security. It began with Brown reciting a litany of reasons why aging Americans are worse off than previous generations and how tens of millions of people will not be able to maintain their lifestyles if they stopped working.
“One-third of Americans aged 45 to 64 have nothing saved for retirement at all,” he said. “The numbers are no better for workers with a retirement plan. In 2010, 75 percent of Americans nearing retirement age had less than $30,000 in their retirement accounts. For minority workers the situation is dire… 80 percent of Latino households age 25 to 64 have less than $10,000 in retirement savings.”