This multi-millionaire with a cushy desk job wants you to work until you’re 70
C’mon, Sen. Angus King, read the damned room. The independent senator from Maine, the state with the oldest population in the country, has decided that his 2024 re-elect requires that he talk with Republicans about tinkering with Social Security. And if it’s Republicans talking about it, you know it’s nothing good for the program or the people counting on it.
King, who caucuses with the Democrats, is leading the group along with Sen. Bill Cassidy (R-LA). One option they are talking about is to gradually increase the retirement age to 70. Yes, 70. That’s a fine thing for 79-year-old King and 65-year-old Cassidy to decide. After all, they’ll have no problem doing their jobs in their eighth decades and ninth decades, if they stick around. They’re senators!
It’s nice work if you can get it, being a senator. You can do it until you croak, provided the people keep electing you. You only have to show up on the job in Washington, D.C., for eight, maybe nine months out of the year, because of all the time you get for various holidays and, of course, most of August. You have people to figure out your travel. You have people to write your speeches. You have people to write your bills, if that’s something you feel like doing for your job. You have people to drive you around, and you have a person who manages all those people.
King also has no financial worries. In 2018, the last year from which statistics are readily available, he was a multi-millionaire, with a net worth of nearly $9.5 million. He was the 16th richest senator. Cassidy is practically impoverished in comparison, with just $1.1 million.
The other bright ideas these guys are kicking around are a sort of privatization scheme—a sovereign wealth fund that would be started with $1.5 trillion in borrowed funds. They would be a trigger in it so that if it failed to yield an 8% return, then both the income cap and the payroll tax would be increased at a rate to keep the program solvent for 75 years.
“You could really take a fund and, with certain assumptions, take all your revenue from there,” Cassidy told Semafor, in an interview. “Certain assumptions” is doing a lot of work there. Also note that this comes with a tax increase if it doesn’t work, in what would likely be an economic downturn—that is most likely the reason the fund wasn’t making expected returns. Also, that’s horribly regressive, with the lowest earners being hit much harder than the wealthy.
Besides making us work until we’re 70, their other brilliant idea is easily just as bad and regressive. It would completely upend the existing benefit formula used to determine monthly payments to be based on years worked instead of the current formula that uses the average earnings over 35 years worked. The existing formula is flexible, to allow for people leaving and entering the workforce to return to school, because of an illness or injury, or to take care of young children or sick or elderly family members—or whatever life reasons that interrupt work.
The current formula adjusts your earnings to take into account historical changes in wages, and then takes the highest-earning 35 years to calculate the average indexed monthly earnings (up to the maximum taxable earning cap, now at $160,200). The system is geared toward making sure the lowest-earning workers get the maximum possible benefit.
Just counting years worked “rewards people with more years of work and penalizes people with fewer years of work,” Kathleen Romig, with the Center for Budget and Policy Priorities, told Semafor. People with uninterrupted work histories could benefit, she said, but “on net, it’s definitely a cut.”
There’s a much simpler way to shore up Social Security’s long-term health: Lift the earnings cap subject to payroll taxes. Even a Republican—and Joe Manchin!—have said that’s an option. The problem is they want to condition doing that on a bunch of things like raising the retirement age and making other cuts.
The other independent from New England has better ideas and the ear of President Biden. Sen. Bernie Sanders (I-VT) met with Biden in late January to talk about his proposal to bolster Social Security’s finances by making the nation’s rich pay more in payroll taxes. He want’s to apply the payroll tax to income over $250,000 a year which would give the program another 75 years of solvency. He also pitched Biden on his plan to increase existing benefits for everyone on Social Security with an additional $200/month.
Sanders is arguing the Democrats have to counter all this bullshit from Republicans and King and Manchin about needing to Social Security. “It is not enough to point out the reactionary, anti-worker vision of the Republican Party. We have to present a positive, pro-worker alternative,” Sanders said. “The truth is that Social Security does have a solvency problem, and we have got to address that.”
The most effective way to take it off the deficit peacocks’ chopping block is to take away the narrative that it’s doomed. The most effective way to do that is to start making the wealthy pay a fair share.
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