America has established a federal redistribution program that collects payroll taxes from current workers to provide monies to retiring workers. The government is expecting a large amount of retirees within the next twenty years; they will have to propose plans to save the Social Security system effective as soon as possible. The possibilities are to reduce benefits, increase the retirement age, raise payroll taxes, and privatizing part of the system. Today's Social Security taxes crowd out other savings. Fixing the trust fund by raising taxes or cutting benefits would be fairly simple, but both approaches would only make Social Security a worse situation than it is in now. Although tax increases might be sufficient to pay promised future benefits, the economy would suffer severe consequences. Raising Social Security taxes enough to keep the government's entitlements promises to future retirees would require doubling or tripling taxes. That means taking approximately 30 to 40 percent of every worker's wages just to pay retirement benefits. Such tax hikes are not economically or politically feasible. Social Security reform must not reduce the benefits of current retirees. In addition, it must allow Americans of all income levels to build a nest egg for the future. Real reform will also guarantee that all workers receive an adequate minimum retirement income. The benefits of current retirees must not be reduced. Washington has a moral contract with those who currently receive Social Security retirement benefits, as well as those who are so close to retirement that they have no other options for building a retirement nest egg. Any real reform plan must guarantee in law that seniors receive every cent that they have been promised, including an accurate annual cost of living increase. As a first step to saving Social Security for future generations, Congress should pass a law giving every already retired American a contract that provides a...
