nances than he ever imagined. His
view: “Cut Social Security? No!”
Ernestine Bosley, who lives
in Ravenswood, W.Va., has just
marked her 70th birthday. There
wasn’t a lot to celebrate. She spends
most of her time taking care of her
husband, Walter, who has cancer.
The Bosleys rely entirely on Social
Security benefits—which total less
than $2,000 a month for both.
“You try to live on that, honey,”
Bosley says. “So when I hear talk
about cutting Social Security—
it stinks! And if they cut it in the
future, for people in their 50s to-
day, why, it’ll be just as bad. They
shouldn’t even be talking about
But they are. Critics have been say-
ing for years that we can’t afford to
maintain, let alone strengthen, the
program because it’s going broke.
Polls show that many young people
especially believe that “Social Se-
curity won’t be there for me.”
So: true or false?
A new report by the U.S. Senate
Special Committee on Aging says
much the same thing. It lays out
options that could close the projected long-term gap—without
cutting benefits. For example:
; Lift the cap. Earnings above a
specified level, currently $106,800,
aren’t currently taxed to support Social Security. The cap inches up year-
Your Money ;
Bud Bickley, 73, Tremont, Pa.
“Social Security is much more important than I thought it would be.
I figured I’d find part-time work, get some extra income, but there’s
nothing going on around here. I used to work in a factory that made
parts for the space shuttle, but all that work went someplace else.
Cut Social Security? No!”
to-year based on increases in average
wages, but raising it more would have
minimal impact on high earners while
closing much of the projected gap.
; Raise the payroll tax rate—but very
gradually, such as by 1/20th of a percent each year for workers and employers over the course of 20 years.
; Extend Social Security coverage
to more workers, including newly
hired state and local government
employees. This would bring more
tax revenue through the door.
; Earmark revenue from the estate
tax for Social Security.
; Bolster Social Security’s reserves
by diversifying its trust fund beyond
government bonds to include higher-yielding commercial investments.
“Contrary to popular belief, the sky
is absolutely not falling for Social Security,” says Sen. Herb Kohl, D-Wis.,
who chairs the Special Committee on
Aging. “With modest tweaks, we can
ensure solvency and even strengthen
benefits for those who count on their
monthly check the most.” ;
Thomas N. Bethell is a Washington
writer and policy analyst.
of those under 50 say they
expect to be able to rely on savings and investments for most of
their retirement income, while ...
over 50 share