(FiveNation.com)- Social Security has often been a hot topic of debate in Washington, with legislators and presidents over the last few years throwing out ideas on how best to handle the program and its potential financial challenges ahead.
Recently, President Joe Biden criticized Republicans who suggested that the federal program should be cut. But, now, a new report is suggesting that a group of Senators from both sides of the political aisle are working on a potential compromise that would increase the age of retirement to help ease some of Social Security’s pending issues.
Earlier this week, reports surfaced that Democrat and Republican senators are working to negotiate a new change to the Social Security program that would raise the age of retirement “gradually” until it reaches 70 years old. The group, led by Independent Maine Senator Angus King and Republican Louisiana Senator Bill Cassidy, is looking to make this change as part of a larger overhaul of the program.
Raising the retirement age isn’t the only option that’s being discussed, according to media reports. Other options include making changes to the program’s benefits formula “from one based on a worker’s average earnings over 35 years to a different formula that’s based instead on the number of years spent working and paying into Social Security.”
A sovereign wealth fund would also be created under the senators’ proposal. This would be “seeded with $1.5 trillion or more in borrowed money to jumpstart stock investments.” If the new fund weren’t able to generate a return that’s high enough, then the payroll tax rate and the minimum taxable income would have to increase.
In a statement, spokespeople for the two senators who are heading the bill said:
“This is an example of two leaders trying to find a solution to a clear and foreseeable danger. Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. Indeed, many will receive additional benefits.”
While the proposal has bipartisan support, many pundits believe that it would have a hard time getting a majority of the liberal party members to jump on board.
Commenting for a story about the plan published in Semafor, an official with the White House said:
“The president has not endorsed a specific proposal but has made clear that he opposes Social Security benefit cuts. He does welcome proposals from members of Congress on how to extend Social Security’s solvency without cutting benefits or increasing taxes on anyone making less than $400,000.”
The reason why so many people in Washington are focusing on Social Security is that the plan is forecast to not be able to fully pay out benefits beginning in 2034. That’s why people are putting forth proposals that would change the program’s formula so that the funds could last longer.
The problem to this point, though, is that none of the proposals that have been put forth have even been able to make it out of a congressional committee. Whether this new bill will suffer the same fate is yet to be seen.