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Does Social Security Need an Overhaul or Just a Minor Fix?

May 7, 2012

AUSTIN, Texas - The Social Security Board of Trustees recently issued its annual checkup on the financial health of Social Security. The prognosis? The trust fund will be exhausted by 2033, three years earlier than last year's projection. And while some analysts are sounding the alarm bell, others say the news is not surprising, given the recent recession.

Nancy Altman, co-director of Social Security Works and co-chair of the Strengthen Social Security Coalition, says the program's foundation is strong, and Social Security can be kept solvent with relatively minor changes.

"There are many, many ways to bring that additional revenue in, keeping the fundamental structure there. It is a program that works and we should be strengthening it, rather than dismantling it brick by brick."

One suggestion by some policymakers is to increase the payroll tax cap. Currently no contributions go toward Social Security for income above $110,000 per year.

Other economists and lawmakers want to keep the current program for those 55 and older, but think younger workers should have the chance to invest over one-third of their Social Security taxes into private retirement plans.

Altman disagrees. She says the program is efficient the way it is.

"It covers everyone on a mandatory basis. So, if you start allowing people to opt out, it sounds good, it sounds like choice, but it would ultimately cause the whole system to unravel."

She believes the program provides guaranteed benefits, unlike people's 401(k) retirement plans and home equity.

According to the National Academy of Social Insurance, three in four Americans, across age groups and party lines, say it is critical to preserve Social Security, even if working Americans have to pay higher taxes.

Peter Malof, Public News Service - TX