Where They Stand: Meuser, Wolff On Social Security
The GOP and Democratic candidates for the 9th Congressional District agree that Social Security benefits should not be cut for future generations.
They don’t agree, however, on how to make sure that projected shortfalls in the 83-year-old program do not force such cuts or changes upon retirees sometime in the 2030s.
“It is a priority for me to protect Social Security. They worked their whole life for that. It is an important part of people’s income in this country,” Democrat Denny Wolff, a Columbia County dairy farmer, said Thursday. Therefore, he wants to raise the cap on wages liable to the tax.
Republican Dan Meuser, a Dallas businessman, said he believes the government must foster a growing economy which will generate the income to keep the program solvent and obviate the need for any change.
The men are vying for the seat in the Nov. 6 General Election.
The Federal Old-Age, Survivors and Disability Insurance, commonly called Social Security, for which every American is issued a number, was created in 1935 during a time of nationwide financial insecurity, to provide support for elderly and disabled Americans. It is funded mainly by payroll taxes — currently employers and employees each pay 6.2 percent on income up to a ceiling of $127,200. The money is placed in a pair of trust funds, the Federal Old-Age and Survivors Insurance Trust Fund, and the Federal Disability Insurance Trust Fund, which are together known as “The Social Security Trust Fund.”
Due to the rise in population after World War II, which produced the baby-boomer generation, that generation’s reduced fertility rate, overall extended life spans and rising costs, the Social Security Administration has made projections occasionally about when the trust fund may be exhausted if current tax rates and benefits remain the same. Currently, 2037 is the projected date, after which there will be no reserve in the fund and the program will only have annual tax income to pay benefits. That will only be enough to pay 75 percent of benefits.
Proposals to avoid that crisis include raising the current contribution rate by 1.4 percent, raising the age at which benefits can be collected, cutting benefits, lifting the payroll ceiling, preventing retirees who have other sources of income greater than a certain amount, or monkeying with the way benefits are calculated.
Similar fears exist over Medicare, with projections that its trust fund will be broken in 2028.
Not everyone believes that the Social Security system has to be changed.
On Tuesday, Meuser said that a growing economy will generate adequate income for the trust fund by the 2030s, provided the federal government enacts pro-business and expanding trade policies. There will also be some demographic shrinkage due to the passing of the baby-boomer generation.
“The solution for Social Security solvency is more jobs, higher wages, more tax payers in the work force, pro growth initiatives ... the economy booming,” he said. “A pro-growth solution does marvelous things to the projections.”
Meuser said that the way to have a big economy is to have small government. He said that from World War II to 1995, the United States economy grew 40 percent, outpacing the European Union. However, since then, the EU has outstripped the U.S., which he blames on regulations. Getting rid of unnecessary regulations, encouraging economic growth and having a balanced budget — which he called “very doable” — is the answer.
He believes the same thing that will make Social Security solvent will work for Medicare, demographic change and a growing economy; however, that program also needs some change, according to Meuser. Along with “cutting bureaucracy,” he would allow Medicare to use generic drugs to cut costs.
“We don’t want people to be fearful they won’t have medicine when they turn 65. Our job is to make do with what we have,” he said.
Wolff thinks that although the program is doing well now, that only means that now is the time to take measures to keep it that way.
“As a business man, I know you certainly need to look ahead and plan ahead. The numbers right now show we’re in good shape,” he said.
He agrees with prognostications that the trust funds will be in trouble in the 2030s and benefits could fall by at least 20 percent or more.
“That is not an acceptable option,” he said.
The answer he favors is rasing the cap.
The cap, or payroll ceiling, set by law and occasionally adjusted for inflation, is currently $128,400. Although he did not have specific rates and amounts in mind, Wolff would like to see the ceiling raised enough to increase the amount flowing into the fund so that it can be healthy enough for future generations.
This is the fix for which he found the strongest support among his would-be constituency as he has campaigned around the district.
Therefore, he opposes raising the contribution tax rate and he is against cutting benefits or raising the age one can collect.
For Medicare, Wolff wants it to have the same power to negotiate drug prices that Medicaid and the VA have. He said the cost of prescription drugs is out of control and allowing the negotiating would save billions. The 9th Congressional District is made up of all of Schuylkill, Carbon and Columbia counties, and portions of Berks, Lebanon, Luzerne, Montour and Northumberland counties.
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