Point of view

Social Security simply needs a few changes to make it stronger

July 15, 2014 

Let’s face it: Social Security is an intimidating topic. It feels daunting, with endless components – COLA, “Scrap the Cap,” CPI-E. The new Caregiver Credit Act of 2014, released last week, is yet another complication.

Why we aren’t having a larger public conversation about Social Security is understandable. Due to the program’s complexities, our short attention spans, media coverage and politicians’ framings, the discussion has become a can we keep kicking down the road.

But delaying the conversation makes Social Security harder to strengthen. Our upcoming statewide elections will have a direct effect on national Social Security policy, so the elections are a great place to start.

Social Security is working. It’s not in an urgent crisis, and it doesn’t need to be cut or dismantled, as some claim. But Social Security does need strengthening, and what’s not talked about is how uncomplicated the solutions actually are.

Take the case of Social Security’s role in retirement. What’s needed to retire is often discussed as a three- (or four-) legged stool: pension/investments, savings, Social Security and home ownership. This assumes, of course, we can all earn living wages, buy homes, save and invest.

Many policymakers talk as if everyone retires this way. Except for the most wealthy, that’s far from true. In fact, 88 percent of North Carolinians retire almost solely on Social Security, with an average benefit of $13,576 a year – only $1,131 a month. The four-legged stool is a good goal, but most North Carolinians end up with one leg: Social Security. And current limitations on Social Security make it a wobbly leg at best.

In North Carolina, retirement is often more like riding a unicycle, balanced by a single wheel. And, as Social Security stands, it’s like riding a unicycle with a flat tire, on a tightrope and in the wind.

To strengthen Social Security, we need elected officials who support three straightforward modifications:

Caregiver credit. U.S. Rep. Nita Lowey (D-N.Y.) just released the Social Security Caregiver Credit Act of 2014, an important step in assisting people who work reduced hours (or not at all) to care for our children, elderly and disabled. The caregiver credit gives an earnings credit in the Social Security benefit calculation while individuals care for a child under a certain age, a disabled family member or a senior. Unpaid caregivers are mostly women and low-income earners.

Scrap the cap.Everyone pays Social Security taxes on the first $117,000 of earnings, but then higher earners stop paying taxes. If everyone paid equal taxes, we could stabilize Social Security, a big step toward equality and poverty prevention. Even many Republican North Carolinians support scrapping the cap: In a recent poll, 52 percent of Republicans supported lifting the cap (22 percent were unsure).

Cost of Living Adjustment (COLA) Reform.Most retirees walk a tightrope, trying to make ends meet. To make sure retirees aren’t eaten alive by inflation and medical expenses, we should use the CPI-E (Consumer Price Index for the Elderly), a cost of living calculator that considers elders’ spending habits and adjusts for medical expenses. In a recent poll, 62 percent of North Carolinians supported a revised formula (27 percent were unsure).

Essentially, Social Security needs a chance, not cuts, not privatization, not inaction. Many North Carolinians – conservatives and liberals alike – are bystanders in the conversation, and we need to come forward and start the dialogue.

The first step is asking U.S. Sen. Kay Hagan and opponent Thom Tillis to more clearly state their positions on Social Security. Do they want to strengthen or cut it? Do they specifically support the Caregiver Credit Act, Scrap the Cap and COLA? The second step is to consider only candidates who support these changes.

We can’t delay this public conversation, and the upcoming Senate elections are the place to start. We need to force ourselves and our officials to take the lead on strengthening Social Security while we still can. If not, many of us face a very shaky retirement.

Elizabeth Dickinson is an assistant professor in the Kenan-Flagler Business School at UNC-Chapel Hill. Akiba Byrd is executive director of NC Fairshare, based in Raleigh.

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