Three Republican Senators “on Wednesday will propose a Social Security reform package that would raise the retirement age to 70 and cut benefits for the wealthy,” The Hill reports.
Sens. Lindsey Graham (S.C.), Rand Paul (Ky.) and Mike Lee (Utah) previewed their proposal on Fox News, saying that it will put the entitlement program on a long-term path to solvency without raising taxes.
The senators said that their plan would gradually raise the retirement age from 67 to 70 and would not affect individuals age 56 or older. Graham said that the proposal uses the same formula Congress used to raise the retirement age from 65 to 67, so that people born in 1970 would become the first group to have a retirement age of 70.
Senator Lee said that the “group would like to see the plan brought up this year, but that he would not move to attach it to other legislation.”
"This is a long-term problem. This doesn’t have to be inserted with the continuing resolution or in connection with the debt ceiling. This is something, nonetheless, we need to address this year," he said.
Comparison with debt commission proposal:
President Obama’s debt commission suggests similar changes to Social Security: raising the full retirement age to 69 by 2075 and cutting benefits for upper-income Americans.
Unlike the debt commission’s proposal, the GOP plan does not call for a payroll tax hike to bolster the trust fund.
Update: These three Senators have officially introduced their plan, called the Social Security Solvency and Sustainability Act. A press release provides further details:
- Reduces debt held by the public by $6.2 trillion by 2085.
- Eliminates the current difference of $5.4 trillion between benefits promised and what Social Security can actually pay.
- Creates a solvent and sustainable Social Security system that will be able to provide the benefits it promises to future generations without raising taxes.
- Gradual Increase in the Social Security Retirement Age – The senators propose a gradual increase in the Social Security full retirement age to 70 by 2032.
- Indexing the Retirement Age to Longevity – When retirement age of 70 is achieved, the full retirement age will then be indexed to increases or decreases in life expectancy. Indexing will help maintain a constant ratio of years worked to years spent in retirement. (see attached chart detailing current law and Social Security Solvency and Sustainability Act retirement age)
- Gradual Increase in the Early Retirement Age – The senators propose a gradual increase in the Social Security early retirement age from 62 to 64 by 2028.
- Slower Benefit Accumulation for Higher Lifetime Earners – After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth. Above $43,000, benefits will be calculated based on price growth.