An economist who served under four presidents has endorsed a plan advocated by New Jersey progressive Democrat Lisa McCormick, who is collecting signatures in support of her concept to put Social Security on a solid financial foundation permanently, even if benefits are increased or the retirement age is lowered.
Robert Reich, secretary of labor in the Clinton administration and one of the most outspoken critics of the Trump administration and its policies and actions, recently spoke to McCormick about her plan to save Social Security and issued an endorsement of her idea.
“As a former U.S. Secretary of Labor, I know that the American standard of living depends on the strength of our social safety nets,” said Reich. “This is why I’m impressed by Lisa McCormick’s proposal to save Social Security and insure long term solvency of the nation’s pension system.”
“While 94 percent of U.S. workers pay Social Security tax on every dollar in their paycheck, the very richest Americans avoid Social Security taxes on most of their money due to the program’s cap on taxable earnings,” said Reich. “To correct this, she recommends that we ‘scrap the cap’ so very wealthy Americans contribute to Social Security at the same tax rate as the rest of us. I completely agree.”
Reich is currently the Chancellor’s Professor of Public Policy at the University of California, Berkeley. He’s written 15 books and created two acclaimed documentaries: Inequality for All, and Saving Capitalism.
“I talked to Robert Reich about my plan to fix Social Security because there are a lot of misconceptions out there,” said McCormick. “While Republicans have been saying Social Security is ‘broke’ or ‘bankrupt’ the simple truth is, there are reserves of nearly $3 trillion sustaining Social Security and if all the money flowing into the system stopped, retirees could still collect full benefits for years to come. Social Security is not out of funding.”
“However, the system does need to be fixed in order to keep it solvent in perpetuity,” said McCormick. “Americans should never fear that this government will be unable to meet its obligations when they are depending on Social Security payments.”
“Americans work hard and pay in to Social Security, so we are counting on it to be there but if our leaders do not act, future retirees could lose up to $10,000 a year,” said McCormick.
“Social Security is funded through deductions to everyone’s paychecks. We pay in while we’re working, and then collect benefits when we retire or become disabled. But not everyone pays equally into the system,” said McCormick. “While 94% of American workers pay Social Security tax on every dollar in their paycheck, most of the earnings of the top 1 percent – and especially the top 0.1 percent – escape most Social Security taxes due to the program’s cap on taxable earnings, which is $132,900 in 2019.”
“In other words, the very richest Americans stop contributing but it does not have to be that way,” said McCormick. “By simply requiring upper-income Americans to pay the same tax rate as middle-class families, Social Security’s benefits could be expanded, and its funding would remain in balance for decades beyond the longest projections.”
“Americans are facing an unprecedented retirement security crisis. Retirement wealth has not grown fast enough to keep pace with an aging population and the growth in inequality has exacerbated existing economic, racial, ethnic and educational disparities,” said McCormick. “Single people and women face particular challenges. All these problems can be fixed by making the very richest members of society pay the same tax rate that ordinary working people pay now.”
McCormick urged citizens who agree that Americans must fix Social Security without cutting benefits or jeopardizing retirees to sign the petition at her website: http://lisamccormicknj.nationbuilder.com/fix_social_security