Social Security and Medicare must be strengthened, not weakened. The retirement age must return to age 65 for all. The financial contribution of retired people to Medicare must be reduced, not increased.
Social Security is already the primary retirement income for many Americans and will be for more as U.S. companies refuse to offer defined benefit retirement plans. Popular 401(k) plans don't provide an adequate retirement. The stock market is not designed to provide a safe retirement for ordinary people, it is designed for speculation.
Many Americans are simply not able under our economic system to earn enough money to have a decent retirement and pay for the rapidly increasing costs of health care.
From 1947 to 1977, wages rose along with productivity. This rise was connected to high rates of unionization. (We also had high taxes and high economic growth). Defined benefit pension plans were expected at that time. Because wages have not risen along with productivity for so many years, many Americans are earning much less than they should. We can't ask people who are making less money to sacrifice entitlements that they have earned.
We must and will lower the retirement age because the last thing we would want as a nation is to force people to work until they die at high-stress/low-pay jobs. There won't be any jobs for young people if older people are holding on to their jobs to avoid being thrown into poverty.
The United States is not out of wealth. We have plenty of wealth. We are at a decision point. The question is: Will we let the wealthy pundits and the wealthy politicians sacrifice the standard of living and the health care of the majority of the people to please taxpayer-subsidized Wall Street and big banks?
How do we pay for strengthened Social Security and Medicare?
Social Security and Medicare both have trust funds. Social Security has $2.6 trillion in the trust fund now from money deducted from your paychecks. The money that comes in is used to pay current benefits. The government borrows the surplus money in the trust funds to pay other expenses (the cost of wars in Iraq and Afghanistan for instance) instead of letting it stay in a separate account.
The math to increase Social Security benefits is not difficult. The Federal Insurance Contributions Act deduction of 6.2 percent for Social Security and 1.45 percent for Medicare is only on the first $106,800 of income. The deduction could go up to the first $200,000 or be applied to all income if we want to continue to use the surplus to pay for things besides Social Security.
Anne Braden, the late civil rights activist, said, "Some Americans have been misled into believing that entitlements (such as Social Security and Medicare) benefit blacks and Mexicans and therefore must be reduced." The reality is that people who receive entitlements have earned them in exactly the same way that chief executives have earned their massive salaries: through work.
One of the ways to strengthen Social Security is to create more jobs with more people paying into Social Security and Medicare. Unearned income (capital gains, dividends) is being taxed at only 15 percent so the big corporations have little interest in creating good-paying jobs with good benefits for ordinary people when the companies can use their assets to make more money through speculation. Increased taxes would inspire them to invest in job creation, not speculation.
We are not about to let a group of wealthy pundits and politicians sacrifice the standard of living of ordinary people to create a national balance sheet that appeals to a government-subsidized, failed corporate elite.
We know what we have to do. We will strengthen Social Security and Medicare because we know it is the right way to use the wealth of our country.