As America’s biggest social program, the Social Security program accounts for more than 20% of all government spending making it one of the single largest item in the federal budget. Before the Social Security Program, nearly half of the senior citizens of America could not support themselves after retirement with millions living in poverty. Today however, Social Security is widely popular albeit controversial. The controversy revolves around the debates over the long-term financial viability of the program. Proposers of the Social Security program insist that if money from the Social Security Trust Funds is not used for other purposes and if shared economic sacrifice is encouraged, then the solvency of the Social Security program would be assured.
Within the next 20 to 30 years, the Social Security Trust Funds will be empty if timely action is not taken. Although the Social Security program may still be alive then, the benefit of the Trust Fund would be non-existent and its financing would come primarily from payroll taxes with the income capable of paying only less than 80% of the future benefits promised(Martin & Weaver, 2005).
Recommendations that would improve the viability of Social Security for the next generation
Recommendations that address return on payroll contributions benefit adequacy and system financing are the ones likely to improve the viability of Social Security for the next generation.Delaying Social Security benefits: in the current low-yielding economic environment, an increase in benefits of 8% per year is appealing to most people even if it implies continuing to work in retirement. Reforms that focus on improving the efficiency of health care delivery and overall cost-effectiveness of health care will be crucial in addressing the challenges facing the viability of Social Security.
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Increasing the payroll Tax cap to cover 90% of all earnings means that those who top earners would be required to pay more towards Social Security and consequently, get slightly higher benefits. Although not capable of fixing all the problems of Social Security, this proposal will allow Social Security to pay for benefit improvements while keeping Social Security strong(Martin & Weaver, 2005).
Evaluation of recommendations
Delaying Social Security benefits increases benefits through earning credits for delayed retirement while one benefits from the increased Average Indexed Monthly Earnings employed in the calculation of the Social Security benefits. Rising health costs resulting largely from an ineffective health care system requires that reforms in the delivery system be encouraged towards improved care coordination for patients. This should cause a decrease in health costs the programs and for the American people. Patient safety should also be improved and reduced hospital readmissions that are preventable should be aimed for.The fact that tax increases are not favorable to the people creates a challenge in fixing Social Security program, as it is likely to be met with resistance from many quarters. However, with adequate communication and a phased implementation strategy, this proposal could work in strengthening Social Security.
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