- Reduce benefits for wealthy retirees, who don't really need them. Obviously a political non-starter under our current leadership.
- Index future benefits to the Consumer Price Index Rather than beneficiaries' pre-retirement earnings. (See note below.)
- Raise the retirement age to 74. Okay for college professors maybe, not so great for bricklayers.
- Discourage people from taking early retirement. Ditto. A study has estimated that 25% of early retirees are too frail to continue their normal work -- and that's without the already scheduled increase in the retirement age to 67.
Andrews has a 24 column inch discussion of these possibilities and why none of them is satisfactory. Then, in inch 25, we get this:
Some Republicans have even gone so far as to suggest the one approach Mr. Bush did not mention in his speech, raising the ceiling on income subject to payroll taxes, which is now about $90,000 a year. The idea appeals to some politicians because only about 6 percent of Americans earn more than $90,000 a year. Imposing Social Security taxes on incomes of up to $200,000 would come close to eliminating the entire deficit.
Mr. Bush has adamantly opposed any increase in payroll taxes. At least for the moment, that idea is off the table.
So that's it. This entire problem could be solved simply by eliminating the cap on payroll taxes. The entire "crisis," the endless obfuscating yammering of elocutionists on TV wearing hairpieces molded from a single piece of plastic, the terabytes of outrage and wonkery sloshing through the blogosphere, the forests laid waste to make the newsprint to fail to explain to the people exactly what the Resident is talking about doing to them -- all of it could be aborted tomorrow just by making corporate lawyers, executives, and stock traders pay the the same percentage of their salary in Social Security taxes as a Burger King counterperson. But the only place this idea is even mentioned in public is in the last paragraph of a story on page 15 of the New York Times.
Note: This indexing thing is confusing to a lot of people. Over the years, wages have tended to rise faster than inflation. This is usually interpreted to mean that the U.S. standard of living is increasing, which is actually debatable, and anyway, it hasn't been happening for the past few years. But over the long run, the initial level of SS benefits people get when they retire depends on their lifetime earnings, so it has tended to rise. Once you retire, your benefits are indexed to a measure of inflation, the CPI. The problem with indexing initial benefits to the CPI as well is that, if wages continue to increase over the decades, upon retirement, people's incomes will plunge precipitously. The conventional argument is that they'd still be as well off as retired people are today, even if they're poor compared to their unretired neighbors, but that incorporates some unexamined assumptions about the nature of monetary value. This is deep stuff that we may want to get into later.