Jeb Bush on Sunday said he’s in favor of raising the retirement age for Social Security as a way to ensure the program’s fiscal health.
Appearing on CBS’s “Face the Nation,” former Florida Governor Bush told newsman Bob Schieffer that the current basic retirement age of 65 needs to go to 68 or 70 as a way to sustain Social Security for those now under 40.
“I think it needs to be phased in over an extended period of time,” Bush told Mr. Schieffer, who retired himself following the broadcast.
By coming out for a retirement-age hike, Bush joins fellow GOP presidential hopefuls New Jersey Gov. Chris Christie and Sen. Marco Rubio of Florida, who have proposed similar increases as part of larger Social Security reform plans. Wisconsin Gov. Scott Walker has said he’ll have something to say about this issue if he formally enters the race, as he’s almost certain to do later this year.
Thus there’s a substantive divide opening here with likely Democratic nominee Hillary Clinton. She’s positioned herself on the other side of the issue, insisting these Republicans are “just wrong” for wanting to make major changes in something most Americans depend on for retirement security.
Clinton hasn’t been specific about what she might do to bolster the system’s finances, if elected. But her rhetoric implies that she’s look askance at upping the retirement age.
“It is not a luxury. It is a necessity for the majority of people who draw from Social Security,” Clinton said last month during a round table discussion in New Hampshire.
The Social Security retirement age isn’t a single number. It’s a sliding scale, based on when the recipient was born and whether they want to retire early in return for a reduction in monthly benefits.
Right now, it’s 65 for those born prior to 1938. Under current law, it rises gradually to age 67 for those born in 1960 or later. Early retirement at 62 is still an option for all, as things now stand. But the percentage of full benefits for recipients is gradually being reduced.
If your full retirement age is 67, for instance, early retirement would net you a check equal to 70 percent of your full benefits.
Why raise this further? Because it’s a powerful way to save a lot of money. And that’s going to be necessary at some point, as the Social Security trust fund will pay out much more in benefits to retiring baby boomers in coming decades than it will take in taxes. If you lengthen the time horizon, the number gets pretty large: Social Security will run $7.7 trillion in the red during the next 75 years, according to figures from the right-leaning Heritage Foundation.
Americans are living longer, healthier lives than they did when Social Security was founded, say conservatives. In that context it makes sense as a money saving move, they say.
“It is common sense, and it is fair,” wrote Heritage expert David C. John in a lengthy 2010 analysis of the subject.
Democrats say that way of discussing the problem is misleading. It is mostly those at the higher end of the income scale that have greater life expectancy, they say.
And many Americans depend on Social Security. For more than two-thirds of retirees, Social Security provides at least half of total retirement income, according to the left-leaning Center on Budget and Policy Priorities.
Many lower-income workers simply tire out and are unable to continue working. For them, raising the retirement age won’t change when they retire. They’ll simply retire early, in essence taking a forced cut in benefits, in the liberals’ view.
Raising the Social Security retirement age not a popular means of reducing the federal deficit. Fifty-six percent of respondents to a 2012 Pew poll opposed a gradual increase as a means of cutting government spending. Forty-two percent approved.
That Pew survey found that reducing Social Security benefits for higher-income retirees was a more popular move. Fifty-one percent approved of this, which is often called “means-testing.” Forty-six percent disapproved.
As a practical matter, any move to raise the retirement age would be part of a more comprehensive reform, with a nip here and a tuck there, aimed at putting Social Security back in the black, long term. Governor Christie’s proposal also includes means-testing, for example. Senator Rubio’s does, as well.
The last time Social Security was financially restructured was in 1983, when a bipartisan group of lawmakers cobbled together increased taxes, reduced benefits, and a slightly higher retirement age in a classic package of compromise. When Rep. Barber Conable (R) of New York stood in the House to defend it, he used words that might describe any such large legislative compromise.
“This is not a work of art,” Representative Conable said. “But it is artful work.”