Upping the Retirement Age

GOP Senators May Make 69 Retirement Age (AP)

WASHINGTON — Key Senate Republicans are considering gradually raising the Social Security retirement age as high as 69 over several years as they struggle to jump-start legislation that President Bush has placed atop his second-term agenda, officials said Tuesday. …

The possible increase to 69 over two decades or more was among the suggestions that Iowa Sen. Charles Grassley, chairman of the Senate Finance Committee, presented to fellow Republicans on the panel last week as part of an attempt to give the program greater financial solvency, the officials said.

I’m looking for a little help/perspective on this one: when I started working at age 16, I was told that the federal government was going to take a portion of my earnings for my own good, but that there was nothing to worry about because I’d get it back — plus interest — when I turned 65. Now they want to back out on what at the time seemed like a contractual agreement. If they extend the retirement age, aren’t they essentially reneging on a contract because they can’t stop spending money on superfluous things?

FILED UNDER: Politics 101, Social Security, US Politics
Leopold Stotch
About Leopold Stotch
“Dr. Leopold Stotch” was the pseudonym of political science professor then at a major research university inside the beltway. He has a PhD in International Relations. He contributed 165 pieces to OTB between November 2004 and February 2006.

Comments

  1. Just Me says:

    Pretty much.

    Also I am not a huge fan of raising the retirement age. Sure it helps keep social security sovent for a teeny bit longer, but there are some jobs that I don’t know that I want a 69 year old man/woman doing without any options to retire.

  2. KevinM says:

    If you are under 50, don’t count on seeing a penny of it unless you are destitute. Same with medicare. We’ve known this since the 80s when reagan took a stab at it, but all they did was kick the can down the road.

    What’s worse is those with defined-benefit pensions may think they are insulated from this, but the pensions are underfunded as well.

  3. Herb Ely says:

    Sixty five was chosen at the beginning of social security because the life expectency was – sixty five. Social security was called olda ange and survivor disability insurance (OASDI). As the life expetency increased, we gradually came to look at Old Age insurance as retirement insurance. Looking back, if we had indexed the age for eligibility for Social Security to life expectency, we would not now be funding years of retirement with and isurance program originally designed to protect against the disasters – old age and loss of the family breadwinner.

  4. Lurking Observer says:

    Just out of curiosity:

    If the government can raiase the retirement age, what is to keep it from cutting the level of benefits?

  5. McGehee says:

    The moral of the story is, you cannot be an equal party to a contract with an entity that is also the judge of that contract.

  6. Kent says:

    The moral of the story is, you cannot be an equal party to a contract with an entity that is also the judge of that contract.

    I was about to say, “Hear, hear,” but then it struck me: If this is true, then we are no longer a self-governing people.

  7. McGehee says:

    Supposedly, we the people are equally the judges of that contract we know as the Constitution.

    But I think that ship sailed back in 1803.

  8. GSR says:

    I’m so glad that my wife and I are saving on our own (401K and IRA’s)and will not “depend” on Uncle Sam at age 65 or 69. However, I expect that the “contract” I made with the govt when I stated working 28 years ago, will be honored when my time comes…again, I’m relieved that I won’t be dependent on it, though. Unfortunately, we are probably the minority – most hard working folks are dependent on SS for thier retirement and the feds should not be allowed to “move the target” on them.

  9. Radu says:

    Contract? Promise?
    What planet are you people living on?
    Corporations “walk out” on health benefits and pension “contracts” every day. Why would the Federal Government act any differently?

  10. Anderson says:

    The moral of the story is, you cannot be an equal party to a contract with an entity that is also the judge of that contract.

    Which makes me wonder whether anyone’s taken the feds to court over the Incredible Creeping Retirement Age? I’m sure the courts would find some reason why it’s not actually a “contract” at all, but it would be interesting to see the actual reasoning, in a cynical kind of way.

  11. Dave Schuler says:

    Good try, Leopold, but that’s been litigated already. You’re SOL.

  12. Clint Lovell says:

    The problem with Social Security is that it cannot be fixed using the present means and methods we use to fund government.

    The crux of the problem is the size of the looming program deficits. We’ve allowed them to get so large that is no longer possible for us to develop a realistic plan to pay them off and fund the rest of government services under the way we currently go about funding government. The size of the deficits are now larger than the entire annual federal budget. The federal government is already spending more money than it collects in revenues, so where would these funds come from?

    Can’t come from benefit cuts because the size of the benefit cuts needed to stabilize the finances of Social Security, ANY Congress that votes for these size cuts will be replaced by politicians who campaign on the promise of restoring the cuts. In a democracy, everyone acts in their own self-interests first. Benefit cuts are politically impossible.

    That means you have to try and get the money by increasing taxes. Whether you take them from us as individuals or you take them from businesses, it all comes out of the same pot – our economy. Historically, anytime taxation has exceeded 19% of GDP, the economy has tipped into a recession and stayed there until tax rates were lowered below the 19% of GDP threshold. Currently, income taxes are about 18.25% of GDP. Every one point increase in the tax rates only raises about $120 billion. To make the finances balance, we will have to be able to raise taxes to above 22% of GDP and sustain these rates for DECADES on end even though we have never been able to withstand tax rates above 19% for more than two years. It’s mathematically impossible for tax increases to work.

    What do we know, then?

    We know it’s politically impossible to make benefit cuts work.

    We know it’s mathematically impossible to make tax increases work.

    That means we have to face the fact the way we are doing things no longer works and we have to find a new way of doing things.

    There are only two (2) ways a government operated as a democracy overlaid on top of a free-market economy can “earn” revenue: taxation or investment-income.

    It’s time to face the reality that we have to create a new dynamic that allows government to fund ongoing operations and pay off the deficits based upon an investment-income model.

    Period, the end.

    It’s about the math, stupid.