Nowadays, whenever Social Security comes up in policy debates around Washington, the discussion often focuses on how best to cut benefits in order to shore up the program’s finances.
But a big new report (pdf) from the New America Foundation suggests that the conventional wisdom is exactly backward. Congress should be looking at ways to expand Social Security, not shrink it — particularly at a time when traditional corporate pensions are disappearing, and 401(k)s have proved fairly risky.
The major proposal in the report is to add a brand new benefit to Social Security, called Part B, which would provide a flat $11,699 per year to all retired workers. This would come on top of regular Social Security, which would also be protected from any further cuts.
That’s a large hike. But the New America report, written by Michael Lind, Steven Hill, Robert Hiltonsmith and Joshua Freedman, makes a case that alternative retirement options for Americans aren’t working. Defined-benefit employer plans are vanishing. Workers aren’t saving enough or dipping into their retirement funds too often. And private-savings plans like 401(k)s or IRAs are proving quite volatile — the financial crisis wiped out an estimated $2.8 trillion from retirement plans.
