Reduced Social Security benefits begrudgingly accepted by AARP
The AARP has begrudgingly given its blessing to reducing Social Security benefits should Congress move to reduce payments to retirees. The AARP, or the American Association of Retired Persons, normally advocates against reducing benefits but is conceding that Social Security is in need of reforms to remain solvent.
Entitlement programs in Congressional crosshairs
There has been a flurry of Congressional activity in the past few years concerning financial reform, especially concerning government spending. Since entitlement spending, such as programs like Social Security, Medicare and Medicaid, make up almost half the federal budget, there are a lot of elected officials who say they have to be cut. However, some groups such as the AARP oppose any cuts to Social Security and to Medicare, as these programs make up the “safety net” that provides income to retirees. In fact, according to the Social Security Administration, 90 percent of elderly people in the United States receive Social Security income, and Social Security payments make up 41 percent of income for elderly people. However, the AARP recently conceded that they would be open to “some” cuts to benefits, according to the New York Times.
Powerful lobby group concedes to certain cuts
The AARP, formerly called the American Association of Retired Persons, recently said that it would accept some cuts to Social Security payments. The group has maintained that it doesn’t want benefits to be drastically cut, but would not be opposed to minor reductions that would help keep the system solvent. The board of Social Security Trustees, according to Bloomberg, recently announced that the Social Security Trust Fund, where all money the Social Security Administration doesn’t pay out is placed, will be depleted by the year 2036 based on current projections. The AARP also maintains that payroll taxes should be raised to cover any gaps. Legislators are already putting forward proposals such as decreasing benefits or raising the retirement age.
Safety net in danger
Social Security is already slated to spend almost $190 billion more than it takes in this year alone, according to USA Today, and is projected to do so next year. It was also revealed recently that the Social Security administration is estimated to have overpaid by more than $6 billion in 2009, according to Time magazine, by making payments to people who shouldn’t have received them or by paying too much. The federal government is estimated to have distributed $125 billion more than it should have that year. The system, as it stands, appears to be unsustainable. In order for Social Security to continue as the social safety net for the nation, payroll taxes may have to go up and many Americans could realistically expect to retire later, and possibly on less than they would like.
New York Times: http://www.nytimes.com/2011/06/18/us/18aarp.html
USA Today: http://www.usatoday.com/news/opinion/editorials/2011-06-16-Payroll-taxes-raid-Social-Security_n.htm
Social Security Administration: http://www.ssa.gov/pressoffice/basicfact.htm