Conference calls for expanding Social Security benefits
Oct 30, 2013, 11:36 AM | Updated: 1:37 pm
As Americans struggle to save for retirement, there’s a call to expand Social Security at a conference underway in Washington, D.C.
The government, on Wednesday, announced a 1.5 percent increase in payments in 2014 for 57 million Social Security recipients.
Too little, says John Burbank, executive director of Seattle’s Economic Opportunity Institute. The increase is among the smallest since automatic adjustments were adopted in 1975. Burbank thinks the increase should be based on an assessment of the real cost of living for seniors, which he claims is higher than the standard Consumer Price Index. The index is tied to the urban cost of living.
The private retirement savings system, says Burbank, is falling apart with the median value of a 401k plan at about $40,000, which translates to about $250 a month. It’s estimated that half of American workers have no private savings plan at work.
Burbank supports efforts at the state level to expand private savings programs. But he thinks an expansion of Social Security will enable seniors to avoid living in poverty during retirement. He said Social Security provides two-thirds of income support for two-thirds of American seniors. Moving away from Social Security, he said, would be disastrous since it provides buying power for seniors and would impact the mainstream economy.
Burbank argues for more revenue for the program, suggesting that the wealthy should pay the same percentage of their income to Social Security as lower-wage earners. Right now, contributions are capped at $113,000 of salary.
“If we were to scrap that cap, just as we’ve done with Medicare, then there would be a lot more money that would come into the system, enabling us to actually expand benefits,” said Burbank.
Burbank calls Social Security the most dependable, well-funded government program, with a $3 trillion surplus.
