WASHINGTON – Following the failure of the National Commission on Fiscal Responsibility and Reform to get the votes necessary for its recommendations to be voted on by Congress, Karen Friedman, executive vice president of the Pension Rights Center, issued this statement:
“Social Security has been saved from the unnecessary cuts that the deficit commission had recommended in its final report. While the report included small increases in Social Security benefits for the most vulnerable retirees, the recommendations overall would have jeopardized the retirement future of most American retirees and workers.
“The fact is, Social Security should never have been on the table in the first place. The program is on sound financial footing for three decades, and its long-term financial health can be addressed by taking other steps, such as raising the ceiling on the payroll tax for higher earners, instead of cutting benefits. Furthermore, polls indicate overwhelming support for strengthening Social Security, not cutting it, and any moves to address its long-term solvency should be done in an open environment with public input, not behind closed doors, as the deficit commission tried to do.
“Social Security is our greatest poverty prevention program – one that almost every family relies on in retirement. If policymakers are truly serious about protecting the financial well-being of future generations of retirees, they should look at reforming our broken private retirement system. Thanks to a decline in traditional pensions and an increasing shift to do-it-yourself 401(k) plans, our nation is suffering from a growing Retirement Income Deficit. The Retirement Income Deficit, which is the difference between what American households have today for retirement and what they should have today to maintain their standard of living in retirement, currently stands at a staggering $6.6 trillion.
“There is no question that the long-term fiscal condition of the country should be addressed, and a few of the commission’s retirement-related recommendations merit consideration by Congress. For example, a reduction in certain tax expenditures for retirement plans that are paid for by all taxpayers but that disproportionately benefit higher-paid employees is an issue that is worth examining. However, as lawmakers take up budget deficit reduction measures in the future, they should keep another deficit – the Retirement Income Deficit – in mind.”