Large majorities endorsed reducing benefits for the top quarter of earners (79%), raising the full retirement age to 68 (78%), raising the cap on income subject to the payroll tax to $215,000 (83%), and raising the payroll tax rate by from 6.2 to 6.6 percent (75%). Three in four or more Republicans and Democrats endorsed all of these steps.
According to the Social Security trustees, these four steps would eliminate 71% of the Social Security shortfall that is projected to lead to substantial cuts in benefits in the year 2034.
In addition, a more modest majority of 52% endorsed a further step of making all income subject to the payroll tax (including 53% of Republicans, 58% of Democrats and 40% of independents). Together with the other steps, this would more than completely eliminate the Social Security shortfall.
The study was sponsored by a new organization, Voice Of the People (VOP), which seeks to give the public a stronger and more effective voice in public policy. It was conducted by the Program for Public Consultation, affiliated with the School of Public Policy at the University of Maryland. The representative sample of 738 Americans was provided by GfK’s Knowledge Panel, a probability-based online panel. The full report is available at: www.public-consultation.org.
Steven Kull, who directed the study, noted, “While it is often said that Social Security is a ‘third rail’ for Congress, it appears that, when they’re given the right tools, a majority of Americans can solve the Social Security solvency crisis. “
“The key is to use the right tools, so people can really deliberate on the issue, weigh the competing options, and make informed choices,” Kull continued.
The complete survey instrument is now posted online–at www.VOP.org–so anyone can go through the same process the representative sample went through, see how they would solve the Social Security shortfall, and share what they learn with their Members of Congress. VOP is inviting all Americans to go online and try it themselves.
This study was a model of the “Citizen Cabinet” that VOP has proposed—a large standing panel consisting of a representative sample of Americans who will go through a process that simulates what a policymaker goes through, known as a ‘policymaking simulation.’
Consistent with the Citizen Cabinet design, respondents were given a briefing on Social Security and the projected insolvency. They were then presented a series of possible options for dealing with the shortfall that have been proposed in Congress and scored by the Social Security actuaries, and asked to evaluate strongly stated arguments for and against each option.
Finally, respondents were presented a list of options, each one scored according to how it would affect the Social Security shortfall, and asked to propose their own package of Social Security reforms, getting constant feedback about the impact of their choices on the Social Security shortfall.
The materials were developed in close consultation with Republican and Democratic Congressional staffers who specialize in Social Security, as well as various think tanks and advocacy groups across the spectrum of views on the issues, to ensure that the briefing materials were accurate and that the strongest arguments for and against each option were presented.
Interestingly, when respondents made their proposed package of Social Security reforms, most were not simply looking out for their own interests. Very large majorities of those with higher incomes favored raising the cap on taxable income, even though it would increase their taxes. They were no less supportive of reducing benefits for people in the upper income brackets than people in lower income brackets who would not be affected. People under the age of 48 overwhelmingly favored raising the retirement age, even though it would affect them, and were not significantly less supportive than old people who would not be affected.
Steven Kull noted, “It appears that when Americans think about what needs to be done for problems like the Social Security shortfall, they don’t just think about what’s in their interest, but what’s best for the common good.”
In the policymaking simulation, respondents were also presented options, currently being discussed, for recalculating the annual Cost of Living Adjustments (COLAs) for Social Security benefits. None of these ideas were chosen by a majority. One option, known as chained CPI, would reduce the rate of increases by basing them on what people actually buy rather than on a fixed set of goods and was chosen by 32%. Another option would be based on what the elderly actually spend money on, which would increase the rate of COLAs, as they spend more on health care—which has gone up faster than general inflation. Neither idea was widely chosen—chained CPI was chosen by 32% and basing COLAs on what the elderly tend to buy was endorsed by 20%.
Options for increasing benefits that have been proposed in Congressional legislation were also presented and evaluated. Each of these would increase the shortfall. Just less than half (47%) chose the option of increasing minimum monthly benefits from $760 to $1,138 a month. One in three (32%) chose to increase benefits for those over 85.
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