Social Security needs an overhaul now if it's going to survive an influx of retiring baby boomers early next century, an advocacy group says.
Citizens Against Government Waste called Wednesday for reduced benefits for average and high-wage earners, an increase to 70 in the age of eligibility and payroll tax cuts to stimulate growth, among other steps."Failure to reform the system now, while we still can, will mean devastating benefit reductions for retiring boomers or outrageous payroll tax hikes for their children and grandchildren," said Thomas A. Schatz, president of the group.
The conservative organization, founded by industrialist J. Peter Grace and columnist Jack Anderson, seeks to educate the public about the budget and advocates lower federal spending and taxation.
The group, in an 84-page study of the Social Security system, went on to say taxation of Social Security benefits and the earnings test that discourages older Americans from working should both be eliminated.
Some of the proposals, mentioned before by some conservatives in Congress, would amount to radical surgery on a system that Social Security Administrator Shirley Chater said is not in a crisis.
"It is not in need of the radical changes some would suggest," she said. "We are, however, in a position to make certain that Social Security will be there for all of us when we need it, for generations to come."
Tom Miller of the Competitive Enterprise Institute, an editor of the report, asserted that "the later the necessary adjustments come, the more drastic and extreme they will be."
That could mean punitive tax increases, sharp reductions in retirement benefits and cuts in other government programs, he said.
The report looked primarily at two programs that make up the bulk of Social Security and concluded that without reform, their annual outlays will begin to exceed tax revenues by 2013, just as boomers are beginning to retire.
The programs would then have to draw on interest earnings of the trust fund. The fund itself would be exhausted by 2029, the group said.