Jeb Bush has joined Republican calls to increase Social Security and Medicare retirement ages as a means to “save” both programs.
“We need to look over the horizon and begin to phase in, over an extended period of time, going from 65 to 68 or 70,” Bush said Sunday.
I’m not sure if Bush is aware of the fact — his comments suggest that he is not — but full retirement has already been extended beyond age 65. The full retirement age is now 66, and for those born after 1959, it is 67. (Early retirement is still at 62, but the financial penalty for taking that option has increased significantly).
Bush made his comments in an interview with Bob Schieffer, the 78-year-old CBS newsman who was taping his last episode of “Face the Nation” before retirement. Schieffer’s longevity would seem to make him a good example of extended, healthier lifespans, a trend cited often by those who support pushing back the retirement age. But such an example is deeply misleading.
With all due respect to Schieffer, sitting in an air-conditioned office staring into a TV camera at age 68 or even 78 is significantly easier on the body than working as a carpenter, retail clerk, truck driver or other blue-collar profession at an advanced age. For a lot of Americans, working past age 67 would be a considerable physical and emotional hardship, and that’s assuming they could find a job in the first place.
In addition, most of the gains in lifespan that are used to justify a later retirement age are concentrated among white-collar, affluent workers.
At age 55, the average male in the top 10 percent of the income scale will live almost 11 years longer than a man at the bottom 10 percent of the income scale. The differential is smaller among women, but the trends are worse. Among women in the bottom 40 percent of the income scale, lifespans are actually falling. A woman at the bottom end of the income scale who turned 55 in 1995 can expect to live two years less than her mother did at the same age.
Asking such folk to “save” Social Security by working another two or three years, to age 70, would be a tax on life itself, so to speak. But to Bush and his colleagues, that’s preferable to the alternatives, most of which involve slight tax increases on income.
You could, for example, increase or even eliminate the cap on income that is subject to Social Security payroll taxes, which now disappear after the first $118,000 in earned income. Earlier this year, Sen. Bernie Sanders proposed a variation on that idea by keeping that cap, but reinstating the payroll tax on income above $250,000. Other proposals include gradually raising the 6.2 percent payroll tax to 7.2 percent or slightly adjusting the cost-of-living formula.
Bush and Christie have also suggested means-testing Social Security, thus reducing benefits for wealthier Americans and saving a lot of money. Personally, I don’t have a problem with that idea, depending on its details, but defenders of Social Security worry that means-testing would make the program look more like welfare and thus undercut its long-term political support.
I wish I could say with certainty that such a change wouldn’t matter, but given the state of modern politics, I do see their point.
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