THE BUSH-SHAPED HOLE IN NATIONAL POLICY:

A new report from The Heritage Foundation shows how the next administration and the 117th Congress could modernize Social Security, increase benefits for lower-income workers, reduce Social Security taxes for everyone, and give individuals and families more control over their incomes and life circumstances. [...]

A logical first step is to increase Social Security's eligibility age and index it for life expectancy, since health improvements and less physically demanding jobs mean individuals can work longer than before.

The other commonsense reform, included in one of President Barack Obama's budget, is to apply a more accurate inflation index--the chained consumer price index--that doesn't inflate benefits over time.

Next are some modernizations to the spousal benefit (after all, Social Security began in an era when married women generally did not work outside the home), and eliminating features such as the retirement earnings test that suppresses work at older ages.

Finally, and most significantly, policymakers should return Social Security to its roots by gradually transitioning toward a flat, anti-poverty benefit structure. That would mean higher benefits for low-income workers, and lower benefits for middle- and upper-income earners.

According to The Heritage Foundation's Social Security model, the benefit of all those reforms would be a roughly 20% reduction in Social Security taxes, returning $1,600 per year to the median household, to save or spend based on their own unique needs.

Adding an option for workers to set aside a portion of their Social Security taxes in a personal savings account that they own, control, and could pass on to their heirs could further empower workers, and even reduce wealth inequality. 

Tweet   @brothersjudd