Imagine if tomorrow morning’s headline was this: “Four hundred thousand to get one half billion dollar boost in income.” The underlying news story announces that hundreds of thousands of people here in three states of the Northern Rockies whose good earning jobs are behind them will share $500 million each year for the rest of their lives.
One half billion dollars distributed among people in Montana, Wyoming, and Idaho, particularly the 15% who no longer bring home good salaries, would be one of the greatest bursts of targeted payroll in our history, a boon for spending in our small businesses and a continuing economic shot in the arm for our region.
Of course, this vital economic engine already exists – Social Security.
The first monthly Social Security check was cut for $22.54 and delivered to Ida May Fuller in Brattleboro, Vermont, 73 years ago. Today’s Americans receive Social Security checks averaging $1,180 per month.
Both critics and supporters of Social Security are justifiably concerned about the financial solvency of the system. Although the retirement fund enjoys by far the largest surplus, $2.7 trillion, of any government trust fund, that money is expected to start being reduced in 2021.
Low employment, the Great Recession which began under President George W. Bush, and increasing life spans have all presented unanticipated difficulties for the fund. However, the worry about future fund shortages has happened several times during the past half century and each time was easily repaired by adjusting benefits for future retirees or increasing the payroll tax known as FICA.
There is a proposal by the President and many members of Congress to make small reductions in benefits to those retiring in the future. One of the more interesting legislative proposals on the tax side is this: People earning up to $110,000 each year now pay a Social Security (FICA) tax, but those earning above that amount pay no additional FICA. If that tax was applied to all earnings up to $250,000, Social Security would not only be financially sound for the rest of this century, but monthly benefit payments could be increased.
Whatever the solution, our moribund, reluctant Congressmen and women ought to get a move on and read just our essential Social Security system, which provides our states with an enormous economic boost.
Pat Williams served nine terms as a U.S. Representative from Montana. After his retirement, he returned to Montana and taught at The University of Montana.