WASHINGTON — Three senators, including Utah Republican Mike Lee, say they can fix Social Security without raising taxes — and keep the entitlement financially stable for future generations to come.
Lee unveiled the proposal Wednesday — the same day President Barack Obama revealed his deficit-reduction plan to Congress — along with Sens. Rand Paul, R-Ky., and Lindsey Graham, R-S.C.
"We decided that we wanted to make Social Security solvent in perpetuity, be able to demonstrate its solvency over a 75-year period," Lee said.
This is the first year in which Social Security is paying more in benefits than it is bringing in. The senators say if nothing is done now, by 2037 the government would have to raise FICA taxes by a third or cut benefits by 25 percent.
The plan would not affect benefits of those people already retired and those people over the age of 56.
Their proposal would gradually raise the retirement age from 67 to 70 by 2032.
"If you talk to young people in America — they've already accepted this," Paul said. "I tell people 'the knowledge has already been discounted. Young people know the age will have to go up gradually.' "
That means someone born in 1970 will have to wait until they are 70 to retire.
The plan also calls for a reduction of benefits for wealthier Americans. They are proposing a "means test" for Social Security benefits.
The plan would not affect those making $43,000 a year or less during their worklife. Graham said wealthy Americans would see their monthly benefits reduced by nearly $300 by 2030.13 comments on this story
"We are asking upper-income Americans to forgo future benefits," Graham said, "rather than raising their taxes."
They say Social Security is broken for two reasons: We are living longer, and we have a lot of people born after WWII.
If we don't act today, "It makes it much more difficult down the road to address the problem," Lee said.
Graham said if the government waits two years to fix Social Security, the retirement age will either have to be higher or the means test will have to go lower.