Letter to Rep. Ryan: Raising Cap on Social Security Payroll Contributions Could Close Funding Gap
|Written by Dean Baker|
|Tuesday, 25 October 2011 13:30|
The Honorable Paul Ryan
Dear Rep. Ryan:
At a recent town hall in Racine, WI, a constituent asked you why people who earn millions of dollars pay the same in payroll taxes as the typical middle-class American. You replied that “… when you run the numbers … it gets you about six years of solvency in a 75-year problem, the problem is it doesn’t get you that much savings.”
In fact, raising the cap on Social Security payroll contributions just on those who make more than $250,000 would raise close to $7 trillion in revenue over the next 75 years, enough to close the Social Security funding gap while only raising taxes on 6 percent of working Americans. And even if Congress makes no changes at all to the program, the latest CBO projections show that Social Security will remain fully solvent through 2038 and would pay about 80 percent of full scheduled benefits from then on, indefinitely. It is quite difficult to make the case that a system that pays full benefits for the next 27 years is problematic or not working.As the Chairman of the House Committee on the Budget you will almost certainly be deeply involved in any prospective changes to Social Security. I hope that you will take the time to better familiarize yourself with the program’s finances. I would be happy to assist in any way I can.