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And the proposals keep on coming. Issue by issue — from income support to innovation — US Senator Marco Rubio is trying to modernize the creaky Republican policy agenda. Now at the front of his queue, retirement security.
OK, here’s what you want reasonable Social Security reform to achieve: more help for lower-income Americans, less help for the rich, better economic incentives for older workers, additional choice for the middle-class. Oh, and long-term solvency. Put it all together and get vastly improved and sustainable retirement security for Americans in an economy buffeted by automation and globalization.
Directionally and substantively, Rubio’s new retirement proposal, which he outlined Tuesday at the National Press Club, seems a solid step forward (at least based on what’s in the fact sheet issued by his office). Under the Rubio plan, (a) low-incomes retirees would get higher benefits, while high-income retirees would see their benefits grow more slowly; (b) both the 12.4% Social Security payroll tax for all individuals who have reached retirement age and the Retirement Earnings Test for early retirees would be eliminated; (c) the retirement age for workers under 55 would be gradually raised; (d) Americans without an employer-sponsored plan would gain access to the 401k-like Thrift Savings Plan currently just for Congress and federal workers; (e) Medicare would transition to a premium support system.
Rubio’s fresh ideas would strengthen the safety net for lower-income folks and the self-employed, while also promoting economic growth by increasing savings and labor force participation. Not a bad two-fer. The Rubio plan also finally moves the center-right policy debate beyond the idea of personal savings accounts carved out from the existing Social Security system. Indeed, he deserves credit for even tackling meaningful Social Security reform given its “third rail” status.
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