Reed on Social Security

Social Security has been on Congressman Tom Reed's (R-NY 23rd District, which includes Tompkins County) radar for many years.  In 2015 he co-sponsored an amendment would protect the Social Security Trust Fund from being raided in order to bail out the Social Security Disability Insurance Trust Fund.  A year ago he addressed a report warning that Medicare and Social Security was expected to run out of money by 2026 and 2034.  This January Reed became the Republican Leader (Ranking Member) of the Social Security Subcommittee on the House Ways and Means Committee, working with Subcommittee Chairman Congressman John Larson (D-CT), and nine other congress members (six Democrats and three Republicans).  While Reed was in Ithaca Wednesday to highlight local business he took a few moments to talk to the Lansing Star about the current state of and future of Social Security.

"The commitment of Social Security is something I believe in," Reed said. "It's such a great program.  Being raised by a single mom when my father passed away, it was the Social Security check and the death benefit check that got us through.  So we've been there.  Social Security is something that needs to stay with us as a nation.  I'm glad to have a partner in John Larson on the Democratic side, who is sincere about saving Social Security and finding common ground to get this done so that we can look back and say this was the right thing and we did it at the right time."

Reed says the key to his approach is to grow the economy, reduce the national debt, and encourage more jobs.

"Going forward this is about stabilizing the fund in a way that recognizes workers of today will take care of that generation before it," Reed said. "The way you can solve a lot of this is getting people to work, grow the economy.  Immigration reform is part of this conversation.  People don't think about that, but the more people we can bring in to the workforce, the more people we can grow the economy with, the more people are contributing to Social Security, and that stabilizes it long term."

Reed said that is part of an overall strategy that will make Social Security sustainable.  He said that another important piece is generating new revenues.  Where those revenues come from is a point on which Republicans and Democrats differ.

"Tax increases is something I will fight.  John (Larson)'s original proposal was a 1.3 trillion dollar tax increase," Reed said. "That's a significant tax increase, especially when you're using the payroll tax.  That's a very regressive tax.  I think there's a way you can limit the tax increases.  I think there is also a way you can get to the revenue side of it by that growth of the economy and more workers in the system."

Reed explained that it is a popular misconception that Social Security is going bankrupt because the government borrowed from Social Security without paying the money back, in essence, robbing retirement money that workers paid into the system throughout their working lives.

"You hear that quite often", he said. "That's not 100% accurate, because when you have so many people coming through the baby boomer generation... remember how Social Security works.  Your money goes in today and goes immediately out to take care of those retirees that are drawing on Social Security.  There were tremendous amounts of surplus.

"Now, there were some bad actors that borrowed from Social Security and didn't obligate payment back.  But that was years ago.  All of those funds are invested in what is the safest investment.  That's the US Treasury.  That obligation needs to be met.  That's why the national debt is something that we have to take into consideration when we talk about Social Security, because it's part of that 23 trillion dollars worth of national debt that's on the books."

Reed says bringing down the national dept is essential in a strategy to protect Social Security.

"I know we all agree Social Security liabilities will be the first thing paid back.  It's essentially given the preference that it needs to be given to make sure it's secure.  But it is at risk because that money is owed to the Social Security fund," he said.

Reed says that because people are living longer they are also working longer, and Social Security needs to be adjusted to account for that.  He says when Social Security was first designed the age at which people began drawing on it made sense.  He acknowledges it is a hard conversation to have but says the nation needs to have it as part of an overall strategy to keep Social Security viable.  There are two parts of that conversation.  Reed says as currently written, Social Security penalizes people who want to remain in the workplace longer while also drawing Social Security.  He says people should be incentivized and encouraged to continue working.  He also says there has to be an honest conversation about potentially raising the age at which people start drawing from the system.

"For folks like myself and people that are younger than me - I'm 47 - we have a littler bit more time to adjust our retirement plans," he said. "That's why when we go into this we've got to make a fundamental commitment: don't touch present retirees.  Promise made, promise kept.  Those that are close to retirement don't have time to adjust their retirement plans, so leave them off the table.  Then let's have an honest conversation about benefits in regards to qualification for folks like myself and others."

Reed will be back in Ithaca next Wednesday (September 3 at 10am at the Tompkins County Public Library) to talk about Social Security in a 'town hall' setting.