Rep. Steny Hoyer, D- Md., seeking to become the Majority Leader in the new Congress, reiterated Tuesday what he has said before about Social Security: Democrats absolutely rule out any consideration of President Bush’s proposal for voluntary private accounts for younger workers. But raising taxes and increasing the eligibility age for receiving retirement benefits are “on the table,” Hoyer said.
The Maryland Democrat, currently House Minority Whip, has suggested eligibility and increases are on the table before, but now that he appears to be on the brink of becoming House Majority Leader, his words take on much greater weight.
Hoyer is battling Rep. John Murtha, D- Pa., to become the new Majority Leader. Democrats cast their ballots Thursday in the Hoyer-Murtha race. House Speaker to-be Nancy Pelosi has endorsed Murtha.
Hoyer cited the 1983 accord between President Reagan and House Speaker Thomas “Tip” O’Neill as a model of what bipartisan cooperation can do to keep Social Security solvent.
Do as O'Neill and Reagan did
“We know we need to stabilize the funding of Social Security, but we’re going to do so in a way the guarantees the availability of Social Security for our seniors,” he told reporters, adding that he and Pelosi want to work with Bush in the very same way Reagan and O’Neill worked out a deal to keep Social Security afloat in 1983.
“In 1983, everybody understood there was a crisis of funding, a cash-flow problem. Ronald Reagan and Tip O’Neill sat down together… in the final analysis gave their support to the solution,” Hoyer said. “Because Reagan and O’Neill did it together in a bipartisan way, they were able to politically do a tough thing. What was the tough thing? Raise the age from 65 to 67.”
He said the increase in the age at which retirees could begin collecting full benefits was enacted with sufficient lead time so that middle-aged workers in 1983 could plan for what was essentially a cut in their benefits: forcing them to wait longer before collecting full benefits.
Asked whether he would support another increase in the eligibility age or a tax increase in order to make Social Security financially viable, Hoyer responded, “I don’t want to anticipate what the solutions are before we have the discussions, but yes, that is on the table.”
As it happens, Hoyer voted against the 1983 Social Security legislation supported by Reagan and O'Neill. The reason, according to his spokeswoman Stacey Farnen Bernards, is that the measure adversely affected federal employees, of whom there are tens of thousands in Hoyer's Maryland district.
According to this year’s report by the trustees of the Social Security system, present tax rates would be sufficient to pay only 74 percent of promised benefits in 2040. So, in effect, retirees in 2040 will get a 26 percent cut in benefits, unless Congress makes changes to the program.
Hoyer said in 2005 that Bush and Congress should consider raising the age at which retirees can collect benefits. He also said in 2005 that Congress and Bush should consider raising taxes on higher-income workers.
The amount of earned income subject to Social Security taxes is currently capped at $94,200. That cap increases every year.
“Retirement benefits are part. Age is a part. The cap is a part. Revenues are a part. We have to discuss all those," Hoyer said in 2005.