Social Security, the federal retirement system, is one of the most popular government programs in U.S. history. Unfortunately, it’s also in trouble and no consensus has emerged, either in Washington or among the public at large, on what approach the nation should take to fix it. Let's consider some options. (Find out more about our "Choicework" discussion guides, or download the PDF version of this choicework guide).


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Perspective 1

Maintain our Commitment to All Seniors, Even if it Means Raising Taxes and Cutting Other Programs
  • Create a national Social Security sales tax, reserving the proceeds from this tax for only one purpose—to keep the Social Security solvent.
  • Gradually raise the retirement age to 70 to control costs.

Arguments for:

  • Providing for individuals as they age is one of the fundamental responsibilities of government.
  • Everyone who has paid into Social Security, regardless of their income, deserves to get the benefits of the program and to have a secure retirement at public expense.
  • Social Security already keeps millions out of poverty and will be even more important in the future, since Americans don’t save enough and fewer companies offer pension plans.

Arguments against:

  • Unless we rethink how we handle Social Security, the costs will become unreasonably high in the years ahead, resulting in taxes that are too high, cuts in other important programs that are too severe, or a national debt that is much too large.
  • It doesn’t make sense for wealthy retirees get benefits at the nation’s expense—as they do under the current system—while so many Americans struggle to make ends meet.
  • Social Security is important, but not to the point where we sacrifice other important needs. Economic growth and vital services might get sacrificed if we have to raise taxes or cut spending elsewhere to maintain Social Security.


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Perspective 2

Make Social Security Affordable by Focusing on Those Who Need it the Most
  • Set a maximum income level for Social Security, so that upper-income retirees are no longer eligible for benefits.

Arguments for:

  • We can only make Social Security affordable by making some fundamental changes in how it operates. Incremental changes in things like the retirement age or the size of cost-of-living increases will not be enough.
  • While this approach is a dramatic change from the past, it does preserve Social Security’s essential mission of keeping American seniors out of poverty.
  • Well-to-do retirees don’t really need Social Security – this focuses the program on the people who need it most.

Arguments against:

  • Linking benefits to retirees' income will undermine support for Social Security, with many upper-income people likely to question why they’re paying taxes for a system that won’t pay them benefits. Furthermore, it punishes those who have worked hard and been financially prudent.
  • This solution avoids the fundamental question of why government is handling something that individuals should be doing for themselves. Whatever your income, it’s foolish to trust the government to manage your retirement; you’re better off handling it yourself.
  • People have made plans for retirement based on the system as it is today. We can’t just suddenly change the rules on people.


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Perspective 3

Make Economic Security in Retirement a Personal Responsibility Rather than a Social Program
  • Create mandatory savings accounts for every working American, similar to the 401(k) plans many employers offer now and funded with a portion of Social Security taxes
  • Allow individuals to decide how to invest their Social Security taxes, possibly through an approved list of mutual funds

Arguments for:

  • This approach emphasizes personal responsibility and limited government, basic values America has embraced throughout its history.
  • Many people feel better handling their own financial affairs rather than trusting that the government can be relied on to do it for them, and they should be allowed to do so.
  • Many people will be able to get a much better return on their money this way than in the current system.

Arguments against:

  • Under a self-financed retirement system lower-income retirees would suffer disproportionately, as would those who are simply bad planners or have bad luck. The result would be more personal tragedies and greater societal problems.
  • The costs for the transition from the current system to one based on personal savings accounts will cost billions of extra dollars (because we’ll still need to pay Social Security for current retirees while we transition to the new system). While this strategy might help bring down the national debt years from now, in the meantime it will drive it much higher.
  • Providing for the elderly should be a public responsibility. We’ve made promises that people are depending on for their retirement.


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