The Senate Finance Subcommittee on Social Security, Pensions, and Family Policy, chaired by Sen. Sherrod Brown (D-OH) and Pat Toomey (R-PA), held a wide-ranging hearing Dec. 18 that examined the various sources of income for retirees and whether reforms are needed to the financing and benefit structure of the U.S. retirement system.
The hearing, entitled “The Role of Social Security, Defined Benefits, and Private Retirement Accounts in the face of the Retirement Crisis,” featured four witnesses: Rob Romasco, president of AARP; Andrew Biggs, resident scholar at the American Enterprise Institute; Dean Baker, co-director of the Center for Economic and Policy Research; and John Sweeney, an EVP at Fidelity Investments.
The discussion of Social Security broke down largely along partisan lines. Some witnesses and Republican senators argued for reforms that would raise the benefit eligibility age or cut payments to future beneficiaries, which they said would ensure the program’s solvency. Other witnesses and Democrat senators argued instead for benefit increases targeted to lower-income individuals or for changing the consumer price index which is used to calculate annual cost-of-living increases for current beneficiaries so that it more accurately measures the goods and services that the elderly use.
There was some bipartisan agreement, however, on the need to “do no harm” to the current incentives for individuals to save through private retirement savings vehicles. Sen. Johnny Isakson (R-GA), a member of the Finance Committee, cited the bipartisan support for his resolution (S. Con. Res. 12) expressing the sense of Congress that the current tax incentives for retirement savings provide important benefits to Americans to help plan for a financially secure retirement. In addition, there was widespread support among senators and the witnesses that the relatively new employer-sponsored retirement plan design features enabled by the Pension Protection Act, like auto-enrollment and auto-escalation, were essential in helping Americans achieve a secure retirement.
Andrew Remo is ASPPA’s Congressional Affairs Manager.
