During his one term in Congress, former Rep. Tom Garrett (R-Va.) proposed and sponsored several bills. However, one policy that caught my attention was his proposal to help alleviate student debt by allowing students to defer up to $550 in student loans in exchange for delaying the receipt of social security benefits by a month past an individual's usual retirement age, ultimately capping out at $40,150. Though this policy never became law following Garrett’s retirement to seek treatment for his alcoholism, it has been re-purposed recently by incumbent Republicans in order to fund a paid family leave policy. To be clear, both of these policies are outrageous in that they rob individuals of retirement security in order to fund essential parts of their lives which should ultimately be public services provided by the government.
It is important to discern exactly why Garrett’s bill was so flawed. Currently, the age when individuals are eligible to receive full social security benefits is 67-years-old, though they can receive partial benefits before then. Deferring benefits for the full term — six years — from the age individuals qualify for full benefits means that some retirees may not be able to receive social security until they are 73. To put that in context, the average lifespan of an American is around 78 years and has recently been declining. This means that Garrett’s policy severely limits the number of years that the average American can enjoy retirement in dignity with some basic financial security guaranteed. This proposal also ignored the reality that many elderly Americans may not be able to work into their 70s, and if they delay their benefits to pay off student debt, may find themselves without a safety net. This is especially important to note as social security acts as such a powerful anti-poverty policy, therefore delaying it would be immoral and counterproductive.
Moreover, Garrett’s original idea also ignores the reality that student loans are just one of the many reasons why Millenials find themselves in so much debt. Other reasons such as more expensive insurance, housing costs and childcare costs, are a huge burden on young adults, especially as they are making less than previous generations. This expensive cost of living is clearly affecting young people, with only 31 percent of millenials reportedly having saved for retirement. So even if student loans are deferred, the cost of living is so expensive that the amount of money Millennials could possibly save is still small, which could make the period where they have deferred benefits but have inadequate retirement savings more precarious still.
While the impact of this bill may be negative for young people, it did have one positive feature — over the course of the program the bill would save $700 billion for social security. So in that sense, the proposal would function as intended, which is more than can be said about the Republicans’ latest iteration of this idea.
Recently, Sen. Joni Ernst (R-Iowa) and Sen. Mike Lee (R-Utah) proposed the CRADLE Act, which allows for new parents to take up to 12 weeks of paid leave in exchange for giving up two months of social security payments per month they take. This proposal is obscene for several reasons besides the ones listed above. Aside from the fact that the United States is one of three countries on the planet that does not have paid family leave provided by the government, this seriously undermines retirement security for parents. By taking time off to care for their newborn children, parents are jeopardizing their future retirement, and the negative results of this policy will only intensify if they have more than one kid. Additionally, there is already a gender gap in retirement savings, so if a woman exchanges retirement benefits to care for her child she would be even more at a disadvantage than she would be without the program. However, most infuriating about this bill is the fact that experts believe it will have next to no impact on addressing the solvency issues of social security. So Senate Republicans essentially took a bad idea and made it much worse.
We need to be doing the opposite of what these bills are proposing. Instead of compelling young people to give up their retirement savings, we should be dramatically expanding government programs to ensure education, retirement and paid leave become public goods.
To address student debt, the government should not undergo a universal debt elimination program, as it would disproportionately help higher-income individuals. However, a universal debt relief program that would forgive the first $15,000 dollars of a student’s debt would be incredibly beneficial and lift the substantial burden that many borrowers face, including many who never completed college. Also, the government should expand and streamline programs that provide students who take on debt the opportunity to move and work in underserved areas in exchange for debt relief. In the future, the government should make higher education a public good by making public colleges tuition free — which would cost about as much as Congress’s latest military spending increase. Additionally, Pell Grants should be expanded to cover the costs of room and board for low-income students for whom these expenses present a substantial burden. And since not all students may choose to go to four-year colleges, trade and technical schools should also be rendered costless.
For paid family leave, Democrats have proposed the FAMILY Act. This bill would raise payroll taxes slightly in order to fund 12 weeks of paid leave for new mothers and fathers and gives the responsibility of administering this program to an Office of Paid Family and Medical Leave also created by the bill. This bill is a good start toward helping young adults have both a family and a stable career, while also keeping their social security benefits untouched.
In order to keep social security solvent without compelling individuals to defer benefits, Democrats should advocate to the eliminate the cap on taxable income for payroll taxes. This, according to some estimates, keeps the program viable until after 2050.
Social Security is a vital program, and while it is less generous than most developed countries old age programs, it does a considerable amount to lift the elderly out of poverty. We should not be robbing young people of the ability to retire with dignity in exchange for what should be public goods. Garrett’s bill was flawed from the start and the latest iteration by Senate Republicans needs to be defeated. In an increasingly unequal society, we should be seeking to find ways to make life more equitable for all — not tearing down one of the most vital social safety net programs that we have.
Jacob Asch is the Executive Editor for The Cavalier Daily. He can be reached at j.asch@cavalierdaily.com.
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