February 13, 2013
Honorable Mark Begich
United States Senate
Washington, DC 20510
Dear Senator Begich:
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I write to endorse your bill the “Protecting and Preserving Social Security Act.” The National Committee commends you for introducing this important legislation that extends the solvency of Social Security by slowly phasing out the payroll tax cap on wages and strengthens the annual cost of living adjustment (COLA) by adopting the Consumer Price Index for Elderly Consumers CPI-E.
The Protecting and Preserving Social Security Act addresses inadequacies in Social Security benefits and also solidifies the program’s financial future. First, it addresses the lack of adequate COLAs to Social Security by creating a CPI-E that more accurately reflects the expenses faced by today’s seniors. Currently, Social Security benefit payments are adjusted by the Consumer Price Index for workers (CPI-W); however, the CPI-W does not account for the higher rates of inflation experienced by seniors who must devote a larger share of their income to health care and energy costs, which have generally risen more rapidly in price than other items. By adopting the CPI-E as the measure for calculating the COLA, this bill assures that the purchasing power of the benefit is maintained as beneficiaries age.
Furthermore, this legislation addresses the program’s solvency by lifting the cap on Social Security payroll taxes. Currently, there is a cap of $113,700 on the amount of a worker’s wages that are subject to Social Security payroll taxes. This bill would lift the cap and modify the benefit formula when determining benefits for high-wage earners, which is crucial to maintaining Social Security’s “earned-right” tradition of increased benefits for increased contributions. As a result, this provision would significantly strengthen Social Security’s financial condition.
For these reasons, the National Committee proudly endorses the Protecting and Preserving Social Security Act. This bill represents a bold step on behalf of seniors and all Americans by strengthening and safeguarding Social Security for future generations without instituting benefit cuts on middle class Americans. We look forward to working with you to enact this important legislation.
President and CEO