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Thomas Weighs In

There's lots of interesting stuff in The Washington Post's writeup of Republican Rep. Bill Thomas' skepticism about the wisdom of privatizing Social Security, including some things I'll get into on Tapped tomorrow. There's also some things that count as the sort of modest changes some of us liberals have been saying should be considered:

Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
The gender-adjustment strikes me as probably a political non-starter, but a pretty reasonable idea. The idea of somewhat raising the retirement age for office workers while letting blue collar workers off the hook makes a great deal of intuitive sense but it's hard to operationalize. An idea I've mentioned before that might accomplish some of the same things would be moving to a variable retirement age on a voluntary basis. Depending on whether you retired before or after age 65 (with a minimum age of 62) your annual benefits would either be slightly higher or slightly lower than the base benefit level in an actuarially fair manner. The idea would be that your total lifetime expected benefits would be the same no matter what age you retired out, but the annual benefit levels might be higher or lower depending on how early you retire (i.e., how many years the benefits are spread out over).

This wouldn't cut expenditures in any major way, but it would increase tax revenue by improving the worker-to-retiree ratio. It would also introduce an additional degree of choice into the system in a modest way. As far as possible, it seems to me that our policy goal should be to enable older people to stop working and still live in dignity without encouraging them to do so at an age when they may still be perfectly willing and capable to work.

January 19, 2005 | Permalink

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Comments

"The gender-adjustment strikes me as probably a political non-starter, but a pretty reasonable idea."

I think you need to think about it more. Raising the retirement age just for women? What was that about sexism again?

Next, we'll be lowering it for minorites with short life expectancy which doesn't sound bad, but hey, next we're lowering it for smokers and extreme sport afficianados.

You would argue for gender-adjustment based on what? Fairness? Please, women already get the short end of the stick on the pay scale.

Matt, please, think again.

Posted by: manyoso | Jan 19, 2005 1:16:28 AM

Matt, this SS argument is about philosophy. The right wants private accounts to get people personally involved in SS as an investment. The left wants to keep it as a dole. Everything else is "hoo-haw."

Posted by: William R. Millan, Sr | Jan 19, 2005 4:26:07 AM

Oh, women work in offices and men don't?

Posted by: Jim E. | Jan 19, 2005 9:00:40 AM

Nevermind -- I think I misread your point.

Posted by: Jim E. | Jan 19, 2005 9:02:05 AM

But I hardly think it's "reasonable" to change the retirement age based on gender.

Posted by: Jim E. | Jan 19, 2005 9:03:08 AM

Actually, I read just yesterday about a case (Heckler v. Mathews, 465 U.S. 728 (1984)) wherein a man sued because of higher benefits paid out to certain women than to similarly-situated men.

Posted by: bobo brooks | Jan 19, 2005 10:05:02 AM

It's insurance. You're betting you're going to live into retirement and need money to live. You want a decent retirement. You don't want to be poor. Just how poor do you think it's okay for Little Old Ladies to be? Should men be less poor?

There's a word for this kind of thinking, Matt. Don't get lost in this stupid little maze.

Posted by: Avedon | Jan 19, 2005 10:10:00 AM

The gender-adjustment strikes me as probably a political non-starter, but a pretty reasonable idea.

Because of the wage gap and the phased-in retirement, womena already are effectively required to work longer by Social Security if they rely on their own retirement (OTOH, married women have a fairly decent chance of their husband dieing, and being eligible for his, usually higher, benefits before they retire, so this -- and gender adjustment -- are mostly harms to single women).

Gender adjustment is a dumb idea.

Posted by: cmdicely | Jan 19, 2005 10:21:54 AM

Matt wrote: An idea I've mentioned before that might accomplish some of the same things would be moving to a variable retirement age on a voluntary basis. Depending on whether you retired before or after age 65 (with a minimum age of 62) your annual benefits would either be slightly higher or slightly lower than the base benefit level in an actuarially fair manner.

What, you mean something like this? You also can retire at any time between age 62 and full retirement age. However, if you start at one of these early ages, your benefits are reduced a fraction of a percent for each month before your full retirement age. As a general rule, early retirement will give you about the same total Social Security benefits over your lifetime, but in smaller amounts to take into account the longer period you will receive them.

(Though allowing one to delay as well as accelerate retirement age is not a bad idea...)

Posted by: Alex R | Jan 19, 2005 11:05:31 AM

I wonder if the way to make the blue-collar/white-collar distinction (in a rough way) would be to tie it to number of years working instead of mere age. White collar workers typically go to college and often grad school--entering the workforce much later.

Posted by: Sebastian Holsclaw | Jan 19, 2005 12:43:20 PM

Matt seems to have been led fatally off message in this thread. Gender adjustment just sounds wrong to me, but even if it or related ideas have merit, they all fail the "explain it to the pointy-haired boss" test.

Posted by: Paul Callahan | Jan 19, 2005 12:48:21 PM

I think you need to think about it more. Raising the retirement age just for women? What was that about sexism again?

It has nothing to do with sexism. On average women live longer than men, so cutting the annual benefits of females would not result to a net, lifetime benefits cut to them. Anyway, we all know such an idea will never see the light of day -- rightly, in my opinion. Next on the agenda: cutting the benefits of caucasians, and cutting the benefits of 65-year olds whose genetic test results indicate they're likely to live to 100, and raising the FICA tax of genetically screened young people with similar results...

Posted by: P. B. Almeida | Jan 19, 2005 1:03:48 PM

Now when even Bill Thomas gets it ... I look forward to your Tapped piece!

Posted by: pgl | Jan 19, 2005 1:14:48 PM

What people are missing is that the debate is about (at least) two issues:

1. Disaggregating the money i.e. should individuals control their own constribution?
2. Where can the money be invested? (Even if it is in the SS Trust Fund as an aggregate.)

They are two separate issues.

Posted by: David Sucher | Jan 19, 2005 6:55:30 PM

AlexR pointed out above that Social Security already allows you to retire earlier than 65, with a permanently reduced benefit.

If you wait until after 65, your benefit is increased by a percentage for every year you are older than 65. The percentage is shown on the SSA website. Since SSA computes your benefit based on your highest 35 years, the longer you wait to collect it, the more the earlier years when you weren't making much will drop out of the calculation. You can also defer signing up for Medicare Part B without a penalty as long as you are working.

When you have an hour or two to spare, go to www.ssa.gov and poke around in their FAQ. You can also use their calculators to estimate what your benefit will be at various retirement ages.

Posted by: ej | Jan 19, 2005 7:34:53 PM

I can't believe anyone takes the idea of raising women's retirement age seriously. If you're going to start treating one part of the population differently on an actuarial basis, where the hell do you stop?

To take one example, since Blacks die younger, their retirement is shorter. Maybe we should let them retire at 50? Only fitting, since, as the Repubs love to tell us, SS is so unfair to them, and we all know how much the R's care for the plight of Black America.


What an utterly ridiculous idea.

Posted by: mario | Jan 20, 2005 10:16:22 AM

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