Washington Â» Workers born in 1970 and every year thereafter would have to wait until their 70th birthday to retire and wealthy people would receive smaller monthly checks under Sen. Mike Lee's plan to keep Social Security financially sound for future generations.
Lee, R-Utah, unveiled his proposal with fellow Sens. Rand Paul, R-Ky., and Lindsey Graham, R-S.C., on Wednesday, the same day President Barack Obama delivered a major speech on the nation's debt woes.
While the senators made the case for immediate action, Obama in his address, mentioned Social Security reform as a long-term need.
"The president," the White House said, "does not believe that Social Security is a driver of our near-term deficit problems or is currently in crisis."
This marks the first year the government pays out more in Social Security benefits than it raises in taxes and if no actions are taken by 2037, the government would be forced to significantly cut the benefits it provides seniors.
The three senators' plan includes no tax increases and avoids the touchy topic of private accounts allowing workers to invest their Social Security dollars in the stock market. The highly charged debate about private accounts derailed President George W. Bush's 2005 attempt to reform Social Security, the last time Congress seriously considered such a proposal. At that time, Lee's predecessor, former Sen. Bob Bennett, championed the issue.
While Lee, Paul and Graham still support private accounts, they said that after the recent financial crisis, the issue has no chance of passing.
"It is not politically viable," Graham said, "because of the stock market crash."
The South Carolina senator drew a sharp line against any Democratic attempts to extend the life of Social Security by raising taxes. Instead, the senators' plan would slowly extend today's retirement age of 67 to 70 in 2032 and then link it to life expectancy after that. That would mean for people born in 2011, they would have to work 71 years and nine months before getting Social Security benefits.
The plan would not impact anyone above age 56 and would not reduce benefits for those already over 67.
But it would reduce benefits for many, particularly the wealthy. It would have no impact on the first $43,000 of a person's average lifetime earnings, but would slow the benefits on any amount after that. Graham said the reduction for the wealthy would be the equivalent of nearly $300 a month in 2030.
"We are asking upper-income Americans to forgo future benefits," he said, "rather than raising their taxes."
The three senators said their proposal needs to pass now and warned that waiting would force people to work even longer or reduce their benefit checks even more.
"If we don't do this," the freshman senator said, "it makes it much more difficult down the road to address the problem."
That position is not shared by Senate Majority Leader Harry Reid, D-Nev., who in a TV interview last month, said: "Leave Social Security alone. We have a lot of other places we can look that is in crisis, but Social Security is not."
Lee said he would be unwilling to exchange a vote on his Social Security plan for a vote to extend the nation's debt limit. Congress is slated to take a vote on extending the debt limit in May. If it doesn't do so, the nation could default on international loans. Lee has been an outspoken voice against extending the debt limit, while many Republicans have said they would do so only in tandem with significant budget cuts.
Graham said he would take such a deal.
"Absolutely," he said. "It would be one of the best achievements any three senators could hope to have."