While researching potential topics for my issues brief, I decided that the controversy surrounding social security would be great for the assignment and following advocacy project. Although my issues brief would focus more on personal finances for retirement rather than persuading for one side of the political argument, this blog post will focus equally on all sides of the issue surrounding social security.

First, it is important to understand what social security is. Social security is a program that benefits retired, disabled, or deceased workers and potentially their families. This system relies on current workers paying for the benefits of those who are no longer working. Typically, a worker pays 6.2% of his or her earnings (up to a cap), and the employer will match that, contributing a total of 12.4% to social security. The money is then distributed as various social security benefits. According to the National Academy of Social Insurance, “About 158 million Americans pay Social Security taxes and 57 million collect monthly benefits in 2013. About one household in four receives income from Social Security.” Additionally, average social security benefits in January 2013 were as follows:

• $1,264 a month for retired workers
• $1,217 a month for widows or widowers over the age of 60
• $1,130 a month for disabled workers
• $1,735 a month for a disabled worker, spouse, and one or more young children
• $2,536 a month for a widowed mother and two children

The issue surrounding social security is that within our lifetime, social security is predicted to have benefit cutbacks or tax increases to maintain at its current level. The people that are most likely to feel the impact of this would be our age group. The reason that this would have a major impact is because programs like social security keep people out of poverty. According to the NASI, “Social Security plays an important role in keeping older Americans out of poverty. The poverty threshold was $11,011 for an aged individual and $13,878 for an aged couple in 2012. About one in 10 Americans age 65 and older is poor, by this measure. If they had to rely only on their income other than Social Security, nearly half would be poor. Overall, Social Security keeps 21 million Americans out of poverty, including nearly 14.5 million seniors and 1 million children.” However, by the time current young adults reach retirement age, social security will have changed significantly. It is predicted by the Office of the Chief Actuary of Social Security that at the current rate, trust fund assets would be exhausted and only 77% of the benefits currently will be received in 2033. There are a couple different approaches to handling this issue.

One way would be to increase taxes in order to pay for the same social security benefits. By increasing taxes on workers, those who benefit would be able to receive relatively the same amount of benefits. According to the Congressional Budget Office, starting in 2016, the program’s spending will consistently be greater than its revenues. If funding is not found elsewhere, that means this would increase the deficit. It could be balanced by raising taxes by 2-3% total, which means a 1.5% raise for workers, because it would be matched by employers. Ways to increase social security revenue include:

• Raising the taxable earnings cap, which is $113,700 in 2013
• Raising the Social Security tax rate in the future
• Earmarking other taxes for Social Security in the future
• Investing part of Social Security funds in equities
• Extending Social Security coverage to the 25 percent of state and local government employees not now covered

Another way would be to reduce benefits. Reducing benefits would decrease the size of the program, but it would also help to not increase the deficit more because this is such a costly program. According to the National Academy of Social Insurance, ways to reduce benefits include:

• Further raising the eligibility age for full retirement benefits
• Raising the eligibility age for early retirement benefits
• Lowering the cost-of-living adjustment
• Indexing benefits for new beneficiaries to keep pace only with price increases, instead of wage increases
• Gradually scaling back benefits

A completely different way would be to privatize social security, which would mean that each individual worker is responsible for his or her retirement funds. Funds would likely be used for long-term investments in order to accumulate for the future. Proponents of this argue that this way would allow workers to directly see the future benefits of the money they save. This also prevents social security surpluses to be spent on other programs, since each person saves in a private account. Additionally, proponents say that these types of investments would benefit the economy. Those who argue against privatizing social security believe that it would be a very costly system to begin, and the transition period would severely hurt those who rely currently on social security. Additionally, if anything were to fail with the stock market, many would lose their retirement funds.

Either way, social security is an important issue for people our age because we are likely the ones that will see major changes and have to make decisions about how to fund retirement. Personally, I know I want to help retire my parents, so whatever happens, I will at least be able to make sure my family is taken care of while I am working. Furthermore, it would probably be a smart and proactive decision to start saving for my own retirement immediately. In a macroeconomics class, we discussed that saving approximately 10 to 15% of earnings would be enough to pay for a person’s retirement. In a situation that could go either way, it would be best to be prepared. If it becomes privatized, having personal savings its essential, and if benefits decrease, you would have additional savings to live comfortably.

It has been about a month since President Obama’s State of the Union Address, and it in, he proposed numerous ideas. One that stuck with me as a college student was the idea of free education for students. In his speech, he said:

 To make sure folks keep earning higher wages down the road, we have to do more to help Americans upgrade their skills. America thrived in the 20th century because we made high school free, sent a generation of GIs to college, and trained the best workforce in the world. But in a 21st century economy that rewards knowledge like never before, we need to do more. By the end of this decade, two in three job openings will require some higher education. And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need. It’s not fair to them, and it’s not smart for our future. That’s why I am sending this Congress a bold new plan to lower the cost of community college to zero… Whoever you are, this plan is your chance to graduate ready for the new economy, without a load of debt. Understand, you’ve got to earn it. You’ve got to keep your grades up and graduate on time… I want to spread this idea all across America, so that two years of college becomes as free and universal in America as high school is today.

There are several details to his plan for free community college, which has been named America’s College Promise. Students who are enrolled at least half time, maintain a GPA of 2.5 or higher, and are making progress toward graduating on time or intend to transfer to a four-year institution for a bachelors degree are eligible to have tuition costs waived at any two-year community college. Obama stated that 40% of college students attend community college, and he wants every person that wants to receive higher education to be able to afford it. The White House estimates that 9 million students would be able to benefit from this per year, and each student would save around $3,800 annually at any of the 1,100 community colleges available across the nation. The administration also estimates that this plan will cost about $60 billion over ten years.

Many people were excited when Obama announced his plan for free college education. Who wouldn’t support free higher education, especially considering the alarming amount of students with enormous debt and the increasing necessity for a degree? Students whose families cannot afford college are likely receiving the financial aid they need to attend school. However, there is still a large middle class that is not readily able to afford college but do not qualify for the necessary amount of financial aid. This also is a way to provide an inexpensive foundation if students wanted to continue their education after community college and earn a bachelors degree. The GPA requirement also encourages students to work hard and keep graduation or futher education a constant goal. For example, I am only able to attend Penn State because of scholarships and financial aid. Knowing that they are contingent upon maintaining a certain GPA pushes me to work hard because I know that my ability to attend this school is at stake. For other students in a similar situation, the requirements could help keep them stay focused. Overall, this plan is estimated to help 9 million students per year, and they may be students that otherwise could or would not have gone to college at all. This would encourage more high school students to prepare for college, knowing that money will not necessarily hold them back from attending for at least two years. This also means that free college education would allow more of our population to receive higher education, which would lead to a more educated workforce, which could in turn improve the economy as well.

However, this topic has been heavily debated since it has come to fruition. Many people feel that this may not be an effective approach. The actual price of a college education includes more than just tuition. There are still book, food, and housing costs even if tuition is paid for, so it is not entirely free, not to mention the opportunity cost of not being able to join the workforce full-time. Others argue that the price of tuition for community college is inexpensive enough that a student could be able to pay the majority of it with a part-time job. People may also believe that college is a decision that should be made by the individual student. College is not the path for everyone, but with America’s College Promise, it may make students feel like college has to be the next step. Another argument is that for students who want to go to a community college for free and then transfer to a four-year university may find that many of their credits do not transfer, which would make the previous two years almost useless. Others are also worried that it will trivialize the value of a college education. A high school education is currently the standard, and it is difficult to find a good job without a high school diploma. Free college education could make a college degree the new standard. With these concerns, people hesitate to support such a costly program. $60 billion over the span of 10 years will surely add to our deficit, and many are opposed to that idea. As a compromise, people may support improved financial aid for students instead, which could partially or fully help students with need pay for college and would be a less costly program.

Overall, the idea of free college education has begun to gain attention. There is debate over whether or not it will be a beneficial program and if there is perhaps a better alternative. Regardless, we will see in the next few years if this plan ever gets passed either as is or with adjustments or if it doesn’t get passed at all.

On Tuesday, President Obama gave his State of the Union address at the House. This annual speech by the President describes the current state and goals of the country for the upcoming years. As a joint session, both Republicans and Democrats sit in the seats as the President gives his speech. Immediately following the speech is usually an opposing response, which is a brief speech from a member of the opposite party.

Obama after his cheeky comment

In my opinion, the delivery was excellent, and the hour long speech was overflowing with rhetoric. The tone was more conversational, and at times there were even some funny moments. One that has been called a “comeback to Republicans” comes to mind. President Obama says, “I have no more campaigns to run,” and the Republicans clap and cheer, likely because they are happy to see Obama leave office. Then he strays from his script and says, “I know because I won both of them,” and all the Democrats clap even louder, happy to have seen their candidate win two elections in a row. Obama flashes his classic smirk and gives a wink to the audience.

In his speech, Obama brought up several points that he would like to focus on in the future such as child care, free education, transparency in the government, improving the economy, stopping terrorism, and protecting the environment. Although there were many more topics that were brought up, the one that stood out to me was how he spoke about bipartisanship.

The divide between the political parties was clearly heard not only during the moment where he made a witty comment, but throughout the entire speech. Republicans and Democrats stood up, clapped, and cheered after they heard something that they approved of and supported. It could also be noticed just by looking at the screen. A blatant representation of how each party feels is sitting directly behind the President at all times during his speech. To the left behind Obama is the Vice President, Joe Biden, and to the right is the Speaker of the House, Republican John Boehner. Biden clapped and stood up in support of the President, and Boehner may or may not have been sleeping. So clearly, it was a relevant topic for the President to bring up. He concluded his speech by emphasizing the importance of the two parties working together. He said:

Imagine if we broke out of these tired old patterns… Understand – a better politics isn’t one where Democrats abandon their agenda or Republicans simply embrace mine. A better politics is one where we appeal to each other’s basic decency instead of our basest fears.

He continues by pointing out common ground in issues that parties have contrasting views on, and he encourages both parties to understand the other and compromise. He continues:

If you share the broad vision I outlined tonight, join me in the work at hand. If you disagree with parts of it, I hope you’ll at least work with me where you do agree. And I commit to every Republican here tonight that I will not only seek out your ideas, I will seek to work with you to make this country stronger… [W]e are still more than a collection of red states and blue states; we are the United States of America…Let’s begin this new chapter – together – and let’s start the work right now.

Immediately after the President of the United States spoke these words, the Republican response came on, which is meant to present the opposing opinion. Senator Joni Ernst from Iowa gave the Republican response. Although I strongly prefered the rhetoric and execution of Obama’s speech over hers, looking at the content as objectively as possible, I believe she took a similar approach as Obama did for the root message of her speech. She laid out plans that the Republicans intend to follow, and she said that they are willing and waiting to work together with the Democrats. Comparing these two speeches, it seems like both parties have certain issues that they remain firm on, but they are both entertaining the thought of compromising and working together. Perhaps they do not actually intend on compromising, but instead just want the other party to cooperate completely to get legislation passed. Unfortunately, we will not know if the two parties will be able to truly come together until they are actually doing it. However, throughout history, compromise between the two parties have proven incredibly difficult.

One of the biggest examples of this is how politicians run for office. According to Pew Research Center, voters have become increasingly more polarized, and the most ideologically oriented people are more likely to vote. For these reasons, it is difficult for a moderate or a third party politician to get elected. Instead, politicians become more ideologically pure, and lean toward the extremes of their parties to get votes. Once elected, their constituents are obviously expecting them to follow through with their ideas. With strongly leaning Democrats and Republicans, no wonder it is difficult to compromise and we experience gridlock.

Another issue is that politicians from one party benefit by getting voters to hate the opposing party, which also makes them tend toward ideological extremes. This can be shown by the lack of ticket-splitting in recent years. According to the Pew Research Center, 81% of voters will vote straight ticket. This means that the majority of voters do not want even one person of the opposite party at any level at all.

With an increasing polarization among American voters and politicians, will there ever truly be compromise? Do we believe what President Obama and Senator Ernst have said in their speeches about wanting to work together or was this only for show and votes? In the case that things remain the same and there is a strong partisan divide, will our country be gridlocked and stagnant? What do these growing issues portend about the 2016 Presidential election, and will a new President be able to give Americans “the better politics” that Obama spoke about in his speech? Only time and action will tell.