WASHINGTON – President Barack Obama said Tuesday that Social Security's long-term solvency can be secured by raising more revenues from wealthy taxpayers like Warren Buffett.
"I'll just give you one example of a change that would make a difference in Social Security," the president said at a town hall in Annendale, Virginia -- in response to a question from a woman who was concerned that Social Security may not be around in 25 years when she retires.
"The point is, for the vast majority of Americans, every dime you earn, you're paying some [taxes] in Social Security. But for Warren Buffett, he stops paying at a little bit over $100,000 and then the next $50 billion he’s not paying a dime in Social Security taxes."
The president added: "So if we just made a little bit of an adjustment in terms of the cap on Social Security, that would do a significant amount to stabilize the system. And that’s just an example of the kinds of changes that we can make."
The policy change here would involve taxing Americans on income above above $106,800 to help pay for Social Security. The payroll tax is currently capped at that level. Obama's proposal, which he campaigned on in 2008 but has so far been quiet about as president, would yield significantly higher revenues from top income earners to mitigate Social Security's long-term financial woes.
Although the program's payouts exceeded revenues for the first time last year, the Social Security Trust Fund boasts a surplus of $2.6 trillion and is expected to remain solvent in its current form until 2037, according to its 2010 trustees report. After that, it would only be capable of paying 75 percent of benefits.
Obama said Tuesday that Social Security is "not the major driver of our deficit. And what I've proposed is let's work on Social Security, but let's not confuse that with this major budget debate."
The president's remarks come after months of speculation that the White House may strike a deal with Congress to cover Social Security's long-term shortfall by cutting benefits -- perhaps by raising the retirement age, which some top Democrats have endorsed and Republicans are supportive of.
Although the bipartisan "Gang of Six" senators are reportedly considering reductions to the cherished seniors program, Senate Majority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA) have taken Social Security cuts off the table.