Conversation with Wendell Primus about how to fix Social Security

Amy Goldstein: The Social Security system is less than a decade—eight years, to be specific—away from not being able to pay Americans all the benefits it promises, according to two main federal forecasts. But Congress and a succession of presidents have a history of ignoring this problem. The last high-attention effort was early in the George W. Bush administration, and members of that 2001 presidential commission after six months were unable to agree on a single plan. Against that backdrop, how long have you been thinking about coming up with a plan to try to protect Social Security’s solvency, and did you have to leave Capitol Hill to do it?

Wendell Primus: Thanks, Amy. I’ve been thinking about this on and off for 40 years. I made mental notes to myself when former President Ronald Reagan and the Congress of that time took away benefits for unmarried college students whose parents were retired, disabled or no longer alive; I thought that was a mistake. I’ve also been concerned ever since 1993 when Congress devoted some Social Security revenue to help fund Medicare. But we’re getting closer to the time when Social Security will not have enough money. So, in the last two or three years, while I was working for Nancy Pelosi, I gave a lot of thought to this subject. Those ideas have now been put on paper and are being published in what we are calling, “Fixing Social Security: Blueprint for a Bipartisan Solution.”

Amy Goldstein: And did you have to leave the Hill to put out this paper?

Wendell Primus: Yes, to a large extent. Nancy Pelosi had a respect for the House committee chairs and did not want her staff preempting them. She had a rule that items like this had to come out of the committee of jurisdiction, which, in the case of Social Security, is Ways and Means. So, for myself, to put out a thought-out proposal, I had to do it at a place like Brookings, and it’s one of the reasons I came to Brookings, indeed, to do exactly this.

Amy Goldstein: In the broadest strokes, why are you doing this? What are you trying to accomplish with this blueprint?

Wendell Primus: I am trying to get Congress to move before the conventional wisdom of waiting until 2031 or 2032, when the trust funds will have nearly run dry. I believe very strongly that our largest social program needs to be bipartisan, and right now, there could not be a larger divide on the Hill about that. I wanted to show both Republicans and Democrats that there can be an approach that splits the difference between outlay reductions or benefit cuts versus tax increases. I want to jump-start the discussion about what can be done to make Social Security solvent and avoid the 17% cut that is going to happen in 2033.

Amy Goldstein: You mean when the program is expected to become insolvent, unable to pay full benefits?

Wendell Primus: Yes.

Amy Goldstein: You had some fundamental principles that have shaped your thinking for the blueprint. What are those goals, and which are the most critical?

Wendell Primus: The most critical one is restoring solvency. Social Security is a program that shouldn’t be changed every year because you want to give all Americans the confidence that the program is going to be there when they retire and that it’s not going to change dramatically. The last time we did major revisions to Social Security was 1983. Other important principles are that it not cut benefits for people currently receiving them and that it had to be bipartisan because you cannot do Social Security legislation on a reconciliation bill.

Amy Goldstein: Reconciliation meaning that you wouldn’t need the 60 votes in the Senate. You do need the 60 votes in this case, and no party is going to control that many votes.

Wendell Primus: Right. Restoring solvency is a politically good thing. You can say you saved Social Security, but to do that good thing, it’s all political pain. You can only get there by increasing taxes or reducing benefits. So, I wanted to make sure the major parts of this proposal would increase the progressivity, which would be primarily benefit reductions for higher earners and revenue increases on higher earners. I also wanted to increase the risk protection, and I’d like to get to universal participation. I think every American should be required to pay payroll taxes and then receive the benefits as the program by law mandates—including some state and local government workers who are now in separate pension systems.

Amy Goldstein: This blueprint has a lot of ideas in it—16 proposals. Which two or three do you consider the most important? Which ones will affect the most people in this country?

Wendell Primus: I think, in some sense, they’re all important because each has a clear rationale, and all the proposals, except the ones where we’re improving the benefits, help us get to solvency. The most important provisions are the ones that do the most to best help get us to solvency, which would be raising the amount of wages subject to the payroll tax and decreasing retirement benefits for the top wage earners. There are also some very innovative proposals in here, for example, a new disability definition that would help people who are at least age 58.

Amy Goldstein: You propose raising the age at which people can draw full Social Security retirement benefits eventually to 70, but only for people with high incomes. What’s the big idea behind that?

Wendell Primus: The simple reason is that the top 20 percent of earners, both female and male, live much longer than the bottom 20 percent of earners. And given the fact that, back in 1983, we already raised the retirement age across the board for everybody by two years, it does not make sense to do another across-the-board retirement age increase.

Amy Goldstein: So, the idea, then, is that those relatively affluent people will live longer, will collect Social Security benefits longer, so it’s fair to make them wait a little longer to begin getting those benefits.

Wendell Primus: Yes. And for the most part, higher earners sit behind their desk and don’t do hard physical labor, while many of the people in the bottom quintile are farmers and laborers and other people who are having to work hard physically.

Amy Goldstein: As we’ve been talking about, there are a lot of ideas in this blueprint, and I’m curious where they came from. Were there people who were important in helping to shape your thinking?

Wendell Primus: Absolutely. I’ve talked to a lot of people in the Social Security space, including the Bipartisan Policy Center, about what makes the most sense. I can tell you precisely where increasing the retirement age came from. I can tell you where the early disability benefit came from. These are not all ideas that Wendell Primus had. These were ideas that came up in conversations over a span of several years.

Amy Goldstein: You worked on the Hill with former Speaker Pelosi for almost two decades, and you’ve been around Washington a lot longer than that. What makes you think that the idea of raising certain taxes and cutting certain benefits for Social Security could become law? And you make the case that Congress should take this up in 2025. Is that really realistic? Or how soon would be soon enough?

Wendell Primus: Eventually, something will be done because of the huge benefit reduction that would happen in 2032 or 2033 when the program becomes insolvent. This proposal also has huge budget implications. It will reduce the budget deficit over the next 10 years, and we have unsustainable budget deficits right now. I’m trying to give cover to the current members of Congress by having a dozen or more former members, both Republican and Democrat, endorse this proposal and say it is a good place to start. As I mentioned, I was heavily involved in the legislation to give Medicare the authority to negotiate prescription drug prices. All of my friends and many members told me we would never succeed. That is now the law. Legislating is a team sport, and you’ve got to get 51 or 60 members of the Senate to agree. And it got done. I think if you have innovative, well-thought-out proposals with a solid rationale, you can get it done.