Let's Save Social Security

A Bipartisan Proposal to Modernize the Flagship American Pension Program

When Social Security was first created in 1935, it dramatically reduced poverty among the elderly. To this day, it remains one of the most successful programs in American history — allowing seniors to spend their golden years with dignity after a lifetime of hard work and service to the American public.

But now, Social Security is facing mounting pressure from two converging trends: a historic wave of Baby Boomers entering retirement and a steady rise in life expectancy. As more Americans collect benefits for longer periods, the Social Security Trust Fund is starting to disperse benefits faster than it can collect new taxes. And yet, despite widespread concern, Congress remains gridlocked — because any change to the funding of Social Security requires a filibuster-proof majority in the Senate, making even bipartisan reforms procedurally out of reach.

If we cannot increase funding to the program to match the growing number of beneficiaries, the Social Security Trust Fund will deplete, leading to reduced benefits and jeopardizing the financial security of millions of seniors.

But the answer is not to eliminate the filibuster. It's a double-edged sword; while the filibuster prevents us from easily raising Social Security taxes, it also protects the program from a simple majority of Republican senators from cutting the program.

Since Social Security itself is procedurally difficult to change, the best way to save it is to set up parallel programs that work in tandem to ensure that any American can retire with dignity and comfort.

These two policies are intended to be advanced in parallel (but not necessarily in the same bill) similar to the Infrastructure Investment and Jobs Act (regular order) and the Inflation Reduction Act (reconciliation) from the 117th Congress (both signed into law by President Biden during his first 2 years in office).

Let's Provide Health Savings Accounts for All Children

And Invest in American Prosperity at the Same Time

The first proposal is to provide Health Savings Accounts (HSAs) for all children (stretch goal: also adults under 26), allow parents and legal guardians to make tax-deferred contributions to the account, seed the account at birth, and invest the funds in the American Societal Bond Fund. The interest income would not be reinvested, and instead be deposited into the settlement fund of the account, where they would be held in U.S. Treasury bonds or money market funds. Account holders would be allowed to reinvest into the bond fund, or even set up automatic reinvestments, but they would not be able to sell any bonds. Withdrawals could then be made from the settlement fund under the same conditions as current HSA rules.

This would be an expansion of Social Security, not a privatization, because the filibuster makes it effectively impossible for a simple majority of Republican senators to cut funding to the program. And unlike blank-check corporate welfare, lending to underfinanced small businesses, students, and construction workers through bonds supports the real economy instead of corporate America.

Let's Protect, Expand, and Modernize Social Security with Basic Income

A Plan-B Program for When Social Security Runs Out of Money

The second proposal is to implement a new Basic Income program that initially mimics the structure of Social Security in every way but name. Furthermore, we can set up a Basic Income Trust Fund and make the dispersal of funds contingent on the total depletion of the Social Security Trust Fund.

If we can set up this kind of Basic Income program, then it is okay for Social Security to run out of money. I would even argue that Basic Income is better than Social Security, since the idea of using a wealth tax to fund tax relief has appeal outside the duopoly and opens up the opportunity for an expansion of Basic Income in the future.

And as an American of Japanese descent, who has a living relative that spent some of her childhood in one of FDR's internment camps, I will say that if — and only if — we can create a parallel program that mimics Social Security, then I personally wouldn't be too upset if we allowed the Social Security Trust Fund to deplete, because we'll then have a modern Plan-B program that's waiting in the wings, ready to offset a reduction in benefits on day one.

It will always be difficult to change Social Security, so there's a possibility it will stick around for a while in its current form. (Also, what's to stop the program from running at a deficit, like the entire government has for basically my whole life? ¯\_(ツ)_/¯) It would probably make the most sense to start out by assuming we would fund Basic Income by hiking income taxes on high earners, since that would be logically equivalent to raising the cap on Social Security payroll taxes. But it would be even better if we could instead fund it through wealth taxes or corporate taxes. If we can eventually shift away from payroll taxes, then there may be a reason one day to gradually repeal and replace Social Security with a Basic Income system designed for the 21st Century, without any interruption to the vital service for our seniors.

Let's Regulate Investments Within Tax-Advantaged Accounts

Tax-Advantaged Accounts Should Only Allow Investments That Don't Harm America

I am proposing we ban investments in Chinese equities in all tax-advantaged accounts — 401(k), IRA, HSA, 529, etc. Why should investment gains that could otherwise be used to provide for the common defense of the United States be sheltered from taxation, only to be redirected into Chinese corporations? It simply doesn't make sense. Many American investors diversify their portfolio by investing in international markets, but many don't realize that broad-market international and emerging markets funds contain Chinese equities.

Additionally, I am proposing a new tax called the corporate dividend tax to be applied on the dividends of large-cap equities in tax-advantaged accounts. The purpose of this tax is to stop investors from unwittingly using their retirement accounts as corporate tax shelters. The tax rate should be kept fairly small, say 15% in accounts with tax-free growth or 5% in accounts with tax-deferred growth.

To offset the loss in growth from this tax, I also propose a universal matching program, where the revenues from the corporate dividend tax are used to fund a government match for investments in U.S. small businesses

While the corporate dividend tax is proportional (it scales with the size of the investment in large-cap equities), the small business investment match is universal: every eligible investor receives the same matching benefit when they invest in U.S. small businesses, regardless of account size. This ensures that ordinary American investors benefit just as much as the wealthy, helping to rebalance a system that has long favored passive corporate profits over active community growth.