Saving the federal government’s $900 billion Social Security program is no easy feat, but the key is making reform slow and steady, James Lockhart told CNBC last Thursday.
Lockhart, who was deputy commissioner of the Social Security Administration under former President George W. Bush, said he and his peers at the Bipartisan Policy Center have crafted proposals for saving the nationwide benefits program that serves more than 60 million people.
“We created a solvent system for 75 and beyond years,” Lockhart told “Squawk Box.” “One of the things we do that I think is very beneficial is … we slow down the growth of benefits, and yes, we have to increase revenue somewhat, but we also improve the benefits for the lower income [people].”
The concern surrounding the survival of the program comes from the Congressional Budget Office’s long-term projections, which show Social Security’s funds running out by 2029.
“I think the key issue is that [President Donald Trump has] said ‘No cuts to Social Security,’ and we will have cuts to Social Security if you believe the CBO. In 12 years, we’re going to have a 29 percent cut across the board,” Lockhart said.
So Lockhart, vice chairman of Commerce Secretary Wilbur Ross’ private equity firm WL Ross & Co., decided to find a way to save the program for the baby boomers and the generations to follow.
“What we’re trying to do is create a program that’s very balanced,” he said. “This was a bipartisan group, and so we actually got about 50 percent of the savings from revenues and 50 percent from benefits.”
To do so, Lockhart said the group proposed a gradual increase in how much higher-income Americans pay to Social Security as a percentage of their paycheck, and an uptick in Social Security taxes for the well-off after they retire.
“We don’t cut benefits for the lower income, and I think that’s really the important thing,” he said.
The plans also suggest raising the retirement age by one month every two years to keep up with people living longer and boosting retirement savings outside of Social Security to get more people on pensions, Lockhart added.
“All our proposals are very gradual, and that’s the key thing. But they do save about a trillion dollars in the first 10 years of implementation, which is a big number and will help offset some of the other things they’re talking about in Washington,” the former deputy commissioner said.