Continued Financing Squeeze
Mounting Concern About Cost of System
Beginning in July, Social Security recipients will get a 9.9 percent increase in benefits to offset recent rises in the cost of living. The increase, the largest since Congress authorized automatic inflation adjustments in 1972, will add $10.2 billion to the Social Security retirement and disability tab, now running at nearly $100 billion a year.1 Although the rise in benefits will not entail any increase in Social Security taxes beyond those already mandated by law, it is likely to add fuel to the mounting taxpayers' revolt over the payroll tax bite.
Congress in 1977 approved steep increases in both Social Security tax rates and in the wage levels on which the tax is paid, to take effect between ...