AARP Says Social Security Needs Small Changes, Not a Makeover

The Social Security program can be stabilized through a series of small fixes and does not need a major overhaul that would include private investment accounts, the nation’s largest lobby group for the elderly said Wednesday.

AARP, formerly known as the American Assn. for Retired Persons, said the amount of wages that can be taxed for Social Security should be raised from $90,000 to $140,000.

The change could be phased in over 10 years and would cut the projected shortfall by 43%, AARP said.

The government should also diversify investments for the fund that pays out the benefit to include a total market index fund that would yield a higher return, according to the group. That could reduce the shortfall by another 15%.

“Social Security does not need a radical overhaul,” AARP Chief Executive William Novelli said in speech at the National Press Club. “Reasonable steps such as these, including possibly adjusting benefits, are enough to strengthen Social Security for the long term.”

President Bush has called for a broad overhaul of the 70-year-old Social Security program, and has made adding private retirement accounts to the system his top domestic priority.