Americans are living and working longer, and Alice Rivlin, a member of President Obama’s National Commission on Fiscal Responsibility and Reform, told CNBC it is time the Social Security retirement age reflects this fact of life.
“(The) commitments to older people are driving federal spending up faster than the economy is growing and faster than taxes are growing,” said Rivlin, a former vice chair of the Federal Reserve Board (1996-1999) and director of the White House Office of Management and Budget (1994-1996).
Rivlin said raising the Social Security retirement age and changing the way benefits are calculated would help put the agency on a sound footing.
“I think it would send a message to our creditors around the world that we’re serious about making long-term change,” she said.
Rivlin also recommended revamping income taxes, which she called “complicated” and “unfair.”
“We could make the tax much simpler, get rid of a lot of exclusions and reductions that are special favors to people and keep rates where they are or lower them and raise more revenue,” she explained.
The National Commission on Fiscal Responsibility and Reform has been tasked with proposing recommendations designed to balance the budget by 2015 and helping put the country on a path to fiscal sustainability over the long run. Its recommendations will not be forced upon Congress, but Rivlin expects the commission’s recommendations will come up in Congress for a vote.