A remarkable thing happened at a U.S. Senate Finance subcommittee hearing Wednesday on America’s retirement crisis and Social Security. Despite initial remarks from senators and experts who stuck to predictable talking points from the right and the left, none of the Republicans or any of their experts said that benefits could not be increased—at least for America’s poor.

Instead, a fairly serious discussion ensued. Well-respected economists on both sides of the aisle agreed it would not be hard or costly to shore up benefits for the poor by as much as 10 or 15 percent, which would markedly improve their quality of life. While no specific commitment was made on where this discussion would go next, it was a sign that the entitlement reform debate is moving beyond just cuts and austerity.

“I have argued for a more far-reaching reform, similar to what you have in New Zealand or the U.K., where every retiree receives a flat benefit at the poverty level. The idea is that you take poverty among [America’s] seniors, which today is at 9 percent, down to zero percent,” said Andrew G. Biggs, an American Enterprise Institute scholar who was the head of Social Security research in the George W. Bush administration.

“On top of that, if you want to have a benefit above poverty, we need to sign people up for employer-sponsored plans or IRAs or something along those lines,” Biggs continued. “Social Security—I’m not going to say that it does not cut poverty. Clearly it does.”

Some of Biggs’ other ideas did not sit well with progressive economists, such as saying that benefits for middle-income earners were more than sufficient and could be cut, as well as suggesting it was a bad idea to raise taxes on wealthier Americans to better fund Social Security. But after years of threatened cuts to entitlements by the GOP and championed by Wall Street titans who want to avoid higher taxes, a serious discussion about updating the safety net was seen as a striking development.

“It was encouraging,” said Dean Baker, co-director of the Center for Economic and Policy Research, who also testified at the hearing. “We talked about increasing benefits. No one stood up and said we can’t do that. We have had our backs against the wall for more than a decade. They’ve been saying it has to be cut and by this much."

“Now we are talking about people ensuring they have a decent retirement,” he continued. “We have really moved the ball… I don’t take anything for granted in Washington, but I actually think we can do something positive instead of stopping something negative.”

Baker credits the outspokenness of a handful of U.S. senators—most notably Elizabeth Warren, D-MA—and the groundswell they have sparked for the shift in tone. The Senate hearing was convened by Subcommittee Chair Sherrod Brown, D-OH, who has been an outspoken supporter of modernizing Social Security by increasing benefits and raising the cap on the portion of income taxes that are taxed to fund it.

Pushing Talking Points Aside

Sherrod Brown said Wednesday’s hearing would be the first of several on addressing America’s retirement crisis and fortifying Social Security. It began with Brown reciting a litany of reasons why aging Americans are worse off than previous generations and how tens of millions of people will not be able to maintain their lifestyles if they stopped working.

“One-third of Americans aged 45 to 64 have nothing saved for retirement at all,” he said. “The numbers are no better for workers with a retirement plan. In 2010, 75 percent of Americans nearing retirement age had less than $30,000 in their retirement accounts. For minority workers the situation is dire… 80 percent of Latino households age 25 to 64 have less than $10,000 in retirement savings.”

“These facts illustrate how great the need is for maintaining and expanding Social Security—the only source of guaranteed lifetime benefits on which most retirees can rely,” Brown said. “Social insurance doesn’t just provide much needed financial support. It ensures that hardworking. middle-class people can retire with dignity.”

Brown’s remarks represent the way progressives and growing numbers of Democrats are now talking about Social Security. They are slowly taking the discussion away from the GOP’s obsession about cutting future entitlements to retire the federal debt.

At the end of 2012, about 57 million people were beneficiaries, including 36.7 million retirees, according to the American Association of Retired Persons. The rest were 8.8 million disabled workers; 4.4 million children; 4.3 million widows, widowers, and parents; and 2.4 million spouses. The average monthly benefit is about $1,300 a month, and the maximum individual benefit is $2,530 a month.

On the slightly positive side, a handful of Republicans, including subcommittee vice-chair, Sen. Patrick Toomey, R-PA, attended and listened instead of boycotting the panel as is usually the case in the House. But when Toomey spoke, he recited a predictable list of GOP talking points that aren’t intended to address this crisis.

Toomey said Social Security was all but broke (it won’t be for 20 years). He implied benefits had to be cut to ensure its survival for future generations (fanning generational warfare). He said that raising Social Security taxes for wealthier people was “radical,” as only the first $117,000 of income is taxed, and didn’t solve the problem. But he wanted to push people to save and invest more with Wall Street “to give taxpayers choice.”

But Toomey and Sen. Johnny Isakson, R-GA, heard an earful from experts who reframed the discussion away from an austerity centered focus. AARP president Robert Romasco, pointedly said that the discussion is not about retiring debt and budget numbers, but about “caring and dignity” for recipients, including children who prematurely loose a parent.

“We hear the young and old are rivals in the battle for finite resources—that’s not what I see,” he said, adding that the great shift in wealth in America in recent years has not been between age groups, but lower and middle classes to those atop the ecomomic ladder.

Baker departed from his prepared remarks and told Toomey he was incorrect to say that Social Security was “cash-flow negative,” noting that its finances are managed the same way as private companies, including counting interest income as an asset. He reminded the Republicans that Social Security is the main source of income for “most of the senior population” and that dependency will grow in the future, because traditional pensions have vanished and investment accounts are not adequate.

Baker then listed four ways Social Security could be improved and expanded. First, an increase in the basic benefit of 5 percent a month, or roughly $55, “would increase costs by less than 0.3 percent of a payroll,” he said. “Increasing the benefit for surviving spouses to 75 percent of their joint benefit is another relatively low-cost way to improve retirement security.”

Congress should use a better inflation guage to track cost-of-living expenses and increases for the elderly, Baker said, adding that Republicans are underestimating Obamacare’s impact on lowering healthcare costs—which is often seniors' biggest expense.

“The goal is to have an index that accurately measures the rate of inflation seen by the elderly,” he said, saying that Congress can instruct the Bureau of Labor Statistics to create that tool. In contrast, the so-called chained CPI, favored by President Obama, would cut benefits by 0.2 to 0.3 percent a year, which doesn’t sound like much, but accumulates over time. “After 20 years the cut would be 6 percent and after 30 years it would be 9 percent.”

Baker and Romasco also suggested that Congress give workers the ability to create portable retirement accounts that they could keep regardless of where they worked.

When AEI’s Biggs and Fidelity Investment’s John Sweeney spoke, they tended to focus on the benefit that could come from more private sector saving and investment options. Both said Americans did not save enough and even suggested that employees be required by the government to allocate a portion of their paycheck—between 10 and 15 percent—to a personal retirement plan. Baker agreed that have better saving options could be good, suggesting that Congress allow individuals to invest in their state’s biggest public employee retirement pools.

There was also discussion about raising the age that retirement benefits begin. AARP’s Romasco was most strident in saying no, noting that different jobs wear out people’s bodies and it was unfair to start picking and choosing between career paths. He dismissed the contention that Americans could work longer because most sat behind desks and worked with computers.

“You talked about in your testimony that Social Security has become the primary source of retirement income, and you also point out that 78 million Americans don’t have access to a workplace retirement plan,” Sen. Bob Casey, D-PA, said to the AARP president. “That’s a really stunning number. We can debate how that’s happened. But what would you hope that the Congress would do in the next two years or so?”

“Well, first thing, let’s make sure we don’t conflate this conversation with the deficit conversation. This is a real challenge—the retirement challenge,” Romasco said, restating AARP’s main point—that Social Security was sufficiently funded to pay “promised benefits for the next 20 years” and deserved its own modernization discussion.

“Let’s not look at Social Security as a piggy-back to solve the deficit,” he said. “Let’s have a separate conversation about that. And then ask the fundamental question: what kind of country do we want? What can we afford? What are we willing to pay for?”