I have many good friends who are retired and many good friends who receive Social Security disability benefits. I am concerned that my good friends might lose their benefits because Social Security is nearly broke, flat, busted, bankrupt. That is unacceptable. I want to lead on this issue by highlighting the problem. We need to confront this issue now; any alternative would be kicking the can down the road.
I don’t know how to solve this problem, maybe my good friends would make a suggestion. I do know what won’t work.
- The administration’s plan to transfer money from one program to another. That would be robbing Peter to pay Paul, or maybe robbing David to pay someone whose number isn’t in my cell phone.
- Raising taxes–that wouldn’t be fair to my good friends who aren’t retired or disabled. My other friends wouldn’t want that.
Some say we should raise the tax cap on Social Security taxes. But if we raise the taxes on my wealthy friends income, we would have to increase their benefits as well, so that won’t work; nice try though.
Many of my disabled friends tell me they would prefer to work rather than be takers. I know that there are jobs to be had if only people would look for them. All except the catastrophically disabled ought to be able to find some job somewhere in the country. Good luck to you, my friends.
Social Security ran a $48 billion deficit last year. However, there is still over $ 2.8 trillion excess in the trust fund. According to Bernie Sanders the system is completely solvent for another 18 years. And, if the pay for all workers had kept pace with the pay for the highest 1% we would have over $ 1.1 trillion MORE in the fund today. Making it solvent for 38 years. (http://cnsnews.com/news/article/ali-meyer/sen-bernie-sanders-when-people-tell-you-social-security-going-broke-tell-them).
This is NOT a difficult problem to solve.
1. Raising the minimum wage to a living wage for all adult full time workers brings in billions of dollars of new revenue into the SS system.
2. Eliminating the cap on income that is taxed for SS brings in billions more. As a PER CENT of their income the working poor pay much more into SS than the wealthy. Is that “fair”?
3. Putting a new, small tax on corporate income adds billions more. Let us not forget that corporations are people, too.
4. Means-testing the distribution of funds saves billions, as well. Social Security is not a savings plan.It was not designed as such. It is a social program designed to help the aged and disabled supplement their income. Just as food stamps are not provided to those who don’t meet an income threshold, the same could easily be done for SS.
I have watched for 30 years as Congress and the political parties have used SS to scare people, pander to people and blame people. It is not a difficult fix. It only takes the political will to do it.
Means testing turns an insurance program into a poverty program; I’m opposed to that. If raising the income cap must increase benefits for the rich, so be it. If we had the will, we could tax that money right back into the treasury.
I disagree.Social Security IS a type of poverty program. It was created to help people in old age (and others like widows, orphans)who did not have adequate resources to live a decent life. FDR specifically created a committee to deal with the problem of “economic security of individuals”. That committee created SS. It was created to help people who were not economically secure. There is no reason for people who don’t need it to get it.
Nay; it is akin to life insurance. One pays into the program while working and gets benefits in old age. Every participant is entitled to benefits in proportion to their contributions. This is the basis for Rep. Reed’s argument that if the rich are required to pay more taxes, they would be entitled to more benefits. SS is a very conservative program in many respects. If it were a poverty program, one might expect benefits in proportion to one’s need rather than to one’s contributions.
I guess we will have to agree to disagree. I refer to the original purpose of the program. To provide old age benefits for those in need who had little or no retirement assets..
In the United States, Social Security is primarily the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. The original Social Security Act (1935) and the current version of the Act, as amended, encompass several social welfare and social insurance programs. Social Security is funded through payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). Tax deposits are collected by the Internal Revenue Service (IRS) and are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund which make up the Social Security Trust Funds.
The word “insurance” occurs seven times in the above.
“Insurance” against living your older days in poverty.
I refer you to Fleming v Nestor (1960) in which the SCOTUS held that the deportee, although he had paid into SS for the required time period, had NO RIGHTS to collect. That decision made it clear that SS was not an “annuity” or “insurance” program in the traditional sense, but was liable to be altered by Congress.
From the decision:
2. A person covered by the Social Security Act has not such a right in old-age benefit payments as would make every defeasance of “accrued” interests violative of the Due Process Clause of the Fifth Amendment. Pp. 608–611. (a) The noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. Pp. 608–610. (b) To engraft upon the Social Security System a concept of “accrued property rights” would deprive it of the flexibility and [363 U.S. 603, 604] boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act. Pp. 610–611. 3
Unlike an insurance program, our rights can be terminated, increased or decreased by Congress.
As noted, Fleming v Nestor recognized that benefits may be denied or changed by law, which doesn’t suggest to me that SS isn’t an insurance program.
A fact checklist on Social Security:
Click to access SSW-Book-Fact-Sheet.pdf
Thank you Maureen.
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