My mother used to tell us she was saving her money so she didn't have to take SS. It was a status symbol for many in her generation.

That even rich peoplemay need this someday, as even they can go broke. We should remove the cap on it, but also make it clear this is there for them, just as it is for any citizen.

I agree. If they paid into the system and want it they should be able to get it just like anyone else that paid in.

It is "Social" Security; not "Personal" Security.

worthy of serious debate...

goodbye.

social security has been means-tested since reagan, who made ss income taxable.

which is more means-testing than needed.

When rich people make money from investments (and financial BS I don't understand) do they pay into SS from that income?
I seriously don't know.

Sure.

Trying NOT to take Social Security (she was loaded).

And she came from a branch of the family (including mine) that came from a place where they were still pissed at losing the Civil War. But she also knew what was fair.

Partially becuase if you grant exception, they'll just try harder to take it away from everyone else, too.

What you said.

Exemptions are the ultimate slippery slope. Deny compensation for one group and you make it easier to deny it for others.

No.

Everybody gets it or nobody gets it.

Yes, if we were not in the financial situation we're in, but this is one of the several ways we can work to address the problems. Another: remove the income cap on SS contributions.

Foolish for people to become hysterical about possibility that some SS changes might be 'on the table,' imo.

what is the cap? After $110k per year, you no longer have SS tax taken out of your pay. DH is an engineer with a private firm (he's been there 25 years) and he hits that around August each year. After that, his paycheck amount goes up until January 1, when the new year starts.

I'm an engineer in the public sector so I don't ever hit that cap.

Dh will get the max benefit. I will get a smaller amount, although there are ways (as a lower earning spouse) to maximize my SS benefit based on his benefit.

I wish the cap could be raised, even slightly, without a corresponding uptick, or at least a slightly declining uptick.

When I was a city firefighter (professional), we had our own pension plan and did not have to pay into social security.

In certain states, teachers don't get SS.

I work at the state level. We get a defined pension and SS. I save through a 457b plan too.

We either use reason or we all go down the tubes.

but no one who's 'hysterical'.

i've seen a lot of people trying to shut down discussion, though.

The minute you exclude wealthy people from the program, it becomes easy to portray as a welfare program. Part of its popularity is the fact that everyone pays in (to varying extents ) and everyone in theory will be able to get some of that investment back. IMO means testing ss or medicare, while it sounds tempting, is a HUGE mistake.

Means testing is just a way of easing in on making it welfare and not an investment.

That's how it was set up and that's how it should stay.

If they need more revenue to keep it solvent, let them raise the cap and/or start cashing in some of those 30 years of T bills that represent overpayments by Boomers.

Insurance shouldn't be means tested. Would you like it if somebody totaled your car and the insurance company told you to get it fixed because you could afford it?

Really?

Once you make beyond a certain income you start getting docked until you make too much in income to get any. This is why the vindictive and greedy in the 1% want to kill off Social Security.

I'm not sure to what magic number, but raise it. And get Americans back to work (not shitty PT jobs with no benefits), thereby contributing to SS. Cut the military budget and stop the fucking wars.

Job creation & wage growth means more FICA, according to the 2012 SS Trustees report in the low cost scenario SS is good thru 2090:


Table IV.B3.—Trust Fund Ratios, Calendar Years 2012-90

The Trustees estimate that the trust fund will not be exhausted within the projection period.

http://www.ssa.gov/OACT/tr/2012/IV_B_LRest.html#219007

talk about "tweaking," or offering up cuts to Social Security during debt talks. Something tells me we're in for a ROYAL sequestration screwing.

Your "job creation & wage growth means more FICA" equals my "and get Americans back to work (not shitty PT jobs with no benefits), thereby contributing to SS." The FICA tax should be restored to 6.2 percent.

And, again, raise the cap.

(Sorry, didn't read your link -- it's waaaay too late in the day to deal with a .gov...)

Heres an excerpt from the low cost scenario.....

abolished or greatly limited? It's because everyone pays into SS and everyone gets a benefit that is tied to their contributions. People think of SS more as a retirement savings vehicle than as a welfare program. You start means-testing SS, it becomes perceived as a welfare scheme, and see how quickly it will be destroyed.

FYI

Fix the damn economy, invest in US jobs.....

Job creation & wage growth means more FICA, according to the 2012 SS Trustees report in the low cost scenario SS is good thru 2090:


Table IV.B3.—Trust Fund Ratios, Calendar Years 2012-90

The Trustees estimate that the trust fund will not be exhausted within the projection period.

http://www.ssa.gov/OACT/tr/2012/IV_B_LRest.html#219007

they will get their propaganda machine to start criticizing it as "welfare for people who were too lazy to save money when they were working." They already do that to some extent.

Some of the European countries found this out early. Entitlements have to be for everyone, or the rich will bitch, sometimes hard enough to endanger the people who need the money.

Once full benefits age is reached, though, everyone is entitled to get back what they paid in (or at least start to get back what they paid in; some will get more, some will get less). I, personally, think that's fair. SS is a type of retirement plan, which every participant ultimately gets back, whether he needs it or not. Like any other retirement plan. It can be argued that the employer's tax was factored into the participant's wages/salary. It would be like a union pension plan denying benefits to participants if they had another source of income after retirement, or wouldn't get ins. if they signed up for Medicare. The pension plan is a right of payment that was factored into their wages during their working years.

If you change that, it's no longer a retirement plan. It really does become an entitlement program for the less advantaged. It would be much easier for Congress to privatize it at that point, IMO, since a lot of people would support it.

I mean, rich people have off shore investments, or tax free investments and more. no?
I'm a bricklayer, not dumb, but not schooled in this shit.

That's why there is a discussion of raising the cap.

I have tax free investments. One is called a Roth IRA, and the other is called a 401k. I'm a mid-level avg paid working woman. Far from rich.

My bosses are probably what anyone would call rich. They get paid salaries (they also get other $, like profit sharing, bonuses, etc.), out of which are paid SS taxes.

SS taxes are a business expense. So to that extent, it is considered as an expense of a worker, when deciding on giving raises, etc.

income.

all those things are irrelevant to the discussion.

and exist entirely on investments don't have any social security payments coming to them.

don't receive.

"Before the age of full benefits, SS is income means tested."

That is incorrect.

An agreement is an agreement.

Given that both parties are keen to grab the $2.6 trillion (and growing) Trust Fund for their wealthy patrons, Social Security will be gone once we start fucking with it. We need to totally leave it alone until we again have responsible people in government.

Social Security has no financial problems. The projections that show it being in trouble in 25 years are based on assuming that our current depression never gets better - the projections have been cooked to cause a fully-fake crisis. If the economy goes back to anything near where it's been since 1933, Social Security will easily pay every cent that's been promised.

Can you explain the $2.6 T Trust Fund? I know, google, but I'm on a dial up from hell and come here for my info.
This Trust Fund was mentioned up post and I haven't heard of it.

Particularly since the early 1980s, workers have paid more into Social Security than retirees have taken out in benefits. The surplus, currently at $2.6 trillion, is in the SS Trust Fund. By law, all of the Trust fund must be lent the the federal government. So $2.6 trillion of the US debt is owed to Social Security, and will be needed to pay back workers in full once they retire. The money will be paid back to the Trust Fund as it's needed to pay benefits.

The Bush tax cuts on the top 5% of taxpayers, plus the cost of the two recent wars, about equals $2.6 trillion. So that's what the Trust Fund was borrowed for. And if we reduce spending on benefits, then there won't be any need to pay it back and we can keep taxes low on the "job creators". That's what's going on, as far as I can tell.

borrowed by the federal government in exchange for government bonds. That's what the money in the Trust Fund is, the value of those bonds + interest. The bonds are redeemed by the SS Admin on a regular schedule.

Before Reagan, the TF typically held about one year's payout or less. Under Carter, the TF got very low -- mainly because of the Carter recession and stagflation.

So there was a 'fix' under Reagan. But rather than just increasing SS taxes enough to fix the problem, Congress (following the recommendations of the Greenspan commission) increased SS taxes to build up *a lot* of extra money in the TF -- way beyond what was needed to pay beneficiaries and maintain a one-year cushion in the TF.

It was five year's payout in the TF last time I did the calculations. Unprecedented. The rationale for this was that the boomers would 'prefund' their own retirement.

But here we are, the boomers are retiring, and we're told SS is in crisis.

This is why any cuts to scheduled benefits would in fact be *theft* from all the workers who paid that extra money during the 30 years from 1983 to the present -- roughly 1% of all wages for 30 years, plus interest. If you made $20K, that would be $6000 plus 30 years of interest.

Meanwhile, the rich got tax cuts and the extra SS payments of the working class helped pay for the budget.

So when rich people say 47% don't pay income taxes, I have to laugh. *Everyone* who's worked over the last 30 years has been paying income taxes -- they just didn't know it.

myself being single I have a good portion of my employers pension and SS confiscated from me.

"Don't wanna pay so much taxes? Don't make so much money."

Hard to feel sorry for someone collecting so much in pension that taxes are owed.

You know?

the highest marginal tax bracket of 35%. The reason is once you get above a certain income $25000 for a single in retirement not only is that additional income taxed but it also subjects your SS to tax. I don't have any problem with paying tax on my pension but then being taxed on my SS is not right it effectively puts my tax bracket higher than Bill Gates. RR started that tax on SS 30 years ago and the baseline has never been adjusted for inflation. The baseline back in the 80s was $25000 with inflation that would be over $59000 today. I will have you know I belonged to a Union and we fought hard for a pension, we went on strike for 100 days one time and 10 1/2 months and the issue was our pension. You think union members should be penalized because through collective beginning we have a pension?

If you base payments on the last tax return or financial holdings from years gone by, many would be disenfranchised in case of setbacks or disasters.

And we ALL know how fortunes can change, in ANY economy.

At the upper level they have to recognize 50% of their benefit as taxable income so it is taxed at the highest rate.

The reason you can be taxed on the other half is because the employer has used that contribution to the SSI and Medicare as a business deduction.

So the most anyone would have to pay tax on would be 50% of you benefit.

I believe we live in an egalitarian state and that means that those who put in should get back.

Social security is not considered welfare because we pay into it. It was considered a fund or investment. Today we live longer and tend to draw money out beyond our original contribution. In that sense, it does become welfare, wrapped in the dignified guise of an earned entitlement. I have no problem with that for those who rely on S.S. income, but for the wealthy it is an abuse that we all continue to pay them long beyond their original S.S. contributions. The wealthy become welfare recipients, receiving money taken from middle and low income pay checks, and the amounts are negligible to them (i.e., they do not rely on them to survive... most likely would not even miss them). I think that once a taxpayer's original investment has been disbursed to them, their continuing receipt of S.S. should be means tested -- only those who truly NEED the payments should get more than they pay in. Such a change should not be distasteful to them, as they would be getting their money back, anyway.

generation paying for the retirement of the one before it. each generation, on average, got more than it put in because the economy expanded -- that doesn't make it welfare. and we don't continue paying for "the wealthy" long beyond their original contributions, because 'the wealthy' don't get any more than 'the middle class'. the payout is capped. currently the highest payout is about $2500 for a worker retiring at age 67 this year -- and 65% of SS is subject to taxation if you have additional income over limits:

if you file a federal tax return as an "individual" and your combined income* is:

- between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.

- more than $34,000, up to 85 percent of your benefits may be taxable.

if you file a joint return, and you and your spouse have a combined income* that is

- between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits

- more than $44,000, up to 85 percent of your benefits may be taxable.

http://www.ssa.gov/planners/taxes.htm

your scheme would be complicated & expensive to administer & would destroy support for SS. it's a dumb idea. SS is *already* means tested (more than it should be, in my opinion, and thank you bill clinton for increasing SS taxation, you stand in the big right-wing shoes of ronald reagan).

taxes.

That is, rich people get Social Security, but they don't get to keep much of their money as long as they have high incomes. It's a good way to do it.

to just pull the cap.

The highest earners have attained practically ALL of the extra-lifespan that is supposedly over-burdening the system.

So just pull the cap, the system is solvent, the equities are balanced and move on to medicare (I have some easy fixes there too!).

majority of the program for everyone else.

it would also mean a huge surplus, i.e. more money in the SS trust fund used to fund the general budget = more income tax cuts for the rich.

In any event, the current "shortfall" is being caused by high earners living longer than projected and can be fixed by high earners making up the shortfall that they are causing.

Meanwhile, low earners are dying just as originally predicted, or very nearly so, so their contributions are at the correct level.

why would they support SS if they pay more than half the cost and get less than 10% of the benefit?

85% of social security income is subject to taxes if you make over $34K (single) or $44K (household).

the original design of SS, which set the cap at 90% and made SS untaxable income, was sound -- financially and politically.

every step away from the original design has been a step toward destruction of the program.

To the extent there is a Social Security shortfall issue . . .

It has been caused by lifespans extending beyond expectations.

Nearly all of the lifespan extension has come at the higher levels of income.

Where social security contributions are not collected.

Therefore: we should collect the "shortfall" from those people, or at least the class of people, who are pulling the money out on the back end.

So perhaps instead of "eliminate the cap" I should say adjust the cap.

into SS projections long ago, & they're pretty much on target. the media talk up the 'increased lifespan' angle, but it's really that significant.

As Table 1 indicates, the average life expectancy at age 65 (i.e., the number of years a person could be expected to receive unreduced Social Security retirement benefits) has increased a modest 5 years (on average) since 1940. So, for example, men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940.

(Increases in life expectancy are a factor in the long-range financing of Social Security; but other factors, such as the sheer size of the "baby boom" generation, and the relative proportion of workers to beneficiaries, are larger determinants of Social Security's future financial condition.)

http://www.ssa.gov/history/lifeexpect.html

Most of that increased 5 years has already been factored into both taxation & payout schedules, including the increase in the full retirement age. the projected shortfall comes more from the recession and extending current low-growth and low-wage expectations out 75 years.

the projections change every year, and they change according to the current economic environment & what numbers the trustees decide to plug into their forecasts. it's not hard science.

also, your idea about the cap seems confused. high-income workers pay *plenty* of social security. they just don't pay it on income over the cap. for example, a workers who makes $200K in wages will pay $7150 in SS taxes -- on wage income up to $110K. Plus another $7150K kicked in by his employer = $14.3K.

He just won't pay on the remaining $90K.

I never argued that high income workers did not pay into SS. Only that, given their generally longer life expectancies as compared to lower income workers, they were not paying enough.

If SS is in trouble (and I do not concede the if), then there are only 3 possible fixes:

1) Increase SS taxes, either generally or on a specific sub-group;

2) Reduce benefits; or

3) Reduce the period for which benefits are paid (i.e., raise the retirement age).

The latter two are unpalatable to me (in fact, I believe that benefit levels should be raised), so again, if the SS trust fund is underfunded, then to me raising contributions is the only viable solution.

though, has basically opened up only during the last 10 years. I don't see any reason to revamp the funding of SS because of a ten-year trend which may or may not play out further and is (IMO) just a symptom of the increasing concentration of wealth. I think it's wiser to address that trend at the source because it affects *everything*, not just social security.

With regard to changes in the structure of SS:

First, I don't accept the standard meme that SS is in 'crisis'. This is after learning how the reports and projections are done, who does them, what the political considerations have been and are, reading years of the trustees' reports back to the 90s, and seeing how the projections change year to year and what factors the projections are based on and how arbitrary they are in some cases.

Second, I don't accept that something needs to be done *now* even if the projections come in exactly on target. Last I checked the SS TF was supposed to be emptied in 2033, twenty years from now, when the youngest boomer will be 73. And lots of things can happen between now & then.

Third, even if the projections come in exactly on target and the TF is empty in 2033, SS would still be able to pay out 75% of scheduled benefits, which would be (inflation-adjusted) higher than today's benefits. The 'fixes' they're talking about would be *worse* than that.

Fourth, the banksters want the money, & all the fixes they're talking about are things that would undermine support for the program. Lifting the cap completely would mean the upper-middle class (who already pay a higher percent of their income in combined SS and income taxes than the super-rich) would get a huge tax increase.

Since they're the class who doesn't actually *need* SS to survive & since they're the class who gets most of their benefits taxed (85% & probably at around 20% turning the maximum $30K benefit into $24K), why would they support doubling or tripling their SS taxes for the relatively small retirement benefit?

$24K -- but their SS taxes will go from $7K a year on $200K to 13K a year, on $300K to about $20K? And this class would be paying for 50% or more of the program?

That = declining support for SS in this, the most politically active economic class. And you can bet the folks who want to destroy the program would make lots of political hay with that.

Social security's strength is its broad base of support. Anything that undermines that (& reagan and clinton already made large inroads on it) is unpalatable to me.

The cap has traditionally been set to cover 90% of all wage income. The additional 6.5% of that 10% would be a small gain for a big political loss.

have ulterior motives.

I am just saying that if anything is done to the program, it should involve raising collections from a class that currently hits the cap rather than cutting benefit levels (already too low) or raising the age (as a professional white male this would not affect me personally, but I can see where the construction worker or auto mechanic might have a different POV).

The thing to really keep our eye on is whether they ultimately go for something like default on USGOV debt, a fair portion of which is held by the SS Trust Fund.

This would amount to a massive tax hike on the middle and lower classes to pay for tax cuts to the wealthy and various adventurous wars in Latin America and the Middle East.

And again, default is totally unnecessary when nothing the fed does seems capable of producing across the board inflation. Meanwhile, the fed holds the power to print all the money it wants.

got us thinking there's 'crisis,' that means we've agreed that something must be done and they can sell us any of their crappy fixes, all of which make things worse.

I belong to the do-nothing party. We've got ten years to see how things play out. Unless the plan is to keep the US in permanent recession (not beyond the realm of possibility), I doubt things will go according to projections.

IF we see widespread job growth, moderate workforce growth and wage growth at CPI % then we can continue to keep our hands off SS.

GDP growth of about 2.8% or better driven by job creation and wage growth will do a lot to increase FICA.

I'm sure your familiar with the Trustees low cost scenario........


according to the 2012 SS Trustees report in the low cost scenario SS is good thru 2090:


Table IV.B3.—Trust Fund Ratios, Calendar Years 2012-90

The Trustees estimate that the trust fund will not be exhausted within the projection period.

http://www.ssa.gov/OACT/tr/2012/IV_B_LRest.html#219007

i'm familiar with it.

it's almost like it's the real forecast.

Since the Boomers will all be dead by then (thats me). In the 2012 low cost scenario assets get very low around 2060-2062, IIRC only about 6 months worth of assets.

But assuming the Boomers live to a 100, that may be a bit conservative, it may be that 99% of the Boomers are gone by 2052. IF so we could see assets climb after that.

A pleasure HiPointDem.

You need to find a total of .6%

http://2.bp.blogspot.com/_fjW71B3WLTQ/TC3Bs2undtI/AAAAAAAAAYI/PQiTSfBitWo/s1600/CBO-SS+options+Fig+1.jpg

according to the 2012 SS Trustees report in the low cost scenario SS is good thru 2090:


Table IV.B3.—Trust Fund Ratios, Calendar Years 2012-90

The Trustees estimate that the trust fund will not be exhausted within the projection period.

http://www.ssa.gov/OACT/tr/2012/IV_B_LRest.html#219007

To paraphrase FDR

If we take nothing from capital we owe nothing to capital.

Stagnant wages/income disparity, slowing of workforce growth and the slow GDP growth of the last 4 years, all rate of more significance than increasing lifespans.

Take workforce growth. In the highcost scenario which says SS is broke by 2029, the trustees assume .2% growth in the workforce. Currently its about .95%. Most other estimates put workforce growth at .5% .7%, BLS, CBO CEA etc all use higher estimates.

But yet an Actuary has a legal responsibility to provide a conservative projection, and so they have.

Fix the economy and you fix SS. 20 million new jobs means a lot of FICA.

Since the federal government has the federal reserve, there is no need for taxation.

The fed can just print money for whatever programs are desired and to whatever extent they are desired.

They are in fact now printing money for some programs.

The fact that we have tax at all . . . this is a bit of a mystery to me, but it looks like a wealth transfer. And not from the rich to the poor.

I would be happy to be enlightened.

through the banksters any time soon, i'll be fine with that.

meanwhile, we live in the realm of the possible.

it may be possible to stop the raids on ss & medicare.

greenback money, not so much.

The cap right now is about $110K. If they bypassed $110K to $250K an then taxed income over $250K the Social Security trust fund would be self sustaining for at least 75 years (the farthest the CBO does projections) and only about 1% of wage earners would be affected. Each year the cap is adjusted for inflation, so the untaxed "window" would get smaller each year. In 25 to 30 years, the untaxed window would disappear and all wages would be taxed. Of course the rich would gripe, but since the top 1% get much of their income from investments, they are already getting a break by paying the capital gains rate. If they get rid of the cap, it will affect just a few percent. If they cut benefits, it affects everyone.

administration's own analysis says that even completely lifting the cap would cover only 50% of the projected actuarial deficit over the 75-year window.

http://www.ssa.gov/policy/docs/policybriefs/pb2009-01.html

Just a hint: projecting funding into this 75-year actuarial window is somewhat akin to pre-funding post office retirements, which is why there's a huge surplus in the TF.

and according to the social security administration itself, neither lifting the cap entirely nor lifting it in increments would fix the actuarial balance in the 75-year window, and only lifting the cap entirely would fix the balance when calculated into 'infinity'.

the percent of workers affected, per the ss admin, would be about 23% at some time during their lives; 1.8% of workers would be affected for 30+ years. top 25% would see tax hikes.




as the untaxed window gets smaller, 100% of wage income becomes taxable. all the criticisms i listed apply to the plan except that it's not such a sudden huge tax hit.

Nevertheless, it means the upper middle classes will be paying *way* more in taxes than 'the rich'. and they won't like it.

'the rich' however, will like it, because their plan is to eventually get workers to pay *all* the taxes, for everything.

#2) Each year the cap is adjusted for inflation, this is not true. 2011 was the first time in 3 years the cap was adjusted

http://www.ssa.gov/OACT/COLA/cbb.html

In 1983 the SS income cap was at 90%, today it is at 84%......

And the 1935 law says so, infact the 1935 law says entitled 9 times, lets go count how many times it says insurance....

why not? Ayn Rand received S.S along with medicare, as did Paul Ryan.

If you are rich, aren't you already "socially secure"?

Otherwise, it will be viewed as another form of welfare -- as opposed to something people are entitled to because they paid into it for decades -- and support for it will drop considerably.

The solution isn't to cut rich people off -- it's to raise or eliminate the cap on income that's taxable for social security.

he takes it -- then gives it to charity.

paying into it. A lot of rich people don't sign up for it though because they know they don't need it. It should be voluntary though.

after $110,100 you do not pay in. Remove that limit and everything will work out great

wealthy and don't need it it would be nice if they turned it down but it's their choice .... they're "ENTITLED to it".

social comes from the word, society. security implies safety and welfare without fear.

therefore, social security should be a commitment of a society to help those that are less fortunate, in their waning years, in hopes they will not have to worry about safety and welfare.

for the rich to greedily take all that they contributed into the social security fund, and more, when they don't need a penny, is the height of selfishness.

the "alleged" social security financial shortage could be easily solved by removing the cap on earnings that are taxed for that purpose. it would be price the rich pay to help those that are worse off.

add to that the means test, and we are good for a long, long time.

if i were to be in the higher income/asset bracket, i would gladly help others without expecting anything back, myself.

but americans have turned ugly again. and the greedy rich are the ugliest of us all.

but that is just my opinion of the whole issue....

That's just fucking bullshit.

Means testing sounds good, but it seems to me a slippery slope.

Define "rich people."

Define the cutoff.

How many people can we estimate who will be cut off? How much will that save?

I wonder how much a month a millionaire makes in SS per month? Anyone know?

Remove the cap and it won't be a problem.

the more progressive the income tax schedule is, the less of a concern this issue is.