Posted on 07/22/2019 3:53:32 AM PDT by george76
Bernie Sanders .. wants to expand Social Security, even as the program will pass an omnious tipping point.
Some time next year, as the ranks of retirees swell, the Social Security system in the United States will pass an ominous tipping point and start the slide into insolvency.
For the first time in nearly four decades, the government program that provides retirement checks to older Americans will pay out more in benefits in 2020 than it takes in. That will force the program to dip into a rainy day fund that will be depleted in about 15 years.
And if the political dysfunction in Washington continues and lawmakers don’t fix the system, benefit cuts are in store for current and future retirees, most of whom haven’t socked away enough money in their personal retirement accounts.
...
most Americans are seriously unprepared for retirement, particularly the boomer generation.
...
Yet despite years of warnings from policy wonks and financial professionals, the looming crisis in Social Security has lacked urgency and barely enters the public debate. The funding shortfall, which policy makers have seen coming for years, didn’t merit a mention in the Democratic presidential debates in June.
...
While the issue has drawn little attention in the presidential campaign, most of the Democratic candidates have called for not only stabilizing the Social Security program but increasing benefits, offering varying degrees of detail on how to pay for it. Massachusetts Senator Elizabeth Warren and Vermont Senator Bernie Sanders are part of an “Expand Social Security Caucus,” and both would finance the cost of additional benefits, in part, by increasing taxes
(Excerpt) Read more at bostonglobe.com ...
I remember that. And Nancy Pelosi made it her life’s work to derail his plans even though it would have benefited young people who could have been putting a small percentage of their earnings into a stock plan or other savings plan. I think it was small like under 5%. But the Rats can’t let anyone get out of the traps they’ve set. It was a noble effort on George’s part. One of the few domestic decisions that he put forth that would have worked on behalf of the American people.
“By the way as near as I can tell medicad/medicare is set up the same way but worse.”
No, thanks to democraps like ‘the bent one’ it’s even worse.
Trying to make sure all private insurance dies, ‘the bent one’ made it a requirement that if you take social security, you MUST go on medicare as well.
My wife and I both work, We receive great health insurance (private) through her plan. When she retires, she can keep it at only a little more than all the part B,C,D,Z etc of Medicare. So we fully intended to stay on it.
We put off Social Security till we were both 70. Since I’ve paid into it since I was 14, it seemed like I should get some of it back. Lo and behold, you CANNOT sigh up for social security without also signing up for Medicare.
Here is a program that is also going broke, two people that want to pay for their own insurance, and the Government saying, NOPE, you must help the system go broke faster so we can have an excuse to get rid of all private insurance.
Gosh I hate liberals.
Same with pensions. Can’t work long term
That’s because having a household employee doesn’t make you a business.
Business payroll tax comes off the top for the Feds. Some states charge a gross receipts tax though that’d include that.
It was not welfare until they started means testing benefits, that left no doubt as to whose money it was. Federal Insurance Contribution Act. Key word here being Contribution.
“...I don’t think they consider it to be welfare ...”
It doesn’t matter what they considerate to be. Social security is a form of income redistribution. I guess you can call that “welfare”. When they were working their income was “re-distributed “ to the then current retirees. Now that they’re retired they are getting income from the current workers. If there was a high ratio of working vs retired a “social security surplus” would build up. Congress of course would find ways to draw against it.
Again its a Ponzi Scheme ! You can see that that’s true by looking at the SSA’s own web site with the data of “working vs beneficiaries from 1940 to 2013”. Don’t believe me look!
https://www.ssa.gov/history/ratios.html
Other strains on the system, please note its all based on mortality rates of the 1930s! People were never supposed to live long enough to collect their benefits. Modern medicine has changed all that. However rather then change the system (put it on a sound financial basis!) Congress (Rats mostly!) demagogued it every time there was a serious discussion to do something to really fix it! You know political commercials showing grandma eating cat food! FDR and his band of geniuses were warned by the financial/insurance industry this would happen. They didn’t care they would be dead by the time it all came a cropper but that got the votes they needed from the rubes for what 80 years!
A lot of people love to shout ‘I paid into it, its mine!’ No it isn’t! You have no property rights into what you paid into social security. There have been several federal & USSC cases that say that. If you had property rights your SS money/payments would be part of your estate. Its not!
“...
It has long been law that
there is no legal right to Social Security. In two
important cases, Helvering v. Davis and
Flemming v. Nestor, the U.S. Supreme Court
ruled that Social Security taxes are simply taxes
and convey no property or contractual rights to
Social Security benefits.
.....................”
https://object.cato.org/sites/cato.org/files/pubs/pdf/ssp19.pdf
I think the SS system was what Roberts based the reasoning of his Obamacare ruling on! I can see similarities!
Lyndon Johnson moved SS into the General funds years ago, so they could rob it from the beginning. The money is moved and replaced with Government IOUs, simple as that.
Social Security is supported by taxes on the wages of working, middle-class Americans. Yet there’s always talk of insolvency.
But there’s never talk of insolvency in welfare programs like SNAP, Medicaid, Sec. 8 housing, etc...
Why is that?
While benefits are increased almost annually thru COLAs, the revenue has grown more slowly. The payroll tax (OASDI) of 6.2% for employee and employer (12.4%) has stayed at that rate since 1990. Additional revenue has come from the almost annual raising of the wage cap. In 2000 the cap was at $76,200. Today, it is $132,900.
SS is more than a promise. The benefits are backed by the full faith and credit of the USG. However, by law, benefits cannot exceed revenue. When that happens, benefits must be reduced. If nothing is done to fix the system, benefits would be reduced by about 20%.
80% of wage earners pay more in payroll taxes than they do in income taxes. If you want to become more informed about SS, I suggest you read the Trustees annual report, SSA Trustee Report for 2019
Many churches are busy taking care of illegals than the American people who are homeless or disabled.
Not true. FAQs on SSTF
“...The problem with SS is actuarial. The number of SS recipients is increasing rapidly while the number of workers supporting the system is growing more slowly ....”
Yes its a Ponzi Scheme. Ponzi Schemes are great investments as long as there are plenty of people paying in vs those receiving.
And that is an actuarial problem!
“SS is more then a promise”
that’s all it is! A promise a future Congress can renege on! Because you own nothing! Its not yours ! You have no property rights in it. Its a tax just like any other tax!
“......
It has long been law that
there is no legal right to Social Security. In two
important cases, Helvering v. Davis and
Flemming v. Nestor, the U.S. Supreme Court
ruled that Social Security taxes are simply taxes
and convey no property or contractual rights to
Social Security benefits.
................................”
https://object.cato.org/sites/cato.org/files/pubs/pdf/ssp19.pdf
1. Identify those who should not be receiving benefits and phase them out over a four year time frame, cutting 25% per year until they are OFF of the system. This gives them plenty of time to find other ways to finance their lives. The real intended recipients who are what you will have left will receive their full benefits until they die, including minor cost of living adjustments.
2. Offer a Entomb buyout to those who are within ten years of retiring. Those who take the buyout will NEVER receive social security benefits. They will be immune to having to pay social security taxes as will anyone who employs them. Their employer thus gets an experienced, trustworthy elderly worker who comes at a 15% discount in cost! This buyout must be enough money to entice about half of the intended target so as to lessen the future burden of social security. How much? Let's say some will take the offer at $60,000. Borrowing this amount to have them off the rolls pays for itself in three years time plus it forever removes the burden of paying them after that.
3. For those who are ten to twenty five years away from retirement, they will receive whatever reduced rate benefits the government comes up with. They are stuck, BUT they have notice and will receive substantial help from the government in growing their own separate retirement plans with new legislation designed to do so.
4. For those over 25 years from retirement, they will NOT be eligible to receive benefits BUT they have the freedom to build their own retirement nest egg which is much better. In addition, as recipients die off, their social security taxation rates will diminish each year. They also have the joy of knowing that their children will never again be prisoners to this government ponzi scheme.
Should read One Time, not entomb!
***Some time next year, as the ranks of retirees swell, the Social Security system in the United States will pass an ominous tipping point and start the slide into insolvency.***
But, but we were promised! Isn’t a government promise worth anything?
Self-Supporting
“The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future—without any subsidy from the general funds of the Government.
“Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.”
https://www.ssa.gov/history/ssa/usa1964-2.html
From the 2019 Trustee's report:
Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2035. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust Fund reserves are projected to become depleted in 2034, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund asset reserves are projected to become depleted in 2052, at which time continuing income to the DI Trust Fund would be sufficient to pay 91 percent of DI scheduled benefits.
Lawmakers have a broad continuum of policy options that would close or reduce Social Security's long-term financing shortfall. Cost estimates for many such policy options are available at www.ssa.gov/OACT/solvency/provisions/.
The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security will play a critical role in the lives of 64 million beneficiaries and 178 million covered workers and their families during 2019. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.
FWIW, and I know FDR is not well-liked here on FR, but his original 1936 speech on SS listed four forms of funding retirement,, of which he said one was “private annuities,” meaning people should fund their own retirements in part.
He then added that it was hoped in the future “private annuities” would take over all of the retirement planning, i.e., that HE thought that before long private retirement accounts would make SS unneeded.
Tax the Billion$$ being sent back to Mexico and southward, and pour the proceeds into Social Security. None of these millions of illegals pay any taxes. This would be a means of getting SOMETHING out of their being here, enjoying our society.
You have more faith in its “fix ability” then I do!
I think any “fix” is just a “patch” to get us past the “crisis”, get it off the news and reduce the heat on the politicians. The next time the “fix” will be harder, more painful and more statist! Its a flawed foundation and it will eventually collapse.
April 22, 2019
Washington – Today the Social Security and Medicare Boards of Trustees issued their annual financial review of the programs.
The projections indicate that income is sufficient to pay full scheduled benefits until 2026 for Medicare’s Hospital Insurance program, 2034 for Social Security’s Old Age and Survivors Insurance program, and until 2052 for Social Security’s Disability Insurance program. The Supplementary Medical Insurance (SMI) Trust Fund remains adequately financed throughout the projection period, but only because SMI has unlimited access to general revenues.
The Trustees project that Medicare costs will grow from approximately 3.7 percent of GDP in 2018 to 5.9 percent of GDP by 2038, and will increase gradually thereafter to about 6.5 percent of GDP by 2093. The costs of the Social Security program equaled 4.9 percent of GDP in 2018 and are expected to rise to 5.9 percent of GDP by 2039, decline to 5.8 percent of GDP by 2052, and then rise slowly to 6.0 percent of GDP by 2093.
Social Security
The Social Security program consists of the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund. The Trustees project that the hypothetical combined Trust Funds will be depleted in 2035. The 75-year actuarial deficit for the combined trust funds is estimated at 2.78 percent of taxable payroll, down from 2.84 percent of taxable payroll estimated in last year’s Report. This reflects a 0.05 percentage point worsening due to extending the projection period and valuation date one year that was more than offset by a 0.11 percentage point improvement due to new data, changed assumptions, and improved projection methods.
The financial outlook for the separate DI trust fund has substantially improved. The DI depletion date is now 2052, 20 later than projected last year, and the DI actuarial balance is -0.12 percent of taxable payroll, 0.09 percentage points larger (less negative and more favorable) than last year. These changes are largely due to continuing favorable experience for DI applications and benefit awards. The 20-year extension to the life of the DI Trust fund is large relative to the 0.09 percentage point improvement in the DI 75-year actuarial balance. This is because in last year’s Report DI income was projected to be very near to DI cost for many years after the projected 2032 depletion date, so that a relatively small improvement in the program’s projected cash flow has large implications for the projected depletion date.
Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for the first time since 1982, and to remain higher throughout the projection period.
Medicare
Medicare has two Trust Funds: the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund. The Trustees project that the HI Trust Fund will pay full scheduled benefits until 2026, the same year projected in last year’s Report. After the HI trust fund is depleted in 2026, the share of scheduled benefits that can be paid from dedicated revenues is 89 percent for the remainder of 2026, declines slowly to 77 percent in 2046, and then rises gradually to 83 percent in 2093. The 75-year actuarial deficit in the HI Trust Fund is projected at 0.91 percent of taxable payroll, up from 0.82 percent projected in last year’s Report. Several factors contributed to the change in the actuarial deficit, most notably lower assumed productivity growth (+0.10 percent of taxable payroll), slower projected growth in the utilization of skilled nursing facility services (-0.10 percent), higher costs and lower income in 2018 than expected (+0.04 percent), lower real discount rates (+0.03 percent), and other factors.
The SMI Trust Fund, which includes Medicare Part B and Medicare Part D, remains adequately financed into the future due to financing being derived from general revenues and beneficiary premiums. The aging population and rising health care costs cause SMI projected costs to grow steadily from 2.1 percent of GDP in 2018 to approximately 3.7 percent of GDP in 2038, and to then increase more slowly to 4.2 percent of GDP by 2093. About three-quarters of these costs will be financed from general revenues, and the remaining will be financed from premiums paid by beneficiaries.
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