Saturday, December 10, 2016

Social Security reform

"Social Security has been a quiet subject for Republicans since the collapse of President Bush’s reform efforts in 2005. In the late 1990s and early 2000s, Republican Members of Congress were seemingly lining up to present new plans to fix Social Security’s long-term funding shortfall, currently estimated at over $11 trillion. Since Bush’s plan failed to pass even a Republican-led Congress, however, many in the GOP have left the field to progressives who seek to expand Social Security benefits, even at the cost of the program’s solvency.
Today, however, Rep. Sam Johnson (R-TX), the chairman of the House Social Security subcommittee, has introduced a Social Security plan that would address solvency concerns while also taking steps to make the program work better for participants. It’s a complex plan, so it might be easiest to explain by breaking it down into its functional components.
Solvency: While there’s more to Social Security reform than simply keeping the system from going broke, a program that can’t pay what it promises isn’t much good to people. To address the solvency side of the problem Johnson’s plan takes a number of steps. First, the plan would gradually increase the normal retirement age, reaching 69 for people born in 1968, who will retire in the mid-2030s. Second, the plan alters the basic Social Security benefit formula in such a way that benefits are progressively and gradually reduced for roughly the top half of retirees.  Third, the plan would base Cost of Living Adjustments on the so-called “chain-weighted CPI.” On top of this, high income retirees – singles with retirement incomes above $85,000 and couples above $170,000 – would not receive a COLA. Fourth, the plan would limit the size of spousal benefits for higher-income retirees. Currently, the non-working spouse of a high-earning retiree can receive a higher monthly benefit than a low-income person who worked and contributed to the program all their life. Together, these changes would be sufficient to make Social Security solvent for 75 years and beyond..."

29 comments:

AprilApple said...
This comment has been removed by the author.
AprilApple said...

We must do the opposite of whatever that hack Paul Krugman wants.

deborah said...

I don't know from SS reform> I"ve heard some insist there is no problem with insolvency< etc> As really unfair as it is, is means testing a 'workable' idea?

Rabel said...

Commenter Rabel will be getting his first SS check in February. Cheese, Baby!! Government cheese for me, me, me!!!

You youngsters out there keep up the good work.

edutcher said...

The system has been running hand to mouth for years and will not have enough children to pay for the upkeep.

Problem is, the Demos have always demagogued any attempt to keep all this from happening, as it has always been their cash cow.

I know Trump wants nothing to do with it. (actually, the Rs ought to just let it collapse so the Demos can take the blame, as with IdiotCare)

deborah said...

I don't know from SS reform> I"ve heard some insist there is no problem with insolvency< etc> As really unfair as it is, is means testing a 'workable' idea?

If you're making 1 mil a year, you don't need a few bucks from the Feds. This is a reasonable reform.

Getting it past the Lefties is the issue. Of course, there aren't as many Greedy Geezers as there used to be and the problems are much better known now.

As for solvency, does the system going broke in '34 scare any body?

deborah said...

Congrats, Rabel-baby, what fun!

deborah said...

I've always sensed that means testing was more fair, but the argument people should get what they've paid in is powerful. On the other hand, I feel bankrupt cities are justified in decreasing union retirement payouts and bennies, as they were accrued through the graft of union bosses and politicians working hand in hand to buy the votes of union workers.

ricpic said...

It takes courage to propose something the Democrats will demagogue to death. Do the Republicans have enough votes to pass this thing on a party line vote? Cause that's the only way it's going to make it to Trump's desk. I guarantee not a single Dem will vote for Social Security reform, in the full knowledge insolvency is almost upon us.

Rabel said...

If anyone is interested in a deeper understanding of the problems Ed mentions above, and has the time, I recommend reading (studying) the overview (about 15 pages) in the 2015 Trustees report. It's understandable if you make the effort. Things will become clearer if you then compare that to the 2016 report, although that second step may not be necessary.

The short version, strictly to give you an idea of what "going broke" means, is that if projections on the GDP hold true and no changes are made to the SS plan then in 2034 either SS benefits will be reduced by 23% or the current 12.4% payroll tax will have to be increased to 18%.

Reading through those two reports certainly clarified the issue for me, but I've got a lot of free time.

deborah said...

Whew...so it is overblown.

Rabel said...

It's a real problem, but it's fixable. Especially if we get an early start. Putting more people into above-the-table, wage paying jobs would also greatly mitigate the difficulty. I hear that there's some guy working on that.

bagoh20 said...

It should be returned to the insurance model originally designed. In insurance, you don't get your money back unless the insured problem develops. That problem is not simply arriving at a old age. It's arriving at an age and condition where you can't support yourself. I don't expect to need my benefits, and people like me should not get them. That plus the reforms of moving up the age should be able to return it to solvency if done soon. The solvency and expense problems of all our benefits programs really come down to simply being too generous and letting people at the trough who don't really need it. It's just a fact of human nature that if you put out a buffet for the hungry without rules, a lot of fat people will show up and eat all the food.

edutcher said...

deborah said...

I've always sensed that means testing was more fair, but the argument people should get what they've paid in is powerful. On the other hand, I feel bankrupt cities are justified in decreasing union retirement payouts and bennies, as they were accrued through the graft of union bosses and politicians working hand in hand to buy the votes of union workers.

You've got a lot of people barely scraping by (partly because they were the grasshoppers (see Aesop)) while people pulling down millions get a couple thou a month from the Feds.

You have to understand, though, that Social Security was always a scam; it's a second income tax without the exemptions and deductions.

Initially, it was only for people who worked outside the home (almost exclusively men). Life expectancy for the average male (remember, everybody smoked and antibiotics didn't come into general use until a couple of years after V-J Day) was 62 and retirement age was 65.

Cute, huh?

Rabel said...

"moving up the age"

I hope you'll check back in with us when you hit 65 or so.

bagoh20 said...

At 65, the checks will go into my bank account virtually unnoticed. That's why I wish they went to people who need it instead. If I do get to 65, in another 40 years, and if I can't support myself, I hope some rich fucks aren't sucking up all the money. People who don't need their SS should be able to give it back to the SS fund and have that considered a tax deductible charitable donation.

Rabel said...

I admire your confidence, but bad things happen to good people all the time. Often to those who least expect it.

deborah said...

Rabel at 208: I mean that it's fixable relatively easily.

Rhythm and Balls said...

Republicans aren't happy unless they take bread from the mouth of a homeless person, and find a way to turn it into a gun to fire at someone here or abroad. More violence less compassion, they seem to say. Sounds like a wonderful prescription for a society of sociopaths, which is what they seem to want America to be. Except when it actually turns out that way.

Rhythm and Balls said...

Means testing SSI is fine. But for lord's sake don't just ram it through under a partisan low-voting turnout one-party power play or without any equivalent cuts to the bloated military budget that does no one any good but the globalists. Give the people a chance to actually have a say on it. Send it out by referendum or plebiscite rather than a regime with record low credibility that got in after unprecedented low turn-out and voter suppression tactics.

edutcher said...

Ritmo needs to get out of the gated community into the real world.

If Social Security crashes when all the Baby Boomers hit it, nobody gets nothin'.

Of course, Ritmo is just spouting the Democrat line.

Rhythm and Balls said...

Ritmo needs to get out of the gated community into the real world.

You keep saying this as if it means something - like everything you say.

Does your "real world" include the circles of Exxon-Mobil's Rex Tillerson? Is that the "ungated community" leader you follow that I'm supposed to get in touch with?

Right wing assholes are proven to be low information bubble dwellers. Shown time and time again. You watch FOX News, you're more likely to be uninformed and misinformed than any other consumer.

But ed is so against "gated communities" that he needs his superiors at Rupert Murdock's gated community to tell him what to think and what to believe.

I'd make fun of ed for refusing to "open that gate" and see what goes on in the real world. But like a scaredy cat, he likes his information spoon-fed to him in the bite-sized pieces that crank his fear complex just enough to constantly flinch, if not to jump.

Enjoy your bubble, ed!

Rhythm and Balls said...

The guy who swallows every stray tweet by a guy whose sole priority is to "build a wall" talks about "gated communities." Hilarious. That's rich.

Again, defund the military by the amount needed to offset the 20% funding deficit that hits it in 2034. Either that, or means-test, but not without plebiscite.

"Real world" = a world where Republicans win without depressing/suppressing the vote or running against the least popular Democrat since LBJ, if that. But hey, at least Republicans won the popular vote, didn't they? Their ideas must be well supported by the people! Just poll them on what they want to do, and all these "real world" open society types that edwina feels are the backbone of the Republican party (or the rust belt Reagan Democrats who tilted WI-MI-OH-PA to King Orange Oil-Haired Narcissist), and they will AGREE to EVERYTHING edwina wants to force down their throats.

It's why Republicans love to get out the vote. They're very pro-democracy.

edutcher said...

Thank you, Rit, for whatever it was you said.

Too bad you couldn't address my point.

Rhythm and Balls said...

As usual, you didn't have a point. So nothing to address.

But I did address, SSI, its funding, and how America didn't suddenly become everything that your lover Trump ran against. And how someone who supposedly hates "gated communities" wants to turn this country into one.

It's good to know that you can't read anything longer than seven words long. The future does not belong to the low information voter. Well, maybe a shitty future. But not a future worth claiming any pride in.

edutcher said...

SSI is not Social Security, but what does that have to do with anything.

As always, Rit brings nothing to the mix.

AJ Lynch said...


The current payroll tax of 12.4% should be sufficient to provide a reasonable social security payment to those of us who actually worked for 40 years or so.

The problem is the Beltway cocksuckers spent the money instead of investing it for us. I say no more- partially privatize it for those under 35 years old or so and pay those who are older what they have been promised. If we oldsters accept reforms, we are letting the Beltway cocksuckers off the hook.

rcocean said...

You people are idiots. You seem to think the problem with SS is that "Rich People" are getting SS and that's causing the deficit between dollars in and dollars out.

Its not. There aren't that many rich people getting SS, and they don't get that much more than the average person. The problem is the boomers are retiring and old people are living longer. Its the number of people - most of whom need their SS check - that are driving out the cost.

So, we don't need to "means test" which won't solve the problem. What we need to do, is take off the Payroll cap. Currently, someone who makes 500,000 pays the same SS tax as someone who makes 120K. Get rid of the Cap and SS will be solvent for the next 40 years.

Trooper York said...

You just don't get it. Donald Trump will protect Social Security. If Paul Ryan or some other Republican so called "conservative" wants to self immolate by attacking Social Security then Trump will tweet his sorry ass into oblivion.

AJ Lynch said...

Sure Rcocean = let's give even more of our money to the fed govt so they can piss it away ans then tell us its going broke again in 20-30 years.