Social Security--Fix it or scrap it?
83Signing the Social Security Act of 1935
Depression Breadline
Ford Hunger March
Dorthea Lange Depression Photo
Walter Reuther on Labor Day in Cadillac Square
World's Largest Container Ship
Social Security Needed Now More than Ever
The debate on changing Social Security from its original social insurance concept to one of individual savings and investment has focused on the numbers and how best to assure that funding is sufficient for future benefits.
Equally important is a recognition and understanding of the conditions that led to the adoption of Social Security in 1935 and recognition that workers today still face great insecurities as globalization and trade change the face of American industry. Examining the forces that gave rise to Social Security provides perspective to the debate over our country's needs today.
During the early 20th century, the United States evolved quickly from an agrarian and small-business economy in which people lived independently on farms and in small towns, to an urban society in which workers in industrial centers such as Detroit found themselves dependent for their livelihood on the state of the economy, on the viability of their industry and employer, and on their own good health.
Detroit's population grew from 285,000 in 1900 to 1.6 million in 1935 as workers flocked from farms in the South and Midwest to work for big wages on Ford's assembly lines, but, far from their farms and relatives, they faced new insecurities.
For example, after attracting thousands of workers to Detroit, Henry Ford shut down his Rouge plant for six months in 1927 to change from the Model T to the Model A and had massive layoffs again in 1931, dumping 60,000 workers onto the relief rolls without income to sustain them, far from their farms where they could have grown their own food.
New Deal measures such as the Wagner Act, Social Security, unemployment and workers' compensation provided security in the event of layoff, injury on the job and arbitrary firing and when, as Walter Reuther put it they were "too old to work and too young to die."
Also forgotten in this debate on Social Security is the role played by New Deal programs in the preservation of the free enterprise system.
When Franklin D. Roosevelt was inaugurated, unemployment in the United States was 30 percent, and many people were embracing socialism or communism as a model for our country. On March 7, 1930, John Schmies, Communist Party candidate for mayor of Detroit, led a Ford hunger march from Detroit to Dearborn. After the Wagner Act was passed assuring the right to organize unions and bargain collectively and the steel, auto, electrical and rubber industries were quickly unionized, union leaders such as Walter Reuther cleaned the communists out of the labor movement and proceeded pragmatically to address the needs of union members.
The result was the construction of a remarkable edifice by employers and union leaders through free collective bargaining that included paid holidays and vacations, health care and pensions, highly-paid jobs and a private system of industrial jurisprudence that provided due process in the workplace. These measures provided answers to universal questions such as: What happens to my family if I'm injured or get sick and can't work? When I'm too old to work? And what protection do I have if I'm fired arbitrarily?
Now, thanks to global competition, the foundation of our industrial edifice is cracking. Detroit's population has fallen from 1.6 million in 1935 to 899,000 today, and the city's finances are in dire straits. Less than 10 percent of the private workforce in the United States is unionized. Manufacturing jobs are scarce. More and more Americans get low-wage jobs with few benefits through temp agencies. Car industry pensions are underfunded, as is the federal Pension Benefit Guaranty Corporation, and health care benefits aren't funded at all but paid out-of-pocket only so long as the companies are able.
In the golden '50s and '60s, retirement security was viewed by the companies and the UAW as based on a three-legged stool: Social Security; a non-contributory pension plan (plus lifetime health benefits); and personal savings.
With our industry under global siege, defined benefit pensions underfunded and disappearing, and personal savings declining, now is not the time to weaken the Social Security leg of the retirement stool by subjecting it to the risks of private securitites markets operated by investment bankers and for-profit mutual funds where serious conflicts of interest have been revealed in the past couple of years.
Private savings and investment accounts, IN ADDITION to Social Security and employer pensions and increasing the national savings rate are important. But nothing in Bush's privatization plan would do this. Greater participation in 401(K) plans and IRAs by low income workers should be encouraged bo offering immediate eligibility and automatic enrollment with better tax incentives for participation.
President George W. Bush's proposed "reform" of social Security springs from longstanding haters of FDR and the New Deal and from hopes of enhancing the appeal of the GOP to young voters. The libertarian CATO Institute has been waging a public relations campaign effort to gut Social Security for several years. The Bush administration proposals failed to recognize that Social Security, as originally conceived, has served us well and is as needed now as it was in 1935. A few minor adjustments are all that's needed to put Social Security on a sound financial footing for the forseeable future.
[This article was adapted from one that appeared as an op-ed by Ralph Deeds in the Detroit Free Press February 23, 2005]
How Social Security Taxes Are Invested
- Trust Fund FAQs
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the US Treasury.
4-23-12Social Security's Financial Health Worsens
- Financial Outlook Dims for Social Security - NYTimes.com
The Obama administration reported a significant deterioration in the financial outlook for Social Security, and that the financial condition of Medicare was stable but still unsustainable.
4-24-12WallStreetJournal--Stress Rises on Social Security and Medicare
- Social Security, Medicare's Outlook Worsens - WSJ.com
Social Security and Medicare continued to deteriorate, with the programs' trustees projecting the combined Social Security retirement and disability programs will exhaust their trust fund three years sooner than thought.
NY Times 12-16-11 Disagreement Over Payroll Tax Cut's Effect on Social Security
- Disagreement Over Payroll Tax Cut’s Impact on Social Security - NYTimes.com
Critics predict one extension will lead to another as politicians balk at raising taxes to their former level, especially if unemployment remains high. The chief actuary for the Social Security Administration say the proposal will do no such thing.
1-10-11HuffingtonPost--Zero Hour for Social Security
- Zero Hour for Social Security by Robert Kuttner
Pres. Obama seems on the verge of needlessly cutting America's most valued social program and the one that best differentiates Republicans from Dems. It's a vain effort to appease deficit hawks in his own party and on Wall Street,and Republicans who.
4-5-11NYTimes Op-Ed--"To Cut the Deficit, Look to Social Security"
- To Cut the Deficit, Look to Social Security - NYTimes.com
Solving Social Securitys problems would reassure Americans about their retirements and improve the countrys creditworthiness.
11-20-10 Letters to the NYTimes on Social Security Reform Proposals
- Letters to the NYT on Social Security Reform Proposals
Its time to scrap the cap, that is, to require contributions on all earnings above $106,800. Doing so would fully address the projected shortfall for 75 years. And it would provide a few extra dollars to improve benefits. Eric Kingson, Syracuse Univ
Letter to the NYTimes from Eric Kingson, Professor, Syracuse University
I disagree with Peter Orszag’s assertion that the co-chairmen of the deficit-reduction commission have handed the White House “a highly progressive reform plan for Social Security” (“Safer Social Security,” column, Nov. 15). At least, not unless you really believe these notions:
¶Annual cost of living adjustments, which do not fully reflect the rising cost of health care, are too generous.
¶Future retirement benefits for low- and moderate-income people under the age of 50 should be reduced because the life expectancies of the better off are increasing at a greater rate than theirs.
¶Retirement, disability and survivors protections should be cut by as much as 36 percent for young people entering the work force today.
Americans should not be stampeded into cutting increasingly critical Social Security protections. It’s time to ask those who have reaped the benefits of runaway tax cuts and growing income inequality to pay their fair share, not cut Social Security.
It’s time to “scrap the cap,” that is, to require contributions on all earnings above $106,800. Doing so would fully address the projected shortfall for 75 years. And it would provide a few extra dollars to improve benefits.
Eric Kingson
Manlius, N.Y., Nov. 15, 2010
The writer, a professor of social work at Syracuse University and co-director of Social Security Works, was adviser to the 1982 National Commission on Social Security Reform and to the 1994 Bipartisan Commission on Entitlement and Tax Reform.
3-4-99Detroit News " How the Great Depression Changed Detroit" (and the nation)
- detnews.com | Michigan History
On March 7, the Ford Hunger March from Detroit was organized by John Schmies, communist candidate for mayor of Detroit, and led by Albert Goetz. Three thousand marched from Detroit to Dearborn asking for union recognition, full employment (Ford had h
11-15-10NYTimes--Peter Orzag on Fixing Social Security
- Orzag Critiques Debt Panel Recommendations on Social Security
Social Security isn't the key fiscal issie facing the nation. Payments to beneficiaries are 5 percent of the economy now; by 2050, theyre projected to rise to 6 percent. In the same period, federal health care costs will increase six times as much.
11-10-10NYTimes--Bi-Partisan Deficit Panel Draft Recommendations
The plan would reduce projected Social Security benefits to most retirees in later decades — low-income people would get higher benefits — and slowly raise the retirement age for full benefits to 69 from 67, with a “hardship exemption” for people who physically cannot work past 62. And it would subject higher levels of income to payroll taxes, to ensure Social Security’s solvency for the next 75 years.
But the plan would not count any savings from Social Security toward meeting the overall deficit-reduction goal set by Mr. Obama, reflecting the chairmen’s sensitivity to liberal critics who have complained that Social Security should be fixed only for its own sake, not to balance the nation’s books.
http://www.nytimes.com/2010/11/11/us/politics/11fiscal.html?hp
11-9-10 WashingtonPost-- Bipartisan Deficit Panel Recommend Cuts in Spending, Cuts in Social Security and Medicare and Elimination of Tax Breaks
- Deficit Panel Recommends Cuts in Social Security and Medicare
The retirement age is set to hit 67 under current law; the Erskine-Simpson plan would raise it to 68 in 2050 and to 69 by 2075. The early retirement age - the age at which recipients can first claim benefits - would hold steady at 62...
11-5-10NYTimes--"Is Social Security Really a Pension?"
- Is Social Security Really a Pension? Floyd Norris
SS isn't a pension plan, though it resembles one because the benefit level is related to the recipients income while working. It's a plan to to tax working Americans to pay benefits to retired and disabled workers and their families.
8-10-10NYTimes Editorial--The Latest on Medicare and Social Security
- Medicare and Social Security
Social Security is holding up in a weak economy. The date of insolvency for Medicares hospital fund was pushed back, from 2017 to 2029, because of cost-saving measures in health reform. SS, un-changed, will be able to pay full benefits until 2037.
8-6-10NYTimes--Medicare Stronger, Social Security Worse in Short Run
- Short run outlook for Medicare funding better than Social Security according to report by trustees
Medicare will remain financially solvent for 12 additional years, until 2029, because of the cost-cutting measures in President Obamas recently enacted health care legislation, the programs trustees projected on Thursday.
8-6-10NYTimes--"Attacking Social Security" by Paul Krugman
- Conservative Debt Hawks are Attacking Social Security
S.S.s attackers claim theyre concerned about the programs financial future. But their math doesnt add up, and their hostility isnt about $ & c. Its about ideology and posturing. And underneath is indifference to the life realities of Americans.
7-31-10NYTimes--Social Security Jitters? Prepare Now.
- Social Security Adjustments Needed
Options include increasing Social Security payroll taxes, subjecting more income to the tax, reducing initial benefit payments or cutting cost-of-living increases (which would affect current retirees) and increasing the retirement age.
2-23-09 Obama Finds Resistance in His Own Party on Addressing Social Security Jackie Calmes in the NY Times
- Democrats Resist Social Security Benefit Cuts
Obama is facing resistance from liberals in his own party to Social Security "help" from Lindsay Graham e.g. benefit reductions for future retirees.
Presidential Candidates Need to Take a Position on Social Security and Medicare
- Social Security & Medicare Issues in 2008 Election
This is a link to a video from the National Committee to Preserve Social Security and Medicare with the message that presidential candidates should tell us their plans for preserving Social Security and Medicare.
401k Plan Regulations Need Reform
The current recession 2008-09 has decimated the 401K savings of many if not most Americans. This may present an opportunity to make needed changes in 401k regulations. Changes are needed because the plans are not performing their intended function--participation is not as high as it should be; the costs of many plans is too high; and participants too often must choose among a bewildering array of investment options including the stock of their own employer. Savings have been invested inappropriately for retirement accounts, and the results have been abysmal for many if not most participants.
Last month John Bogle, inventor of the no-load, low cost, tax efficient index mutual fund and founder of the VanguardGroup, which is the not-for-profit, investor-owned, second largest mutual fund group in the world, recommended to Congress a number of improvements in the regulations governing 401k plans. Unsurprisingly, Bogle recommended automatic enrollment and limiting investments to broad stock and bond index funds. A link to Bogle's testimony is provided below. [John Bogle has been called "The Warren Buffett of mutual funds." He has devoted his life to reforming the mutual fund industry.]
Statement of John T. Bogle Before the Education and Labor Committee, U.S. House of Representatives Feb. 24, 2009
- STRENGTHENING WORKER RETIREMENT SECURITY
Bogle recommends automatic enrollment in 401k plans and limiting investments to approved broad bond and equity index mutual funds.
Social Security Facts
- Social Security Facts
"Social Security Facts." By James D. Agresti and Stephen F. Cardone. Just Facts, January 27, 2011. Revised 4/2/11. http://justfacts.com/socialsecurity.asp NOTE: This research contains comprehensive details about Social Security.
11-6-11NYTimes--Rick Perry's Risky Social Security Proposal
- Many See Risk in Rick Perry’s Plan for Social Security - NYTimes.com
Gov. Rick Perry’s risky plan to let state and local wokers opt out of Social Security runs counter to recommendations from bipartisan debt reduction commissions.
Don't BeTricked!
McCain Supports Privatization of Social Security
CNN/Fortune--Privatizing Social Security is Still a Dumb Idea!
- Privatizing Social Security: Still a dumb idea - Fortune Finance
Why is privatizing Social Security such a turkey? Because retirees shouldn't have to depend on the market's vagaries for survival money. More than half of married couples over 65 and 72% of singles get more than half their income from Social Security
How the Great Depression Changed Detroit
Is Social Security Broke?
A Stalwart of Retirement Planning: the IRA by J. Alex Tarquinion in the NYTimes 4-27-07
Alex Tarquinio points out that the Individual Retirement Accountor IRA is often overlooked in retirement planning. More than 90 percent of IRA money comes in the form of roll-overs from 401k plans. Only 14 percent of American households that were eligible to make direct IRA contributions did so in 2006....Fifty-seven percent of "prime working-age Americans," had no retirement plan at work. Contributing to an IRA makes senses for such people.
Read Tarquinio's excellent article here;
That Looks Too Risky!
9-3-09 NYTimes Reluctance to Retire Due to Declining 401k Balances
- Increasing Reliance on 401k Plans May be Accentuating Economic Cycles
“One unappreciated side effect of the 401(k) system is that it’s a sort of reverse automatic stabilizer,” says Teresa Ghilarducci, an economics professor at the New School.
Veteran of 1930s Detroit Labor Wars
- Detroit Labor Wars
96 year old Dave Moore tells of his experiences in the Ford "hunger march" and the turbulent Detroit auto industry in the 1930s.
Who Needs Retirement, Anyway Phyllis Korkki in the NYTimes 4-19-09
- Who Needs Retirement, Anyway?
"I will not retire while I've still got my legs and my makeup box,"said Bette Davis. "Retirement is the ugliest word in the English language,"said Ernest Hemingway. "Sooner or later I'm going to die," said Margaret Mead,"But I'm not going to retire."
"Looting Social Security, Part 2, William Greider in "The Nation" 1-4-10
- Pete Peterson says: "Scrap it!"
He's baaack--the Wall Street billionaire who wants to loot Social Security. This time, Pete Peterson has invented his own "news network" to promote his right-wing rants about shrinking the only retirement security system available to millions of work
Looting Social Security, Part 1, William Greider in "The Nation" 1-9-09
- Looting Social Security, Part 1
Governing elites DC and Wall St have a fiendishly clever "grand bargain" they want Obama to embrace in the name of "fiscal responsibility." The government, they argue, can recover the billions spent bailing out the banks by looting Social Security.
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Thanks for your comment, Chuck. Some day we'll have to get together for a beer in Tucson. I have a brother and a sister who live there.
I see two things playing out with younger people. First, few of us count on social security and second, I believe we are more frugal as a generation than baby boomers. Our generation will have to save more and spend less to live in retirement.
I have little faith in the government to return the funds we invested in our retirment years. I also see the huge draw down that's coming as our parents retire and the workforce shrinking as something that was not considered when social security was designed to have the current workforce pay for the previous.
I'm not up to speed on the borrowing against social security. Are we setting our selves up to have outstanding loans with depleted equity until there is nothing less to secure the loans? Or is it more of a concern that the money goes to something else and then it won't be available to people when it comes time to collect?
You're on. Give me a call whenever you plan to come. It would be great to meet you and have a beer. The next few months are the best time of the year for visiting Tucson as the weather is great - sunny and a balmy 70+ temperature.
Social Security needs only minor tweaks to assure that you will receive benefits, Paul. The public has been misled by concerted PR campaigns by CATO, the Heritage Foundation and similar groups who would like to do away with Social Security and Medicare. Fortunately, they are out of step with the majority of Americans.
Medicare is the program that will soon run out of money, not Social Security.
haha I like that last editorial
The GOP has been fighting to end Social Security since the day Roosevelt put pen to paper. The Reagan plan, picked up by King George, has been to put the country in such a huge deficit that they could then claim the U.S. will go broke if it doesn't kill all of what's left of Roosevelt's programs, especially Social Security. Their plan to privatize Social Security (and just about everything else) is just another facet of that plan. To privatize Social Security is to end it! There's plenty of money to fund Social Security well into the next century, provided we don't start World War III before Bush leaves office. With the help of the right wingers, big business has all but killed unions in this country (first by moving plants down South and now by sending jobs to Asia, Africa and the MidEast. Keep up the good work Ralph.
Paul Krugman aggrees in his op-ed 11-16, "Played for a Sucker."
Iin Wisconsin there is a public employee retirement plan that is similar to what President Bush proposed. Employees own the fund and it is controlled by an elected board. the State oversees the fund, but unlike SS the state can not take or borrow money from the fund. Over the years I have contributed to both the State Retirement Plan and SS. I am now drawing more money and was able to retire early (age 57) than I will draw from SS at age 65. This system is a good comprimise because you have to contribute, there are death benifits for your named survivor, and you have the option of taking a lump sum if you leave the system.
That sounds like a good system, in addition to, but not as a replacement for Social Security. I too am retired and drawing from a private pension fund which pays me double my Social Security benefits. I would not be able to live comfortably without BOTH Social Security and my defined benefit pension. Moreover, I saved in addition in my employer's 401k plan. In my experience all three plans are needed to provide for an un-reduced standard of living in retirement.
The best solution is to preserve Social Security and provide additional incentives for participation in 401k savings and investment plans to replace defined benefit pension plans which most employers are dropping.
I wonder what the the Wisconsin state fund invests in? I hope they haven't invested in subprime mortgage-backed securities. Many state investment funds have been hurt by these unfortunate investments peddled by big Wall Street banks.
Enjoyed this hub....worthwhile reading. The real budget monster is the cost of medicine in this country....it is the issue that is most important to address rationally. Unfortunately most of the politicians running for President and pussy-footing around at best. The only truth speaker with an honest plan is Dennis Kucinich. SINGLE-PAYER: get rid of private insurance, and employer based plans. This is the answer most civilized nations of the world have come to.
great hub, great comments. :)
Enjoyed the Hub
Tom
3bg3cvemr6574
Enjoyed the Hub
Tom
Tnx for the comment.
That's a nice idea...........
Couldn't agree with you more. BTW, the American Association of Future Retirees is dedicated to exactly what you are trying to do: save Social Security, and don't "reform" it out of existence. (FYI, I'm the Executive Director.) I'd like to invite you to become a member; it doesn't cost anything & we need people like you who not only think as we do but are articulate about getting the word out. Please check us out at http://www.aafr.org . I'd appreciate your feedback about our site, it's fairly new.
Good site. I signed up although I'm not sure I'm eligible. I'm already retired!
Yes, you're eligible & are already enrolled as a member! There are no age requirements... all that matters is that you support our goals of preserving Social Security and other important programs for future generations. Even if you're a "current retiree," you can be a "future retiree" at heart (which most are if they have kids & grandkids).
Excellent article Ralph. For the past ten years I've been watching my wages and benefits decline. I was hired in to a multinational insurance corporation in 2001 which was the last year they offered pension benefits. Everyone hired after 2001 had to rely on a 401K.
I stayed long enough to be vested so supposedly I will get a small benefit whenever I decide to start drawing on it, but it wouldn't shock me if they find a way to get rid of that too the way things are going.
My 401K lost 33% of its value last year and when the bank went down I took a distribution becaus I needed it. The job I found in November offers no pensions, no health insurance, no benefits except a 401k packed with mutual funds that are all currently losing large amounts of money--plus, they constantly require work off the clock, which is technically illegal at an hourly wage job. I've started joking that maybe they could find some volunteers to do the work, and they answer me as if it's a serious suggestion because they really are that shameless.
I'm 55. I'll be happy if I'm not a greeter at WalMart when I'm 80--if I make it to 80. Privatizing social security is a shameful greedy grab by the uber-rich for the few cents 99% of us have left. I don't know why more people aren't more whipped up right now about it. I spend half of every day arguing with people who think the UAW single-handedly destroyed the American economy. It's very depressing.
Out of curiousity, what percentage of tax do you pay in the States? I ask because I gather that many Americans equate Social security and Universal Healthcare with high taxation, and I don't believe that to necessarily be the case.
Employees and employers each pay 7.65% Social Security tax on the earnings up to $109,000 for a total of just over 15%. In addition single income tax payers pay 10%--35% depending on income, deductions etc. Also, they pay state sales and property taxes which vary from state to state.
Here employees pay 22% on any amount earned between £2231 - £34600 pa, and 40% on anything higher than that. In addition they pay 11% National Insurance contributions on any amount over £5,460 pa. For this we Brits have Universal Healthcare, a basic (but quite low) pension from age 65, and Social Security benefits (known as a job-seekers allowance) for if we are made unemployed. We also have non-contributory public education until age 18, but this is partly funded by local authorities , to whom we pay local taxes (usually between £100 and £200 per property on average)
There's a lot to be taken into consideration, but do you think we pay a huge amount more?
Amanda- Ok all that is little confusing. Can you tell me if some one earns like $6000 per month which is roughly 4000 pounds (without any contribution to personal investments like 401k) after taxes how much would be a person's take home salary.
CW - £4000 per month would be quite a generous salary here, as an average salary is somewhere between £1800 and £2500 depending on your location and profession. On £4000 per month you might expect to take home very roughly £2600. That may not sound like much if you're used to lower taxation, but I imagine you or your employer would be paying a generous whack to health insurance?
Hey Deeds a topic you can relate too. You must be an expert on it having one foot in the grave yourself. But too bad you had to probably copy and paste the whole thing.
I wrote the article. It was originally published as an Op-ed in the Detroit Free Press. If you disagree with it why don't you explain why?
Ralph,
Well written HUB. My problem with social security is this, you can never draw out what you pay in. Its simply not possible. It's caused more problems than its solved. For example you mentioned the forming of Unions. No one could argue that the unions haven't played a role in the demise of Detroit. Just another example of good intentions and the road to hell...
C.J., Thanks for your comment.
We are all lucky that Bush was not able to turn Social Security money over to Wall Street! Incentives for investing more in 401k plans should be increased, on top of Social Security, not in place of Social Security. This will be especially important for people who are not covered by traditional defined benefit pension plans which are rapidly disappearing from the scene.
Some people draw out more from Social Security than they pay in, some less. Some none. Some die or become disabled before retirement age and Social Security payments help support their families. That's the way insurance works. The UAW was not known for self restraint in pressing it's demands. But two parties signed every contract--the union and the management. In the past several years the UAW has agreed to some huge cutbacks in wages and benefits, too late to save very many jobs. The big increases in wages and benefits came for the most part when the companies didn't have a lot of competition and were quite profitable.
Ralph,
Can't argue with you on the Bush thing. No doubt what would have happened to all that money if it would have been moved over to 401K's. It would have been flushed with the rest of the market. Don't get me wrong, I'm not saying that 401K is the answer to Social Security. I'm just not going to be for any social program thats compulsary. You point out something that I don't think a lot of people understand. Social Security is INSURANCE, not a retirement investment. You pay into it, its compulsary and you only get it(some of it) if you meet the criteria and prove need. Do you believe that the average Joe would agree to that, if explained that way?
The Unions have created a lot more problems than the obvious(auto industry) They have created third party hires, temp and contract agencies(indirectly) so employers can avoid a Union from forming. Its a disaster. UAW really hurt the image of all Unions. I personally don't believe they have any real purpose anymore, other than to line the pockets of the Union management. How do you get Michigan back to work now? Will they work for less money? There are a lot of tough questions and no easy answers.
Tnx for your comment.
One little correction: After age 62 you don't have to "prove need" in order to collect Social Security benefits. Benefits are reduced if you start collecting before the normal (65+) retirement age. The only time you have to prove need is if you are filing for a Social Security Disability benefit. For that benefit you have to provide medical evidence that you are unable to work.
I spent 34 years negotiating with the UAW and could say a lot on the subject, but I don't feel like going into a long discussions of the pros and cons here at this time.
34 years!?? You must be exausted! Sounds like a lot of work and worry.
Well, I went through a few all nighters and a lot of weekends every three years. Actually it was quite interesting.
Looting Social Security, Part 2, William Greider in The Nation
'
He's baaack--the Wall Street billionaire who wants to loot Social Security. This time, Pete Peterson has invented his own "news network" to promote his right-wing rants about shrinking the only retirement security system available to millions of working people. Peterson styles himself as a patriot saving the nation from fiscal insolvency and has committed $1 billion to that cause (a chunk of the wealth he accumulated at Blackstone Group, the notorious corporate-takeover firm). His efforts might be dismissed as ludicrous--except money does talk in Washington, and Peterson is now buying Washington reporters to spread his dire warnings.
Excellent read-how can more people be taking out now than putting in ?
I guess that may be true because the population is aging, and the formula needs to be tweaked a bit to keep it on a sound footing--raising the age for a normal benefit, raising the maximum income subject to Social Security tax, dampening the cost of living adjustment formula or a combination of the above possible "fixes." This is not a big deal. The big deal is dealing with projected increases in the cost of Medicare. This is a serious problem with no magic bullet solution.
thought I would give you a heads up on this Hubber. genius and only 7 fans. go figure.
NYTimes--7-31-10
Social Security, which has its own dedicated stream of income, is projected to pay out more this year than it is taking in, but that is a function of the weak economy. Social Security will, according to the last annual report from its trustees, be able to pay full benefits through 2037. Then, if there are no changes in the program in the meantime, the taxes collected will be enough to pay out only about 75 percent of benefits through 2083.
So while Social Security’s finances are stable in the short term, most experts agree that the program needs to be bolstered for the long term. Among the proposals circulating is one from Representative John Boehner of Ohio, the House Republican leader, who recently suggested raising the retirement age to 70 for people at least 20 years from retirement.
Other options include increasing Social Security payroll taxes, subjecting more income to the tax, reducing initial benefit payments or cutting cost-of-living increases (which would affect current retirees).
8-6-10 NYTIMES
Medicare will remain financially solvent for 12 additional years, until 2029, because of the cost-cutting measures in President Obama’s recently enacted health care legislation, the program’s trustees projected on Thursday.
NYTimes Editorial 8-10-10
Here’s the bottom line: The recently passed health care reform bill is promising to have a positive effect on Medicare, assuming Republican opponents don’t succeed in killing the reform in court or otherwise undermining its main provisions. Social Security is holding up even in the face of a weak economy. According to the reports, the date of insolvency for Medicare’s hospital fund was pushed back, from 2017 to 2029, because of cost-saving measures in health reform. As for Social Security, without any changes, it will be able to pay full benefits until 2037 and partial benefits after that, the same estimate as in last year’s report, despite temporary setbacks from the recession.
Of course, neither program is sound for the long run. But the reports show there is time for lawmakers to reform and strengthen both of the programs for the long haul. The real question is whether they will rise to the challenge or continue to view these vital programs as battlegrounds for scoring partisan points.
Is Social Security Really a Pension Plan?--Floyd Norris
But the reality is that Social Security is not a normal pension plan, even though it somewhat resembles one because the benefit level is related to the recipient’s income while he or she was working. It is what it was when it was created in the Great Depression: a plan to tax working Americans to pay for benefits given to retired and disabled workers, and to their families.
More here:
Here's a summary of the debt commission's 11-10-10 proposal wrt Social Security changes:
The plan would reduce cost-of-living increases for all federal programs, including Social Security. It would reduce projected Social Security benefits to most retirees in later decades, though low-income people would get higher benefits. The retirement age for full benefits would be slowly raised to 69 from 67 by 2075, with a “hardship exemption” for people who physically cannot work past 62. And higher levels of income would be subject to payroll taxes.
But the plan would not count Social Security savings toward the overall deficit-reduction goal that Mr. Obama set for fiscal year 2015, reflecting the chairmen’s sensitivity to liberal critics who have complained that Social Security should be fixed only for its own sake, not to help balance the nation’s books.
Safer Social Security--Peter Orzag in the NYTimes
Social Security is not the key fiscal problem facing the nation. Payments to its beneficiaries amount to 5 percent of the economy now; by 2050, they’re projected to rise to about 6 percent. Over the same period, federal health care costs will increase six times as much.
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Nevertheless, Social Security does face an actuarial deficit. Current projections suggest that, after 2037, benefits would need to be reduced by more than 20 percent to match revenue. Measured over the next 75 years, the deficit in Social Security is expected to amount to 0.7 percent of the economy — not a huge amount, but a deficit nonetheless.
Letter to NYTimes Re: Social Security Reform Proposal by Peter Orzag, former Obama budget czar:
I disagree with Peter Orszag’s assertion that the co-chairmen of the deficit-reduction commission have handed the White House “a highly progressive reform plan for Social Security” (“Safer Social Security,” column, Nov. 15). At least, not unless you really believe these notions:
¶Annual cost of living adjustments, which do not fully reflect the rising cost of health care, are too generous.
¶Future retirement benefits for low- and moderate-income people under the age of 50 should be reduced because the life expectancies of the better off are increasing at a greater rate than theirs.
¶Retirement, disability and survivors protections should be cut by as much as 36 percent for young people entering the work force today.
Americans should not be stampeded into cutting increasingly critical Social Security protections. It’s time to ask those who have reaped the benefits of runaway tax cuts and growing income inequality to pay their fair share, not cut Social Security.
It’s time to “scrap the cap,” that is, to require contributions on all earnings above $106,800. Doing so would fully address the projected shortfall for 75 years. And it would provide a few extra dollars to improve benefits.
Eric Kingson
Manlius, N.Y., Nov. 15, 2010
The writer, a professor of social work at Syracuse University and co-director of Social Security Works, was adviser to the 1982 National Commission on Social Security Reform and to the 1994 Bipartisan Commission on Entitlement and Tax Reform.
Restoring balance to Social Security would also make Americans feel more secure about their retirement. Surveys have repeatedly shown that many Americans do not believe that Social Security will be there for them. While such an assessment is wrong — even without any changes, Social Security payroll taxes could pay 100 percent of benefits for the next 25 years, and 75 percent to 80 percent of benefits for decades thereafter — anxiety about the program’s future leads people to grab benefits as soon as they can. The problem is that benefits claimed at the early retirement age, 62, are 25 percent smaller than at the full retirement age (currently 66) and are likely to be inadequate when retirees have exhausted their other sources of income later in life. Eliminating the Social Security shortfall will, therefore, reduce the misplaced fear that causes Americans to claim benefits early.
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Disagreement Over Effect of Payroll Tax Cut's Effect on Social Security
WASHINGTON — For all of the partisan brawling over President Obama’s call to extend a temporary payroll tax cut for 160 million Americans, one concern is bipartisan: a significant minority of Democrats and Republicans say that cutting the taxes that finance Social Security benefits will further undermine the program.
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The Obama administration, many budget experts (but not all) and the chief actuary for the Social Security Administration say the proposal will do no such thing. But some conservative Republicans and liberal Democrats who agree on little else are just as adamant that it will.
Both parties predict the payroll tax cut will be extended beyond its Dec. 31 expiration, though the question of how — or whether — to pay for it and some other unrelated issues in the year-end legislation continued to hold it up on Wednesday. Still, the disagreement over the tax cut lingers. It is less over money than philosophy, and reflects a debate as old as the 75-year-old program about Social Security’s fundamental structure.
Financial Outlook Dims for Social Security - NYTimes.com
The Obama administration reported a significant deterioration in the financial outlook for Social Security, and that the financial condition of Medicare was stable but still unsustainable.
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Chuck Level 4 Commenter 4 years ago
Good article, Ralph. And, here is the link to my contrary view http://hubpages.com/hub/The-Social-Security-System I always enjoy a good exchange with you. Chuck