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View Diary: Why do Republicans hate Social Security? (218 comments)

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  •  If we had to raise the cap yes (1+ / 0-)
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    Mathazar

    And I could support a phase in increase back to the 90% income level. Which hitting at about $180k is almost the inverse of the Senator's proposal.

    But the right solution in my mind is simply to install a payroll based fix under the current cap formula, the option that has been systematically excluded from this debate since 2001.

    The actual amount of increase FICA tax per week or the aveage wage worker works out to 40 cents with no further increases needed until 2026. Or you could bite the bullet and increase FICA by 0.1% per year (0.05% each for employer and employee) for 20 years and install a 75 year fix at 100% of the current scheduled benefit. Per CBOs paper last year on 30 Social Security Option published last year. This second version was I am pretty certain the work of Virginia Reno at NASI, Dale Coberly and I came up with a slightly more complex plan independently which is called the NW Plan for a Real Social Security Fix.

    In either case the conventional assumption that we can only address this thorugh some combination of cap increases, price indexing, retirement age changes or means testing ignores the method that has been used most often since 1935: phased in increases in FICA that cost workers only a frction of Real Wage increases over any given year. In the case of current numbers 5% of that increase in 20 future years or 1.6% of that in all future years.

    Or to put it in dollars per week: couch change. That 1.6% represents an actual decrease in take home of 0.015% each year assuming 1% average increase in real wage, fairly anaemic by historical standards.

    Please visit, follow or join our Group: Social Security Defenders

    by Bruce Webb on Fri Sep 23, 2011 at 01:20:35 PM PDT

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