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  •  The cap should be DROPPED to $70k (0+ / 0-)

    Most people never hit the cap, and anyone can survive in retirement on the income replacement for 70k.

    A problem now is that people who earn above the current cap are also the people who tend to live longest, so the big SS checks get issued for 30 years while the little ones only go on for 5 to 10 years before the recipient dies.

    I also recommend dropping the retirement age to 62 with no increase in benefits for delaying. It's ridiculous that 20-somethings can't find jobs because 66-year-olds are forced to hold on to them.

    Am I right, or am I right? - The Singing Detective

    by Clem Yeobright on Tue Nov 13, 2012 at 01:46:33 PM PST

    [ Parent ]

    •  You're wrong. Raising the cap would solve the (2+ / 0-)
      Recommended by:
      YucatanMan, RandomNonviolence

      long-term shortfall in the Social Security trust fund, even if you let rich people get bigger Social Security checks.

      •  I beg to differ. IOW: I call bullshit. (0+ / 0-)

        Removing the cap would result in $50k/month SS checks, unless you throw away FDR's concept of Social Security and declare it a welfare program.

        Is that what you have in mind?

        Am I right, or am I right? - The Singing Detective

        by Clem Yeobright on Tue Nov 13, 2012 at 02:12:19 PM PST

        [ Parent ]

        •  not as much as 50k, a lot less (1+ / 0-)
          Recommended by:
          RandomNonviolence

          but your point stands, no means testing adjust the income CAP at 90% and leave SS alone.

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Tue Nov 13, 2012 at 02:22:35 PM PST

          [ Parent ]

        •  do you have a link for that (0+ / 0-)

          statistic, and also, I thought the current program had some steps, that even as the cap goes up, what you can be paid hits a limit?

          •  AIME benefit formula based on income CAP (1+ / 0-)
            Recommended by:
            Clem Yeobright

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Tue Nov 13, 2012 at 02:27:09 PM PST

            [ Parent ]

            •  so we could substantially raise caps (0+ / 0-)

              and create further 'bend points' as SS admin calls them, and then an ultimate maximum benefit as they do for the family benefit.    All ideas already in the law.  There is no reason to pay out $50k/month.

              •  Why not just have Congress play with the benefits (0+ / 0-)

                every damn budget year?

                Because that's what will happen when you decouple benefits from contributions.

                As FDR designed it, every dollar you earn - up to the cap - results in an increase in your benefit when you retire.

                The bend-points are at the breaking point already.

                There is nothing wrong with taxing income and distributing the revenue to those who need it, even ear-marking it for needy retirees only. But why do you insist on calling that - falsely - Social Security, which is designed on a completely different model?

                Am I right, or am I right? - The Singing Detective

                by Clem Yeobright on Tue Nov 13, 2012 at 02:56:44 PM PST

                [ Parent ]

                •  first of all (0+ / 0-)

                  caps don't have to be removed entirely, so one false assumption.

                  And the steps were there in the original, so it isn't exactly something anyone has played with every damned budget year, is it?  And no reason to start.

                  So other than made up reasons, do we have some reasons that some raise in the caps can't or won't work to provide additional funding.  As I recall, in real dollars, adjusted for inflation, the caps are actually at about the lowest point in a real long time.

                  No one is saying create a welfare model. I do understand the reason it applies to everybody.  But such black and white dichotomies when looking for solutions, no room for modification,   that just strikes me as fear over function.

                  •  You recall really poorly (1+ / 0-)
                    Recommended by:
                    howd
                    As reported by CRS, "Since 1982, the Social Security taxable earnings base has risen at the same rate as average wages in the economy. However, because of increasing earnings inequality, the percentage of covered earnings that are taxable has decreased from 90% in 1982 to 85% in 2005. The percentage of covered earnings that is taxable is projected to decline to about 83% for 2014 and later. Because the cap was indexed to the average growth in wages, the share of the population below the cap has remained relatively stable at roughly 94%. Of the 9.5 million Americans with earnings above the base, roughly 80% are men and only 9% had any earnings from self-employment income" (Mulvey 2010).
                    socialsecurity.gov

                    Am I right, or am I right? - The Singing Detective

                    by Clem Yeobright on Tue Nov 13, 2012 at 03:30:51 PM PST

                    [ Parent ]

                    •  Dude JFromga is right, the income (0+ / 0-)

                      CAP is at its lowest point in years, about 84% according to your link, traditionally it was at 90%.

                      And thats after the COLA last year, when the income CAP was lifted from 106k (83%) to 110k (84%). Lifting the income CAP to 90% might mean as much as $4,700 increase to the max annual benefit. IIRC the CBO scoring tells us this adds a little bit of revenue over benefits paid.

                      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                      by Roger Fox on Tue Nov 13, 2012 at 04:19:56 PM PST

                      [ Parent ]

                      •  For the record (0+ / 0-)

                        The cap in 1990 was 51,300 = 90,827 in 2012 $
                        in 2000 76,200 was 76200 = 102,400
                        in 2004 87,900 was 87900 = 107,680
                        in 2013 113,700

                        so jfromga is not correct.

                        Am I right, or am I right? - The Singing Detective

                        by Clem Yeobright on Tue Nov 13, 2012 at 04:34:18 PM PST

                        [ Parent ]

                        •  Clem, Clem, Clem (1+ / 0-)
                          Recommended by:
                          Clem Yeobright

                          You posted this comment, saying the same thing as the other person.

                          http://www.dailykos.com/...

                          Its by %

                          Your own link said PERCENT.......

                          the percentage of covered earnings that are taxable has decreased from 90% in 1982 to 85% in 2005. The percentage of covered earnings that is taxable is projected to decline to about 83% for 2014 and later.
                          1982=90%
                          2012=84%

                          84% is as low as its been in years.

                          You two are saying the same thing using different language. Lets save our energy for the GOP.

                          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                          by Roger Fox on Tue Nov 13, 2012 at 05:22:47 PM PST

                          [ Parent ]

                          •  Hearing you. (1+ / 0-)
                            Recommended by:
                            Roger Fox

                            Joe/Joan from Georgia wrote:

                            As I recall, in real dollars, adjusted for inflation, the caps are actually at about the lowest point in a real long time.
                            and he/she is wrong. So what?

                            You and I have been here before, and I - more than you, to your credit, I suppose - get exasperated when people here post:

                            Oh look! Something shiny over there in the trees! It may be gold or silver! Let's tax it! And call it Social Security!
                            I'm waiting for the proposal that we tax alcohol and tobacco an additional 6.2% and solve the [non-existent] Social Security problem forever!

                            I'm not afraid of our enemies; FSM save us from our friends.

                            No?

                            Am I right, or am I right? - The Singing Detective

                            by Clem Yeobright on Tue Nov 13, 2012 at 05:33:03 PM PST

                            [ Parent ]

                        •  \ this is what was said (0+ / 0-)
                          As I recall, in real dollars, adjusted for inflation, the caps are actually at about the lowest point in a real long time.
                          Was that said 100% accurate?   Well maybe not 100%, but its close.

                          Today if we taxed at 90% the SS income CAP would be about 186,000. See table 3

                          http://aging.senate.gov/...

                          But we dont, today the cap is  at about 84%, 110,100.

                          The Trustees dont use normal inflation adjustments because they dont account for increased income disparity.

                          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                          by Roger Fox on Tue Nov 13, 2012 at 05:52:47 PM PST

                          [ Parent ]

                    •  yes I used the wrong measuring (0+ / 0-)

                      stick but reached the right conclusion, I should have looked it up.

                      If we kept the caps so that the same percentage of the working populace paid into the system, then the cap would be substantially higher.  Not a change in policy, but resetting the policy to what it has historically been.   That would not turn the system into a welfare system.  It would produce more revenue.  And yes,  higher earners would get bigger checks, and they would live longer.  Which is why another step or two could be added.  

                      While I may agree there is absolutely no problem with SS now,  it is not in fiscal crisis.   It will eventually need some adjustment just to remain as fair as it was, ie, top earners drop out too quickly and fewer are paying in on a substantial portion of their incomes.

                      No one here has suggested creating new taxes totally unrelated and calling it social security.

                      Public polls show people would rather pay more withholding tax and leave both Medicare and Social Security in tact.  I don't think anyone is trying to argue for fundamental ways to alter these programs at this blog.  Merely tweaking the income streams in ways that are consistent with the original program.   I fail to see how raising additional revenue using the traditional structures is the cause of such alarm and angst.

                      Over the long term, job growth, younger workers finally making it into the job market instead of being shut out, good wages, will increase revenue as well.  We need to pursue all fronts.

                      •  Money FROM higher cap goes TO higher earners (0+ / 0-)

                        Raising the cap doesn't affect the benefits of those below the cap, although it MAY result in more of their contributions going to their bosses 30 years after they're dead.

                        The cap is not a problem, except that it's too high.

                        Am I right, or am I right? - The Singing Detective

                        by Clem Yeobright on Wed Nov 14, 2012 at 08:04:41 AM PST

                        [ Parent ]

                        •  since current revenues (0+ / 0-)

                          don't go to those who pay in now, but to those receiving benefits currently, raising revenues now covers current shortfalls now.

                          What you are trying to tell me, by yelling "You're stupid", not explaining, never a good way to gain allies or even educate someone, is that it will increase deficits in the out years making the current projections of shortfalls worse. I had not seen that argument before or thought of it in that way.

                          If you have some sources for these projections I would still like to see them.

                          •  Can you project medical innovation? (0+ / 0-)

                            Where would the SSTF be today if the cardiac bypass had not been developed, if thousands and thousands of workers were still dying in their 50s before they collected a penny in SS?

                            What CAN be projected is that any increase in life expectancy will redound more to higher-income people.

                            SS is intended to replace income at a comfortable level, not at all levels. Let's stick with that principle.

                            Am I right, or am I right? - The Singing Detective

                            by Clem Yeobright on Wed Nov 14, 2012 at 09:37:37 AM PST

                            [ Parent ]

                          •  I am a math person (0+ / 0-)

                            in some respects.   I want to see what lower caps do to the ability to fund current obligations, as well as projections on future obligations.  I acknowledge that projections are suspect because the world is not covered in horse dung right now.  Nevertheless,  for a short/medium term decision pattern,  we can see what various proposals will do with real numbers.  I find those more convincing than discussions of bypass surgery or horse dung.

                          •  There's a huge amount of data at ssa.gov (1+ / 0-)
                            Recommended by:
                            jfromga

                            Am I right, or am I right? - The Singing Detective

                            by Clem Yeobright on Wed Nov 14, 2012 at 10:06:58 AM PST

                            [ Parent ]

                          •  thank you for the page (1+ / 0-)
                            Recommended by:
                            Clem Yeobright

                            the report addresses the issue of subgroups without modeling it,  clearly minorities/lower income workers, etc.  may show a different pattern.

                            It would seem that payments of benefits is mildly progressive, less so now than originally.  The proposal to take caps back up to the 90% still comes out as more progressive than the current projections.   The  indexing of benefits would be a small amount more progressive than the current scheme as well.

                            The model did not look at lowering caps, so I still don't know if that would be even more progressive,  but it doesn't seem to be suggested by the progressive nature found for raising the caps.  

                            I will read the article and study on it some more.

                            Do you have a policy objection to benefit payouts being overalll progressive, ie,  lower income people getting a greater return for money paid in (pretermitting the issue of minorities being especially shortchanged for which there is no data in this report) ?

                          •  My concern is 'welfare-ization' of SS (0+ / 0-)

                            I think the system is fine as it is; the 15% bend-point is scarcely 'fair' but it is accepted as part of the income-replacement formula and that's what counts.

                            I worry that an even lower 'bend-point' would break the principle, that it would look just too cynical. What do you call a contribution that generates no (or a tiny) associated benefit? A tax.

                            There's nothing wrong with providing old-age relief via a tax, via the income tax; I think we should do more of it and we might be able to relieve some of the pressure on Medicaid, which pays for a nursing home but not staying home. But SS is still contributions -> benefits, and we're foolish if we futz with that.

                            Of course we can't really lower the cap because the fiscal effect on the current budget would be prohibitive. As you've pointed out, we need today's collections to fund today's payments. But raising the cap outside the current calculation doesn't provide any long-term benefit that I can see.

                            In summary: SS has a mystique about it, rightly or wrongly, that must be preserved. That's all I'm concerned about.

                            Am I right, or am I right? - The Singing Detective

                            by Clem Yeobright on Wed Nov 14, 2012 at 12:18:56 PM PST

                            [ Parent ]

                          •  but do we let perception (0+ / 0-)

                            rule reality.  The numbers in the report show earliest cohorts receiving a redistributive no. of .3,  current is about .15,  raising caps back up to the traditional cut point,  goes about .19 (all from memory so I might be off a little),  the scale is 0-defined contribution plan effect (dollar in dollar out)- to 1-redistributive as in a fixed benefit regardless of contribution plan.  So the plan, untouched or the tweaks as described in the report always was and remains closer to defined contribution plan, and very mildly progressive (redistributive).

                            Personally, I don't think a slightly redistributive plan, anything that stays below .5 turns this into welfare.  We are far from that point now, and would stay there even with some tweaking.  IF people simply didn't know how the system works, but are pretty happy with the way it was and is traditionally, surely it isn't going to suddenly become welfare in the average American's mind?

              •  Lifting the cap would create a massive monthly (1+ / 0-)
                Recommended by:
                Clem Yeobright

                benefits check. More like 12-14k a month. 50k  is a slight exaggeration.

                I think Bend points just are confusing when looking at the bigger picture, which is the Income cap, and the AIME formula.

                FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                by Roger Fox on Tue Nov 13, 2012 at 04:11:11 PM PST

                [ Parent ]

                •  but the formula (0+ / 0-)

                  relies on bend points to reduce the total check so that payout is proportionally higher on lesser initial incomes.  The tax is regressive in that it taxes lower incomes more than the highest incomes, but is somewhat progressive in returning more to lower incomes on a proportional basis because of the bend points.   Both are vital pieces of the calculation, both offer points at which payouts can be adjusted to achieve greater fairness.

          •  Here is an excellent report from the Senate (0+ / 0-)

            Social Security Modernization: Options to Address Solvency and Benefit Adequacy -- see the table on page 8 for a nice summary.

            The option to eliminate the cap and increase benefits to the rich, but not by the full amount (the third option under revenue boosters), would solve Social Security's problems.

            •  Sigh, have you ever read the 2012 SS trustees low (1+ / 0-)
              Recommended by:
              Clem Yeobright

              cost scenario component in the 2012 report?

              Well it turns out some job creation and wage growth makes SS good thru 2090.

              SS was never designed to survive a 25 yr recession. If you think thats a realistic projection....... 25 yr recession... well then I guess you feel the need to fix SS based on an abnormally crazy projection.

              FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

              by Roger Fox on Tue Nov 13, 2012 at 03:05:38 PM PST

              [ Parent ]

        •  The formula does not provide for limitless (1+ / 0-)
          Recommended by:
          RandomNonviolence

          increase in SS payments to beneficiaries.

          There is an upper limit to the payout.  

          I'm not sure you and Bob are talking about the same thing, but "raising the cap" -to me- refers to applying the FICA tax to income over $110,100 per year.  

          In fact, I think it should be applied to all income, period.

          Since there is an upper limit to the benefits paid out, the rich will pay considerably more money into the fund, but not be the recipients of any higher benefits when they are old.

          "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

          by YucatanMan on Tue Nov 13, 2012 at 02:35:45 PM PST

          [ Parent ]

          •  There is no upper limit. That would be a welfare (0+ / 0-)

            program, and SS is not a welfare program.

            SS replaces income at - I think - 11% for the highest 'bracket' (it may be 15%; check it out on ssa.gov - I haven't time now).  This has to do with the 'bends' in benefit calculation. So if someone makes $500k/month and pays FICA on it, his/her retirement benefit will indeed exceed $50k/month - for every month he/she lives ...

            If you are arguing that SS should collect taxes on some income but that that income should be irrelevant to benefit calculation - then you are making SS a welfare program. Why not collect that tax as income tax - which it is - and use it as 'general revenue' to supplement Social Security where necessary? In other words, why declare it SS when it is outside the principle of the program? Because when SS becomes just another welfare program, like food stamps, then Congress can futz with reimbursements every damn budget year and is not constrained by formulas.

            FDR designed SS as an income-replacement program. It works great. Why confuse it with programs designed on different principles?

            Am I right, or am I right? - The Singing Detective

            by Clem Yeobright on Tue Nov 13, 2012 at 02:47:07 PM PST

            [ Parent ]

          •  The Cap is on income, no cap on benefits (1+ / 0-)
            Recommended by:
            Clem Yeobright

            AIME formula is used to link income to benefits, in essence making it seem like there is a cap on benefits.

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Tue Nov 13, 2012 at 03:10:49 PM PST

            [ Parent ]

      •  IIRC 2011 CBO scoring makes it a Wash (2+ / 0-)

        The Shortfall in 2011 was IIRC about .6% of GDP, removal of SS income cap creates .6% of revenue.

        Theres nothing wrong with SS that cant be fixed by fixing the economy.

        Take a look at the 2012 report, low cost scenario, its good thru 2090.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Tue Nov 13, 2012 at 02:25:54 PM PST

        [ Parent ]

    •  dropping cap to 70k drop benefits (1+ / 0-)
      Recommended by:
      Clem Yeobright

      drastically. Big time.

      AIME formula:Calculates benefits based on income CAP.

      It's ridiculous that 20-somethings can't find jobs because 66-year-olds are forced to hold on to them.
      I agree, so lets create 25 million jobs.......

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Nov 13, 2012 at 02:20:25 PM PST

      [ Parent ]

      •  It's bigger than that. (0+ / 0-)

        CEOs in the U.S. are in their 60s; those in Europe are in their 50s.  It's been argued that 50-somethings make more daring and more rational decisions than do 60-somethings.

        If you have worked with people in their 50s and people in  their 60s, it's hard not to favor a lower retirement age from an argument for efficiency and economic growth.

        Am I right, or am I right? - The Singing Detective

        by Clem Yeobright on Tue Nov 13, 2012 at 02:35:01 PM PST

        [ Parent ]

        •  LOL, I'm mid 50's (1+ / 0-)
          Recommended by:
          Clem Yeobright

          And I dont care what age you are, I will run your ass ragged.

          I'm that crazy assed younger risk taker, but all grown up, and I learned how to assess risk better than the kids......with the wisdom of the mid 50's age group.

          I can go 35 hours with just naps.

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Tue Nov 13, 2012 at 02:59:50 PM PST

          [ Parent ]

          •  Exactly my point. You won't do that in 2022. (0+ / 0-)

            Move everybody under 62 up a level of responsibility - and income - now and get the dead weight off the executive floor, and the entire economy will benefit. GDP will go up as the number of happy retirees (drawing SS on a max of $70k qualifying income/year) will go up too!

            Am I right, or am I right? - The Singing Detective

            by Clem Yeobright on Tue Nov 13, 2012 at 03:05:23 PM PST

            [ Parent ]

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