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View Diary: THIS JUST IN: Social Security still not a driver of U.S. debt (70 comments)

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  •  No matter what set of books you carry it on, SS (0+ / 0-)

    is not self sustaining in the long run and the program needs to be changed to insure that everyone can collect one day.   Don't believe me, read what the SSA has to say:

    http://www.ssa.gov/...

    The promise made to people who have paid in to date did not involve means testing.  I expect to be paid proportionately to what I have paid in.   If that changes, then they just need to man up and admit that SS as we know it is a thing of the past, and that old age benefits for "the aged poor" will be funded by taxes and the "aged rich" shouldn't expect the SSA to keep its promise.  

    Enough of the fantasy that SS can't be touched, please.  

    Intolerance betrays want of faith in one's cause. - Gandhi

    by SpamNunn on Wed Dec 26, 2012 at 06:07:25 PM PST

    •  Just in case you don't scroll down far enough: (0+ / 0-)
      The Social Security outlook has worsened significantly relative to last year's report. The actuarial deficit in its combined trust funds is now 2.67 percent of taxable payroll, the highest recorded since the last major Social Security financing reforms roughly three decades ago. The single-year deterioration in the 2012 report is the largest recorded since the 1994 report. While the projected depletion date (2033) for the combined trust funds is not the earliest recorded since the 1983 reforms, we are nevertheless now closer to the point of projected depletion than we have been since enactment of those reforms. The combined Social Security trust funds' balance continues to grow in nominal terms, but has been declining generally relative to the total cost of paying benefits since 2008, and will be shrinking after 2012 in real (inflation adjusted) terms. Thus by almost any objective measure, the financial health of the Social Security system has entered a concerning decline.

      While there is no way for us to know what mixture of additional tax revenues and restraints on benefit growth will prove to be the most palatable means of strengthening Social Security's financial position, lawmakers should be aware that it will become increasingly difficult to avoid adverse effects on current beneficiaries, those close to retirement, and low-income beneficiaries in all birth cohorts if legislative changes are delayed much further.

      Intolerance betrays want of faith in one's cause. - Gandhi

      by SpamNunn on Wed Dec 26, 2012 at 06:13:11 PM PST

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      •  Please Note That the Diary... (13+ / 0-)

        ...mentioned both longer term financial challenges Social Security faces and some of the measures that could be taken to address them.

        While phrased differently, the diary actually mentions the same numbers as the trustees report:

        In the longer term, Social Security's finances will need some shoring up. Its actuaries forecast that the program will start paying out more than it starts taking in by 2021. Under current tax rules, by 2033, recipients would receive only about three-quarters of promised benefits.
        It is also worth noting that the 2010 and 2011 payroll tax cuts President Obama pushed cost the trust fund roughly $100 billion a year.  That had the temporary effect of putting SS into the red for those two years.

        The larger point is that for those looking to make a big dent in the national debt over the next 10-20 years, the two biggest sources are lowering health care costs  (specifically Medicare) and raising tax revenue.

        •  Agree, the discussion of SS long term funding (7+ / 0-)

          should be taken up separately. To lump it in with deficit arguments is dishonest, to say the least.

          And yes, Obama needs to deal with the payroll tax cut that he put in place.  It never should have been enacted simply because it does long term damage to SS receipts.  I still don't understand why he did it.

          Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

          by Betty Pinson on Wed Dec 26, 2012 at 06:42:15 PM PST

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        •  Oy. My inner geek rebels. (5+ / 0-)

          Social Security does contribute to the deficit and the debt. But in often counterintuitive and contradictory ways. For example the adoption of Chained-CPI has the effect of reducing the Unified Budget deficit calculation even as it increases total Public Debt. That is the common sense concept that THE Public Debt is simply a sum of THE budget deficits as those numbers are normally reported in the MSM is totally wrong.

          As an example in FY 2000 Social Security ran a cash surplus (that is excluding interest) and the General Fund ran a cash surplus. Yet both Public Debt and Debt Subject to the Limit (legally different but within a few hundred million of each other) INCREASED by $18 billion.

          Why? Well send in 20 box tops and I will send you a Secret Budget De-Coder Ring (folks over 55 are smiling, the rest of you are asking WTF?). But the short version is that SS surpluses subtract from top line deficit numbers even as those extra TF assets add dollar for dollar to 'Total Public Debt'.

          So there is that. Plus another wrinkle. Current scheduled benefits are projected to increase by formula that would leave real benefits about 12-20% better at Trust Fund depletion than retirees get today. AFTER the projected 25% cut. Now the current scheduled benefit formula is based on fundamental principles of equity and moral precepts common to most world faith and cultural traditions and it would be an outrage to adopt Chained-CPI. That said the Grandma of 2036 will still have a higher standard of living than a Grandma of 2012 from a similar lifetime income position.

          That is 'Catfood' is only a metaphor for a more subtle act of societal injustice, what is really at risk is the whole 'Honor Thy Father and Thy Mother' thing and Eastern equivalents. But the math is tricky. And the conceptual confusion is worse. Particularly when it comes to the concepts of 'deficit' 'debt' and 'unfunded liability'. They just don't map as easily as the Peterson folk would have it. Or for the defenders of Social Security pushing back the other way.

          As an example this statement is actually totally, factually wrong. In a very good cause mind you, and I applaud Jon for the overall post and the thrust of the comment. But still wrong:

          "It is also worth noting that the 2010 and 2011 payroll tax cuts President Obama pushed cost the trust fund roughly $100 billion a year.  That had the temporary effect of putting SS into the red for those two years."

          Oddly the payroll tax holiday cost the TF nothing and equally had nothing to do with SS being cash flow negative those two years. But was still a terrible idea that put SS at long-term risk.

          How could all three of those things be true? Well you will have to wait for that Secret Decoder Ring. Because Federal budget accounting as it relates to the Trust Funds is just weird, weird, weird.

          bruceweb.blogspot.com

          by Bruce Webb on Wed Dec 26, 2012 at 08:54:05 PM PST

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          •  This guy gets it. (0+ / 0-)

            Intolerance betrays want of faith in one's cause. - Gandhi

            by SpamNunn on Thu Dec 27, 2012 at 10:28:50 AM PST

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          •  Thanks for the Background and Clarfication... (0+ / 0-)

            ...it's really helpful.

            Your correction on the impact of the 2-year payroll tax cut on the Social Security Trust Fund was especially helpful.  More here from the WSJ:

            The JEC report notes the effect the cut has had on consumers’ pockets and says it boosts the Social Security Trust Fund. As part of its initial design, the reduced revenue earmarked for Social Security was recovered by transfers from the Treasury General Fund. That increases the debt, but keeps the Social Security Trust Fund at the same level it would be without the cut. Meanwhile, the JEC cites an estimate from Macroeconomic Advisers that the economic growth spurred by the tax cut led to saving or creating 400,000 jobs. The workers in those positions, which wouldn’t exist otherwise, pay into the Social Security Trust Fund making the total higher than it would be without the lower tax rate.
        •  These actuarial forecasts are projections. (0+ / 0-)

          Subject to revision. And if approached sagely,
          could be used to expand and increase benefits.

          Who here wouldn't jump at the chance to be for
          expanding and increasing the social safety nets
          for the first time in many decades. Isn't it needed?

          The future baselines are clear. The number of
          beneficiaires will approach unsustainability in
          the future at some point. As this author denotes,
          Social Security itself is not a deficit driver now.

          Most recipients are not just recipients of SS.
          They also get Medicare and Medicaid, or both.
          Along with food, housing, energy, and transportation
          subsidies which are all soon be on the chopping block.

          These 'issues', the conventional wisdomers, or
          villagers, as they are known locally, have been adopted
          for what appears, at times, to be conflicting ideologies.
          Regardless of their intent, this condition is
          readily exploitable in so many different ways.

          I think there are many reasons, both tactical
          and strategic, that democrats should actually
          be proactive about 'reforming' all of the safety
          net social programs. And by reforming, I absolutely
          mean expanding and increasing actual benefits.

          It would take very little to change an action slogan
          from 'save social security' to 'expand every safety net'.
          As the current debates clearly show, the actual facts
          and figures have a very small relation to the dialogue.
          Or its adoption and repetition by those who know better.

          This means we could, ostensibly make demands
          with a case for expansion of programs and increasing
          benefits, all while moderately adjusting the methods
          used to fund them and guarantee their futures.
          Yes, that means raising taxes on the well off!
          I will gladly pay more myself if it benefits all of my
          family, neighbors, community, and world.

          It only took a few thousand OWSers to completely
          change the dominant social and political narrative
          from the very same presently dominant meme.
          The case for economic justice has not disappeared.

          We have been given the perfect opportunity in disguise.
          The last elections proved that even massive
          economic inequality of resources can be defeated,
          or at least marginalized, with the proper leverage.

          Every time some one asks about 'debts or deficits,'
          reply with a human needs or a class based answer.
          99 % > 1%. Families. Sick. Disabled. Veterans. Elderly.
          Workers. Students. Personalize who and what you are for!

          If enough people respond to the 'fiscal crisis' in such
          a positive and proactive method, those who seek
          to exploit it against the vast majority of the rest of us
          will soon tire of its lack of impact and abandon it.
          We can still push for all of them after that occurs, too.

          It also has the benefit of being for something good,
          rather than the opposite of being against the bad,
          when they are both just two views of the same situation.
          I know which I would prefer to ally my time and efforts towards.

          Thanks for all of your efforts.

      •  There's a real simple fix for this. (1+ / 0-)
        Recommended by:
        ImpeachKingBushII

        Raise the upper limit on the payroll tax, so that more money goes into it.

        Social Security is more stably funded than just about anything else you can name.

        Also, payroll tax holidays are a bad idea, since the shortfall is made up out of the federal deficit.  This does allow people to say that SS contributes (however little) to the deficit.

        The hungry judges soon the sentence sign, And wretches hang, that jurymen may dine.

        by magnetics on Thu Dec 27, 2012 at 01:24:06 AM PST

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      •  why is SS not a separate issue? ... (0+ / 0-)

        ...Why is it on the deficit reduction table, when it adds ZERO, NOTHING, NADA to the deficit? One thing at a time. I can't multi-task. Can you? What on earth makes you think 535 members of Congress and 100 Senators can? I suggest we work on solving the deficit, then we'll deal with SS/Medicare. It's not in crisis mode, but the deficit is. SS/Medicare isn't going anywhere for awhile. We all know it's not about simple mathematics or arithmetic, don't we?

        "I wish to have no connection with any ship that does not sail fast, for I intend to go in harm's way." John Paul Jones

        by ImpeachKingBushII on Thu Dec 27, 2012 at 03:08:24 AM PST

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