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View Diary: Why is "touching Social Security" in any manner a bad thing? (142 comments)

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  •  Here is a way to "touch" Social Security (32+ / 0-)
    People lived a shorter time back then and not everyone depended upon it.  There were such things as a pension and people actually retired at jobs instead of being fired.
    Those sound like good reasons to increase the benefits paid by Social Security: more people will be dependent on it for more of their income for a longer period of time.  I suggest we increase the payroll tax to 7% and then use CPI-e for the COLA.  That having been done, we should lift the cap on the payroll tax to include all earned income.

    Were those the changes you had in mind?

    •  I agree with lifting the cap (13+ / 0-)

      on payroll tax.  I have never understood why only the first $100000 or so is taxed.  Just lifting the cap make a huge difference long term.
      I don't think Social Security needs to be increased, but we do need to stabilize it.

      My Brothers Keeper

      by Reetz on Thu Jan 03, 2013 at 06:10:04 AM PST

      [ Parent ]

      •  The cap is not a cap on how much you pay in (11+ / 0-)

        It's a cap on how much income gets insured under the system. Income above the cap doesn't exist as far as SS is concerned; it's not part of the FICA premium, and it's not counted toward the benefit calculation.

        The idea is that the rich shouldn't be able to use SS to insure their extreme wealth - if they don't provide for their own retirement, they get treated no better than someone who made the cap for the last 30 years of their career.

        Removing the cap would open the income of the super-rich to FICA premiums, but it would also mean their benefits would wildly increase as a result as well.

        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

        by Robobagpiper on Thu Jan 03, 2013 at 06:16:22 AM PST

        [ Parent ]

        •  Removing the cap (9+ / 0-)

          won't necessarily increase benefits paid.  The enabling legislation could provide a "cap" on the amount of benefits paid equal to the maximum now paid.

          I know, it's wishful thinking, but I guess if we ever get a Congress sensible enough to lift the contributions cap, the same Congress might be sensible enough to limit benefits for the rich.

          The American Indian: Fighting Foreign Terrorism Since 1492.

          by penguins4peace on Thu Jan 03, 2013 at 06:35:09 AM PST

          [ Parent ]

          •  Those who (15+ / 0-)

            keep suggesting that we "cut" SS are usually the ones who make more income than the contributions limit requires them to participate at all. So easy to say when one has a nice fat pension to look forward to, from a long-term six-figure income.

            You want to "touch" Social Security? Remove the cap and watch it grow. Poof. Instant Revenue Fix.

            And then it's "strong".

            And then it's "solvent".

            All the things our "diarist" seems to be so concerned about.

            Right now, with the austerity assholes in our government, "touching Social Security" means "stealing everything that people have paid in since The New Deal".

            How many ways can people spell the word NO for this lot?

            It is time to #Occupy Media.

            by lunachickie on Thu Jan 03, 2013 at 06:47:21 AM PST

            [ Parent ]

          •  If you remove the cap without indexing benefits (11+ / 0-)

            to the higher incomes allowed, SS permanently departs from the insurance model, and becomes a redistributive handout, which is an anathema to what SS is supposed to be.

            SS is as politically secure as it is because people feel like the money is theirs, not largess from the rich.

            We have means funded through general revenue to do redistributive welfare, some even administered through the SS trustees. That's where we need to be focusing any non-insurance model reforms.

            The fact is, SS doesn't need the revenue from a removed cap. The cap should be raised to regain 90% of wages, as it has traditionally done, but we shouldn't turn SS into welfare. Either the cap remains, or top earners get massive SS checks.

            Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

            by Robobagpiper on Thu Jan 03, 2013 at 07:01:21 AM PST

            [ Parent ]

            •  But if we maintain the curve on the progressive (1+ / 0-)
              Recommended by:
              Jim M

              (small p) nature of the program, the ubber wealthy would have to make payments into the program that would dwarf the massive checks they would get out later.

              "Furthermore, if you think this would be the very very last cut ever if we let it happen, you are a very confused little rabbit." cai

              by JesseCW on Thu Jan 03, 2013 at 07:31:52 AM PST

              [ Parent ]

              •  I have relatively little problem with that. (3+ / 0-)
                Recommended by:
                rsie, JesseCW, fuzzyguy

                My main problem with the "remove the cap!" cries is they buy into a "SS is in crisis!" meme, which is, frankly, bullshit.

                Given healthy economic growth, there never will be a long-term shortfall.

                Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

                by Robobagpiper on Thu Jan 03, 2013 at 08:55:19 AM PST

                [ Parent ]

              •  And the benefits package isn't progressive, it's (3+ / 0-)
                Recommended by:
                fenway49, fuzzyguy, denise b

                regressive.

                The terms "progressive" and "regressive" mean "y is faster than linear with x" and "y is slower than linear with x", not "good for the poor", and "bad for the poor".

                Income tax owed grows faster than linear with total income. It is, therefore, progressive.

                SS's benefits grow slower than linear with contribution. It is, therefore, regressive.

                Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

                by Robobagpiper on Thu Jan 03, 2013 at 08:57:21 AM PST

                [ Parent ]

          •  penquins - if you eliminate the cap (5+ / 0-)

            but cap the benefits you have ended SocSec as we know it. The SocSec system is to "insure" a portion of your own personal income when you stop working. It has never been a system to transfer income from high income earners to lower income earners. What you are suggesting is income redistribution which would be a completely different concept from the founding cornerstones laid by FDR who warned us to never give the program's critics the chance to call SocSec a welfare program. SocSec is a system where you "get what you pay for" and every dollar of contribution improves your benefits. That concept cannot be lost. The benefit formula has a progressive bias, and that can be enhanced as the cap is raised, but every dollar contributed has to count.

            "let's talk about that"

            by VClib on Thu Jan 03, 2013 at 07:31:19 AM PST

            [ Parent ]

            •  One of the great things about that would be (0+ / 0-)

              that people who have just a few years of very high income - athletes, some actors or musicians - would pay in on a lot more income and therefore wind up with a much higher average yearly income when it comes time to calculate their benefits.

              "Furthermore, if you think this would be the very very last cut ever if we let it happen, you are a very confused little rabbit." cai

              by JesseCW on Thu Jan 03, 2013 at 08:01:54 AM PST

              [ Parent ]

            •  Hogwash (1+ / 0-)
              Recommended by:
              badger

              Direct means testing, which I've seen advocated on this very site, would turn the program into a welfare program.

              Raising the cap on pay-ins, but maintaining the cap on benefits is merely tax fairness.  And, sure, there's a bit of stealth "means testing" under the surface of such a proposal, but you'd never actually be able to make that thought stick with the majority of Americans.

              As it currently stands, the rate the wealthy pay in taxes will always be lower than the rate paid by working stiffs.  My mother worked in payroll at a hospital for years.  The top doctors and administrators had paid the entirety of their annual Social Security tax on their very first paycheck of the year.  The rest of the doctors had paid their full SS tax by around mid-February.  Meanwhile, the nurses, the custodians, the payroll clerks--you know, the middle class and working poor--continued paying SS tax on every dollar earned through the year.  Now, when the rich had an effective tax rate of say, 70%, that was all well and good.  No working stiff was going to reach that level of taxation.  And the rich still had shelters and deductions and write-offs to bring their effective tax rate down to, say, 30-35%.  But with a top marginal rate of around 39%, the tax shelters, et al, bring their effective rate below the middle class rate (especially with a capital gains rate of, now, 20%).  Exempting the majority of income of the wealthy from SS tax just drops their effective tax rate even lower.

              Probably the biggest problem our nation faces at present is widening income disparity.  Lifting the cap on SS taxes--so that every dollar of income is taxed--while maintaining the cap on benefits--is simply a matter of economic fairness.  It also ensures the economic health of the program as far as the eye can see.

              It is certainly a far better fix (to the extent any fix is needed) than chained CPI, which only serves to widen income disparity even further.  Same thing with raising eligibility age--that disproportionately benefits people who don't actually work for a living and penalizes those whose work is mannual labor.

              It's about economic fairness and there's not a soul in the country who pays SS tax on every dollar of earnings that you could convince otherwise.  And given that the wealthy stole all the pensions from the middle class and working poor, its damn well about time.

              "Power concedes nothing without a demand; it never has and it never will."—Frederick Douglass

              by costello7 on Thu Jan 03, 2013 at 08:40:34 AM PST

              [ Parent ]

              •  costello - we can tax every dollar of wages (2+ / 0-)
                Recommended by:
                JesseCW, nextstep

                and salaries as long as we allow benefits to increase in proportion to the increased payments. It makes no sense to have SocSec contributions on investment income because that income doesn't stop at retirement and does not need to be "insured" which is the fundamental concept of SocSec.

                If you want to change the SocSec program into an income redistribution program I think that is a defensible public policy position. However, I do think it puts the entire program at risk, and I don't support it. I don't think there is broad public support for changing the fundamental character of SocSec that your benefit is based on your contributions and every contribution dollar enhances your benefit. When we start abandoning the fundamental foundations of SocSec we have few defenses for people who want to provide partial privatization or other schemes that would also change SocSec as we know it.

                "let's talk about that"

                by VClib on Thu Jan 03, 2013 at 10:03:15 AM PST

                [ Parent ]

                •  Hogwashed squared (0+ / 0-)

                  I tell you what.  Let's run for office against each other.  I'll argue that lifting the cap and requiring SS tax on every dollar of earnings while capping benefits will ensure the long term sustainability of the program as far as the eye can see and will contribute to tax fairness.  You argue that I'd be changing the fundamental nature of the program from an insurance plan to a wealth redistribution (i.e. welfare) program.  I absoluetly positively guarantee I'd win that fight.  In perpetuity.  You'd get the Tbag vote and that's about it.  Maybe not even, since most of them are on Social Security.

                  If you hold and stand by fundamental Democratic core beliefs, raising the cap on income taxed while preserving the cap on benefits is the proper solution to whatever long term "problems" the program might have.

                  But you go ahead and cheer on chained CPI and/or an increase in the eligibility age or any of the other proposals that have been offered or embraced by Democratic politicians.  You know what that'll get you?  A program that doesn't support even a poverty existence and a permanent Republican majority.

                  But but but what could we DO, afterall, without changing the fundamental nature of the program?  Lift the cap on earnings subject to the tax and retain the cap on benefits.  THAT'S what you could do.  Would save the program forever and wouldn't hurt anybody.  You got a problem with that?  Then I have a problem with you.

                  "Power concedes nothing without a demand; it never has and it never will."—Frederick Douglass

                  by costello7 on Thu Jan 03, 2013 at 01:39:28 PM PST

                  [ Parent ]

                  •  costello - I would hope that you have a problem (1+ / 0-)
                    Recommended by:
                    nextstep

                    with how I view what is fair for SocSec, rather than me personally. We just have opposing views about how the program should be structured. I have a traditional view that SocSec is program where each worker insures a portion of their earnings and you want to turn it into a welfare program. I am a member of Social Security defenders here at DKOS and we try and let people know about the fundamentals of the program, its history, and the proposals to change it over time. There are many here who agree with you that SocSec should be changed at a fundamental level into an income redistribution program, and many who do not. One of our fears is if the Dems propose scrapping the current system, competing ideas that we don't favor will also have standing to enter the conversation, and compete for political support. Our strongest defense is that we are committed to SocSec's founding principles. It is a very powerful defense we would lose if we proposed fundamental changes.

                    Regarding our hypothetical Congressional race I think it would depend a great deal on what district we were running in.

                    "let's talk about that"

                    by VClib on Thu Jan 03, 2013 at 01:52:04 PM PST

                    [ Parent ]

                    •  It would likely depend (0+ / 0-)

                      on the income level of the hypothetical district.

                      A lot of people on this site (not you, I'm guessing) have argued for straight up means testing.  "If you don't need it," they say, "you shouldn't get it." Now THAT would be the redefinition of the program you describe and fear.  THAT would make it a welfare program and THAT would put the entire program at risk.

                      I don't see my proposal as restructuring the program at all--certainly not into a welfare program--and I believe it would ensure that the program is there for everyone, especially those who need it, well into the future and probably forever.  And I don't think it puts the program at risk AT ALL.

                      Everybody puts in on every dollar earned.  Period.  That's certainly fair, doncha think?  Do you think it more fair that the rich guy completes his obligation in the first week of the year while I pay on every dollar I earn?  I don't.  I don't think that's fair at all.  And everybody that pays in still takes out.  Everybody.  That's fair, right?  And benefits are still tied to the amount contributed.  Up to a certain point.  At some pre-defined point (no real need to change the point that currently exists), your pay-outs top out.  Now if you want to argue that that's not fair, then you'd have to say a progressive income tax is unfair.  Just as its unfair that we give tax breaks to working couples with children, just as its unfair that we tax investment income at an obscenely low rate, just as its unfair that we give tax breaks to oil companies for exploration and development of alternative energy sources (which, by the way, they take the tax credits but never actually explore or develop anything other than more oil; I remember clearly the Exxon COO, or whatever he was, testifying before Congress that they wouldn't ever explore other energy sources, that it would be a waste of their time, but that the government would have to pry those tax credits out of their cold dead fingers), just as its unfair that we give people tax credits based on home ownership.  I could go on, but the entire tax code is "unfair".  Unless you strip out every single tax credit and deduction in the code and abandon entirely the idea of a progressive tax code (charging everyone one flat rate, across the board--and I've never heard anyone other than Rethugs argue for such a thing), then there is nothing "fair" about taxes.  They aren't supposed to be fair; they are supposed to serve a purpose, which is to adequately fund the functions of the government.  The Social Security tax is a tax; nothing more, nothing less.  And that's how everyone sees it...until they retire and start collecting, at least.

                      Now if you want to argue its an insurance program, fine.  I'll go there with you, too.  I have auto insurance as I'm sure you do as well.  I pay in every year--essentially the same amount (it goes up a little, it goes down a little, based on a myriad of circumstances...the age of the car, my driving record, etc., etc.).  I pray to God I never have to collect.  But, if I never have an accident, it's not like I get all of that money back at the end of the (pardon the expression) road.  And, if I do get into an accident--50 years on--its not like the fact that I've been paying in for 50 years entitles me to more coverage than I would have been entitled to in year one.  My "benefits"--my payout--IS tied to how much I paid (how much insurance coverage I purchased) but only up to that point.  That's how insurance works.  That's what insurance is.  And everybody who has a car (outside of Texas, I think) is required to buy insurance regardless of how much they collect or whether they ever collect at all.  Some "take" more from auto insurance than others--maybe some believe the worst drivers collect the most--but nobody has ever called it a welfare program.

                      Once upon a time, we had pensions.  But then the government allowed businesses to raid the pension funds to "invest", then they let them drop pensions altogether in favor of 401K programs, then the government permitted the Bain model of purposefully driving companies into bankruptcy through willful mismanagement thus obliterating long ago promised and earned retirement benefits of helpless workers.  Was any of that "fair"?  Now all most of us have is Social Security and Medicare.  This, to the best of the government's ability, helps to mitigate some (just some) of the damage done by unfettered capitalist greed--damage that the government allowed and even encouraged.

                      Social Security would only be put at risk if the changes to the program could reasonably be argued to be a welfare program.  Direct means testing would do that.  Rich people pay in but they never take out.  That's wealth distribution.  That's welfare.  But having everyone pay in on every dollar earned, and having everyone take out but only UP TO a defined cap....you can argue otherwise until you're blue in the face....no one, save a few accademics and a lot of rich Republicans, is ever going to believe that's welfare or even wealth distribution.  The vast majority of Americans are going to see that as fundamental fairness.  And, so long as the vast majority of Americans see the program as fundimentally fair--and so long as Social Security is solvent--no amount of arguing to the contrary is every going to put the program in jeopardy.

                      "Power concedes nothing without a demand; it never has and it never will."—Frederick Douglass

                      by costello7 on Thu Jan 03, 2013 at 09:12:50 PM PST

                      [ Parent ]

                      •  You're using the wrong analogy for insurance (0+ / 0-)

                        SS's closest analogy is life insurance converted into an annuity.

                        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

                        by Robobagpiper on Fri Jan 04, 2013 at 03:36:52 AM PST

                        [ Parent ]

                        •  All you're telling me (0+ / 0-)

                          is that there are multiple models for insurance.  Fine.  Why not choose a model that strengthens the Social Security program, ensures its long term viability and hurts no one?

                          For the life of me I can not understand the desire to reject the best possible solution to a long term problem (in order to continue the program precisely as is) which WILL inevitably lead to solutions that are less effective and in which real people will suffer.

                          They are going to change the program.  They absolutely are.  When a Democratic President gleefully offers up chained CPI at every negotiation and when Congressional Democrats have embraced chained CPI saying that, absolutely, they could support that...in the right deal, you know changes--bad changes--are coming.

                          The end result of chained CPI, signed into law by a Democratic President, is going to be an electoral wipeout in 2014 that makes 2010 look like a good year for Democrats, and a permanent Republican majority.  And, on a personal level, more and more seniors will, more and more, fall into poverty.

                          What we need to do, given that changes are coming, is to come together behind changes that truly strengthen the program and preserve full benefits for everyone while actually hurting no one.  Lifting the cap on SS tax while maintaining a cap on benefits is a sane, rational solution that makes the program stronger, maintains the program's financial health indefinitely (it would never be a target again), and hurts no one (I do not weep for millionaires and billionaires, who have robbed the working class blind to begin with, paying a little more in taxes).  We need to forcefully gather behind and push this solution because every other proposal on the table is designed to cut benefits, which weakens the program and hurts real people.

                          Already, on an allegedly progressive web site, we have people embracing chained CPI (since Obama proposed it), saying, "Oh, c'mon, it's not so bad."  Yeah, just tell grandma to switch to a cheaper brand of cat food is all.

                          But but but Republicans.  Frankly, I could give a rats ass about Republicans.  I'm worried about the Democrats.  If Democrats make cuts to Social Security, we are royally fucked.  We will never restore benefits, if it is Democrats who make the cuts, and, instead, more and more cuts will follow.  What's more, if it is Democrats who make cuts to Social Security--if a Democratic President signs such a bill into law--the Democrats won't be winning a whole lot of elections going forward.  They sure as hell won't be getting my vote.  Not for dog catcher.

                          Every time the government needs money, they attack the programs that our most vulnerable depend upon and they usually do it by claiming that they are overstating inflation, which is utter bullshit as anyone with a brain and eyes, and making less than $100,000 a year, knows.  The original CPI was just such a trick.  Well, they said, its actually wrong to include food and energy costs because those get factored in to all the other prices, so its like counting them twice.  Complete and utter bullshit designed to siphon more money from the poor to the rich.  Now its the chained CPI because "people make adjustments".  More complete and utter bullshit designed to siphon even more money from the poor to the rich.  But its bullshit that people who say things like "keep your government hands off my Medicare" might see as plausible.  Moreover, its bullshit they can use to satisfy their own weak minds and black hearts so that they can sleep soundly at night in their mansions.

                          Thanks to CPI (and, soon, chained CPI), Social Security is already a wealth redistribution plan--from the poor to the rich.

                          If we don't all get behind lifting the cap and push it with all our might, we're going to end up with chained CPI which is going to cut benefits in real terms and hurt real people (and destroy the Democratic party).  We'll probably end up with chained CPI anyway, because neither party represents the people, anymore; they both serve the 1%.  And chained CPI is what the 1% wants.

                          "Power concedes nothing without a demand; it never has and it never will."—Frederick Douglass

                          by costello7 on Fri Jan 04, 2013 at 08:37:47 AM PST

                          [ Parent ]

        •  No, it doesn't also mean (0+ / 0-)

          their benefits would wildly increase as a result as well, if you adjust the 'bend points' in the benefit formula.

          Bowles-Simpson's proposal is recommending that (a change in the benefit formula).  The problem is that their recommendations would mean that MANY Americans will receive a sizeable decrease in their monthly Social Security checks, not just wealthy beneficiaries.

          Mollie

          “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

          by musiccitymollie on Thu Jan 03, 2013 at 03:08:18 PM PST

          [ Parent ]

      •  The average benefit is $14k/yr. (8+ / 0-)

        Increasing it would allow millions of people to live in a bit more dignity, not scrabbling to pay heating bills or buy drugs.

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