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View Diary: No, White House advisor Gene Sperling, entitlement cuts are not necessary (214 comments)

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  •  Stop it, POTUS staffers. Just stop it. (12+ / 0-)

    We've been through this, various Obama Administration officials...

    There's a plan already on the table that fixes the problem, and it's not insane. It likely won't pass as is, but it should be the starting point for you, as it's a good plan and it's already been vetted fiscally. Get with the program: CRS Option 2:

    Option 2: Cover All Earnings and Pay Higher Benefits
    If the earnings base was completely eliminated for both employers and employees so that all earnings were taxed, 95% of the projected financial shortfall in the Social Security program would be eliminated. To achieve solvency for the full 75-year projection period under this option, the total payroll tax rate would have to be raised by an additional 0.1 percentage points (from 12.4% to 12.5%) or other policy changes would have to be made to cover the shortfall.

    Under this scenario high earners would pay higher taxes but also receive higher benefits. However, the net benefit to the Trust Funds is positive as $5 in additional revenue would provide only $1 in additional benefits (on average over their 75-year valuation period). Annual Social Security benefit payments would be much higher than today’s maximum of $25,440. A worker who paid taxes on earnings of $400,000 each year would get a benefit of approximately $6,000 a month or $72,000 a year—a replacement rate of 18%—while someone with lifetime earnings of $1 million a year would get a monthly Social Security benefit of approximately $13,500 a month or $162,000 a year—a replacement rate of 16.2%.

    it fitfully blows, half conceals, half discloses

    by Addison on Fri Oct 25, 2013 at 05:40:25 PM PDT

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