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"We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions . . . . With those taxes in there, no damn politician can ever scrap my social security program."

- President Franklin D. Roosevelt

Perhaps the most brilliant stroke of political genius in the establishment of Social Security was the payroll tax. At its core, Social Security was and is a promise to the American people: If you pay into the system then you earn the right to guaranteed benefits. That's each and every American who can work to pay into the system, regardless of need in retirement. That promise has been fulfilled for the past 75 years and can continue to be until 2037, according to the 2010 Trustees' report, with no changes to the system.

Why this structure was such political genius was that it created an investment--social, political, and financial--on the part of every American, which every American will then reap. That investment, particularly the political investment, cannot be overrated, and explains why Social Security has been considered the Third Rail in American politics for seven decades. And why shouldn't it be? It's far and away the most effective and successful government program in the nation's history. It's so well-loved, every modern Democratic president (including the present one) seems to be laboring under the misapprehension that if he is the one to "fix" it forever, he will be revered by a grateful populace forever. (The Republican ones clearly want to do away with it.) Except almost every plan for "fixing" it forwarded thus far will ultimately weaken it.

That includes the idea of means testing, or reducing or eliminating benefits for wealthy individuals. On the face of it, it sounds almost progressive. Why should the well-off get the same benefits as everyone else? They don't need them, why shouldn't that money be redistributed to those who need it more?

The simplest answer is that it's their money, too. They paid into the system and, in doing so, bought into the same promise as the rest of us. Which gives them the same incentive to support the program as the rest of us. In their 1999 book, Social Security: The Phony Crisis, Dean Baker and Mark Weisbrot address this.

The justification for denying benefits to people who have paid taxes into the system is also questionable. We do not deny interest payments to wealthy owners of U.S. Treasury bonds, for example, and it is difficult to see how the payment of Social Security benefits to rich senior citizens is any less appropriate. Indeed, why single out senior citizens as a group for special treatment in this regard? If we think that the rich are getting too much of the economic pie, then they should be taxed more--not just the ones who happen to be over 65.

It's important to recognize, though, that there is already a progressive earnings test built into the system, in that higher income retirees pay income tax on a portion of their benefits, and lower-wage earners get a higher return on contributions. In that sense, income fairness exists already in the program.

Exchanging that basic fairness for means testing Social Security would take away that "legal, moral, and political right" of all Americans to collect their pensions. It turns Social Security from what is essentially an insurance program into welfare. Which in turn would deeply erode political support for the program. The constituency for any aid program is far less powerful than the constituency for Social Security--the whole of the American workforce, and those with money are the most powerful.

There are other, simply practical reasons, to reject the idea of a means test. Primarily, there just aren't enough wealthy seniors to achieve significant savings by reducing their benefits. Use the cut-off level of $250,000 for the definition of wealthy. With roughly two percent of all tax filers in the US claiming that level of income, the percentage of seniors in that bracket is insignificant.

In fact, the administrative costs for the Social Security Administration (SSA) in trying to make income determinations, measuring need, and policing the system would be significant--potentially outweighing any savings in benefits. Take the example of Medicaid, which is means tested. Significant administrative resources have to be devoted to determining assets, and policing would-be recipients trying to hide those assets in order to qualify.

There's a compelling argument that means testing would also serve as a disincentive for retirement saving. AARP's executive vice president for policy make this argument.

Imposing new limits for the well-off could backfire in various ways. A means test could adversely affect retirement planning and lower the personal savings rate if people concluded the program would penalize them for having higher retirement incomes or larger nest eggs. It would discourage older persons from continuing to work beyond eligibility age, depriving them—and the economy—of additional money. It would create incentives for people to take lump-sum distributions from pension plans, strategies that could prove shortsighted and harmful.

What makes more sense than penalizing older Americans for their wealth--after they've paid into the system--is to tax them more while they're earning. Don't decrease or eliminate their benefits from a program they've paid into--increase their contribution to the program while they're earning. As of this year, Social Security taxes are paid on about 86% of an individual's earning, up to $106,800. Earnings above that magic $106K mark are not subject to the payroll tax. What does that mean?

[A]s currently constructed, a person with a gross income of $10,000 will have $620.00 withheld as Social Security tax from his check, with the employer paying a matching $620.00. A person with $110,000 of gross income in 2010 pays Social Security tax of $6,621.60 resulting in an effective rate of approximately 6% which is lower than the 6.2% rate paid by those who earn less than $106,800.00. An individual earning a million dollars a year in wages will pay the same $6,621.60 in Social Security tax (resulting in an effective rate of approximately 0.66%), with similar employer matching.

Does that strike anyone as fair?  Those earning the most money end up paying a dramatically lower percentage.

Getting rid of this inequity in the system makes much more sense for the long-term stability of Social Security, and would incidentally, go a long way toward assuring its sustainability beyond 2037. Raising, or eliminating, the payrolll tax cap is going to be a massive political battle, given the potentially disastrous two percent payroll tax holiday the Obama administration agreed to in last year's tax cut deal. Republicans have already said they'll never allow that tax to be "increased" again. How the administration will extract itself from that bad deal, and restore or even increase the payroll tax will be a real measure of Obama's political abilities, and will to do what's right.

That it is the right thing to strengthen Social Security is hardly arguable, unless you're a Pete Peterson afficiando who wants to see the program demolished. Strong majorities of Americans, even bipartisan majorities, in poll after poll, want to see Social Security maintained and strengthened.

Social Security is one of very few lasting American institutions in which we're all in it together. That's been the strength of the program all along. It's not worth undermining that for the meager savings means testing could achieve.

Originally posted to Daily Kos on Sun Feb 20, 2011 at 02:00 PM PST.

Also republished by The Amateur Left, The Democratic Wing of the Democratic Party, and Social Security Defenders.

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Comment Preferences

  •  I'll try to be around (50+ / 0-)

    for comments for a while. I'm in the middle of scoring panel submissions for one of the NN11 tracks, so will attempt to make the brain shift as necessary.

    But one other thing that I've been thinking about along the lines of "we're all in this together." What do we really share in the sacrifice of in this country for a greater good? How many families have to share the burden of sending a loved one to war? For that matter, how many of us really have had to sacrifice anything for the wars?

    Social Security is a tie that binds. That can't be taken lightly.

    When it becomes "uncivil" to call out liars, lying becomes free. -- Rick Perlstein

    by Joan McCarter on Sun Feb 20, 2011 at 02:11:46 PM PST

    •  GOP wants to put this anvil around DEM neck (14+ / 0-)

      And Obama is just stupid enough to let them do it. He already proved it with the disastrous 2% payroll cut this past year.

      You know this is right out of GW Bush's playbook. His road to privatization said the same thing - all we want is to divert 2% of your money to private accounts. What he didn't say was that, yes, this cut is only 2% of your earnings, but it is a massive 30% of your personal contribution toward Social Security. This is massive and dramatically undercuts the program. I think most Americans would rather the little money they are saving in payroll taxes was in fact going to Social Security. It doesn't amount to anything besides being able to buy a few six packs and lattes every couple of weeks.

      Everything I write is within a margin of error of precisely 100%.

      by Bailey Savings and Loan on Sun Feb 20, 2011 at 02:22:48 PM PST

      [ Parent ]

      •  Agreed. It's a rat trap, and Obama's blithely (7+ / 0-)

        stumbling right into it -- to the grave peril of the Democratic brand, and the whole future of the Party.  This is why we need primary pressure on many in the Party: To force them to step back from these disastrous positions and false memes.  They are both dupes and being corrupted by the corporate money.  

        Conservatives are] engaged in one of man's oldest exercises in moral philosophy; ...the search for a superior moral justification for selfishness. JK Galbraith

        by Vtdblue on Sun Feb 20, 2011 at 02:29:23 PM PST

        [ Parent ]

      •  You are so right. And can you imagine (9+ / 0-)

        the frustration of little old ladies (and men) trying to figure out what investments they should make to ensure they have something to live on? And at a time when they probably have increasing health issues, and perhaps decreasing mental accuity and all they want to do is try to live out their lives with as little perturbation as possible?

        A society grows great when old men plant trees in whose shade they know they shall never sit. -Greek proverb

        by marleycat on Sun Feb 20, 2011 at 02:30:44 PM PST

        [ Parent ]

        •  Little old ladies and men, who would be (5+ / 0-)

          up against Wall Street in trying to determine what investments to make.

          We all know how well that worked out in the past, just look at public and private pensions. They've done a fabulous job investing and losing billions, that now union workers are supposed to make up.

          Wall Street would love to privatize Social Security, more raping and pillaging from the village peons.

          They make money on food stamps, so why wouldn't we want that great vampire squid sucking (oops, I meant investing) our social security dollars too?

          My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

          by pvmuse on Sun Feb 20, 2011 at 03:29:49 PM PST

          [ Parent ]

        •  Exactly right, marleycat (6+ / 0-)

          At one time in my life, I directed a multimillion dollar investment fund for the foundation associated with the scientific organization I also directed.  Now, I'm retired, I have MS, I don't have a broker on speed dial anymore, and I don't want to. I want the damn Social Security and Medicare benefits I am ENTITLED to by virtue of having prepaid for them over more than 40 years of work.  And, neither President Obama nor anyone else had better touch either one of them to pay for two  murderous, unfunded wars I never wanted.

          Furthermore, many American war profiteers accrued  enormous financial benefits from those wars, Dick Cheney and Condi Rice come to mind, and now we've given them a break to help them pay the taxes on those profits even though some claim it jeopardizes our ENTITLEMENT (yes, we are entitled, and no, "entitled" is not a bad word).  

          President Obama needs to turn his attention to the cost of medical care in this country and the way it's being torqued by having to pay obscene, multimillion dollar annual executive salaries and share holder profits to the owners and employees of for-profit private health insurance and pharmaceutical companies.  Yes, those costs will wreck havoc with both Medicare and Medicaid and they should be addressed appropriately. And, NO, I don't want to hear another word about the cost of researching new drugs. We already pay most of those costs through research grants made by the National Institutes of Health and taxpayer support to public AND private universities, and big pharma is banking obscene profits at our expense.

          Anybody who thinks Wisconsin is just the beginning of street protests in this country is right if the plutocrats make one wrong move.

          Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

          by RJDixon74135 on Sun Feb 20, 2011 at 03:52:02 PM PST

          [ Parent ]

      •  Means testing makes it welfare (1+ / 0-)
        Recommended by:
        denise b

        That's the argument against it.   And welfare is an oprphan and gets cut.  SS has fairness built in already, as the post notes.

        The scientific uncertainty doesn't mean that climate change isn't actually happening.

        by Mimikatz on Sun Feb 20, 2011 at 05:36:56 PM PST

        [ Parent ]

      •  Obama long ago gave up on the New Deal (2+ / 0-)
        Recommended by:
        verso2, David Kaib

        To the extent he keeps it alive, it's out of either political or legal necessity. He's a neoliberal to the core, believing (or pretending to believe) that market-based solutions can solve everything, with token government intervention.

        "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

        by kovie on Sun Feb 20, 2011 at 06:01:37 PM PST

        [ Parent ]

        •  well, that has been true of the Dem Party since (3+ / 0-)
          Recommended by:
          verso2, Bluefin, David Kaib

          Clinton took office. Not only was Clinton an enthusiastic deregulator, but he passed NAFTA and helped form the WTO.

          One of the reasons I was opposed to Hillary's nomination in 2008 was because I was afraid we'd get another disastrous eight years of Clinton policies.  Then Obama won the nomination, surrounded himself with Dubya-ites and Clintonistas, and that's what we got anyway.

          •  It was pretty much a given (1+ / 0-)
            Recommended by:
            David Kaib

            that we'd get some sort of corporatist neoliberal with a neocon foreign policy. The main difference between each party's mainstream these days being that of relative competence, average intelligence, and the degree of heartlessness. At least our sellouts are smarter and not quite as horrible.

            Not quite what the founders bargained for, although some of them expected it.

            "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

            by kovie on Sun Feb 20, 2011 at 07:40:44 PM PST

            [ Parent ]

    •  You are making the Admin (8+ / 0-)

      of a Social Security Group almost too easy, between you and Scott Hochberg of SSS I am practically golden!

      I bow in both your directions.

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

      by Bruce Webb on Sun Feb 20, 2011 at 02:23:31 PM PST

      [ Parent ]

    •  I'm normally a big fan of sticking it to the rich (14+ / 0-)

      since they spend their entire lives sticking it to everyone else.

      But even the rich bastards paid their money in, and they should get it out.  Fair is fair, and fairness still means something to me, even if it means nothing at all to the rich bastards.

      •  I'm with you (0+ / 0-)

        Call me a DLC sellout (I'm not), but I'm glad to see an FP diarist finally acknowledging that the idea of means-testing might have seemed appealing to some of us.

        I think this diary makes a good case against means-testing, and I'm starting to be convinced. But up till now I've felt like I'm supposed to be against it reflexively, and my attitude of "soak the rich; what's the problem?" automatically made me a RW shill.

        I'm never going to collect SS anyway, since I've never made more than 20k in a year, and lots of years it's been 5k or nothing. I'm slated to collect about $100 a month. Cabo, here I come!

        To me, the program doesn't seem very progressive—it's seems like it only pays benefits to those who are already middle-class, and I've never managed to claw my way into that bracket.

        "This too shall pass." --anon

        by Blank Frank on Sun Feb 20, 2011 at 03:17:28 PM PST

        [ Parent ]

      •  "Sticking it to the rich" (2+ / 0-)
        Recommended by:
        denise b, vigilant meerkat

        The thing is that means testing really wouldn't even do that.  Giving up a $2000/month check isn't exactly going to be traumatic to a multimillionaire, after all.

        The real problem is that means testing would inevitably end up sticking it to the middle class.  What do you want to bet that the folks seeing their benefits reduced would include those who are inside the current SS payroll cap of $106k, but in the upper half of that range.  And if you cut the benefits for someone who was making, say, $75k/year, for that person, the monthly Social Security check is likely to be a significant chunk of their retirement nest egg -- even if they were careful savers, Social Security is still likely to be around half of their retirement income.  Possibly more than that, if their investments tank at the wrong moment.

        And, really, that's the intent of those who are trying to undermine Social Security -- kill the ability of the middle class to count on the program, and support for Social Security will dry up quickly.  So in order for means testing to do what it's supposed to (undermine support for the program), it has to hit the middle class.

        Political Compass: -6.75, -3.08

        by TexasTom on Sun Feb 20, 2011 at 03:51:50 PM PST

        [ Parent ]

      •  We don't need to stick it to the rich on this (2+ / 0-)
        Recommended by:
        shaharazade, Bluefin

        The rich should pay their fair share of income tax including a more reasonable rate of capital gains, a more reasonable estate tax, and should not have a special tax break on income above $500,000 per year.  In that case, our government would not need to tamper with Social Security and Medicare ENTITLEMENTS (including to the rich) to pay for running the government, a couple of immoral, unfunded wars, and cleaning up the mess they made when they (including Bill Clinton) allowed Phil Gramm to cram down our throats the deregulation of Wall Street gamblers.

        What Washington is doing is nothing but trying to confuse people about what we have already paid for and what should be delivered, including to the rich, trying to make us think it's more like "welfare" than something we're ENTITLED to receive.

        I'm quite sure that even Sasha and Malia understand that if they pay for something, they're ENTITLED to receive it.

        Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

        by RJDixon74135 on Sun Feb 20, 2011 at 04:22:15 PM PST

        [ Parent ]

      •  Plus It's a Trojan Horse (3+ / 0-)
        Recommended by:
        denise b, shaharazade, Bluefin

        As this article pointed out there is no savings in excluding only the top 2% earners. The only way it could save money is to exclude a lot of Americans who will need it in retirement. Pretty much any American with a household income below $100,000 who has no pension and only 401k and personal savings to fall back on is unlikely to be able to maintain anything approaching a traditional middleclass life style without SS, so we are talking about 80-90% of Americans. With us heading for a third of the population old enough to be retired, what will happen to an economy driven by spending when all of the retirees are broke?

        I think the goal is to start means testing everybody out of SS until the only people left are the very poor, thus turning it into the senior version of Medicaid, at which point it will have no support and can be shut down. With the lower birthrate and the babyboomers mass retirement, we could be well looking at a labor shortage with the next decade or so. I think the powerbrokers are trying to force a lot of Babyboomers to remain in the labor force until they die so that we don't return to a 90's style labor market where the workers are the ones calling the shots.

    •  Means testing is a vehicle which the (10+ / 0-)

      extreme rightwing want to use to deny people who draw upon more than one pension in retirement to lose benefits, much like taxing the so-called cadillac insurance policies.

      Many of us have been required by law to also pay into state plans besides the federal SS, leaving much less disposal income to savings.  And neither plan alone is enough to survive monthly expenses.

      There may well be a very few people who collect a large monthly sum from multi pensions, but they are few and far between.

      Humankind cannot stand too much reality. T.S. Eliot

      by blueoasis on Sun Feb 20, 2011 at 02:30:49 PM PST

      [ Parent ]

      •  Means testing would also be a (8+ / 0-)

        the beginning of sliding down a slippery slope.  

        We can see that we are already going to have to fight for every pension benefit, that has already been committed, to every union worker.

        Corporations would love to use means testing to get out of their contracts too. Each year benefits would be ratcheted lower and lower.

        What has been promised must be paid, we might need to close 100 of our 175 military bases offshore, so be it.

        It also is a divide and conquer strategy on the part of the Rethuglicans. Once you start excluding people who have already paid in, and say their benefits will now be reduced, support for the whole program goes out the window.

        This is an excellent diary Joan.

        My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

        by pvmuse on Sun Feb 20, 2011 at 03:39:16 PM PST

        [ Parent ]

      •  It's not a different perspective (3+ / 0-)
        Recommended by:
        Frankenoid, shaharazade, David Kaib

        on means testing, it seems to me. It's a different issue, but an important one. Need to spend more time in it when I've dispensed with my NN duties. But I'll be back.

        When it becomes "uncivil" to call out liars, lying becomes free. -- Rick Perlstein

        by Joan McCarter on Sun Feb 20, 2011 at 02:41:47 PM PST

        [ Parent ]

      •  Frankenoid, thank you for your excellent (2+ / 0-)
        Recommended by:
        shaharazade, Bluefin

        explanation.  I've tried to explain this myself on several previous occasions, but possibly because my explanation was never as good as yours, I've been met with no small amount of disbelief.  I recognized as a single working mother that I could expect to draw a much smaller total benefit than a male making the same salary and paying the same SS tax, but with a wife at home doing his laundry and getting his dinner ready. I always felt cheated by that.

        However, it didn't work out quite that way. Now, I've been married for many years to a retired teacher who never paid in to either SS or Medicare. He doesn't get any spousal benefit from my SS account because of a formula used to exempt a percentage of his state pension from the spousal benefit he could draw which, in the end, wipes out his spousal benefit entirely, but he does qualify for Medicare as my spouse just like a wife who never worked outside the home and/or never paid in to Medicare could do.  I admit to feeling somewhat  satisfied by that outcome.

        I can only imagine what family values Republicans would say about changing the spousal benefits provision given the kind of thing that's happening now in MD -- cutting Head Start because (paraphrasing) women should stay home and educate their own children instead of expecting the state to do it.

        Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

        by RJDixon74135 on Sun Feb 20, 2011 at 05:15:08 PM PST

        [ Parent ]

    •  The solution is obvious so of course (3+ / 0-)
      Recommended by:
      RJDixon74135, Bluefin, CarolinNJ

      no one in power seems to be willing to do it.  
      On the right, people want to undermine Social Security so it crashes and dies.  On the left (well, actually the center, there are too few on the left who have any power) people have either bought into the stupidity, are afraid the public has bought into the stupidity, or are, as always, too ready to compromise with right wing hard-liners.  
      And I completely agree that means-testing will kill Social Security.  If the people with resources get nothing out of it, the first time there's a financial "crisis," Social Security will be gone.  

      If, in our efforts to win, we become as dishonest as our opponents on the right, we don't deserve to triumph.

      by Tamar on Sun Feb 20, 2011 at 02:51:09 PM PST

      [ Parent ]

    •  Re "All in this together" (0+ / 0-)

      If you believe we are "all in this together," then I think you should also be in favor of everyone, even the poor, paying income taxes (as the poor do, I believe, in the United Kingdom).

      Personally, I do not mind if Social Security is seen as a form of welfare. After all, wasn't that its original intention? If the choice is no Social Security or Social Security as a welfare program, I will take the latter any day.

  •  Absolutely correct. Social Security (21+ / 0-)

    is structured perfectly. Yes, the funding structure is regressive, but the benefit structure is progressive. Those who are always paid below the cap will pay in a larger percentage of their income than those who earn above the cap. But the benefit formula works in reverse, giving lower wage earners a higher percentage of their pre-retirement income in their benefit than higher wage earners.

    •  If it ain't broke.... (12+ / 0-)

      Though I fear we've lost the "it isn't broken" war.

      When it becomes "uncivil" to call out liars, lying becomes free. -- Rick Perlstein

      by Joan McCarter on Sun Feb 20, 2011 at 02:14:54 PM PST

      [ Parent ]

      •  We have lost the battle, not the war (10+ / 0-)

        Time for a counter offensive.  Any time someone says Social Security is broke or is going to run out of money, any liberal or Democrat needs to stop the conversation and correct the speaker (hear that Lawrence O'Donnell?).  Whenever someone lets this kind of statement go by, listeners assume it must be true because no one challenges it.  It is time to make sure the record is kept straight.

        We are entitled to our own opinions. We're not entitled to our own facts. -- Senator Al Franken

        by Do Something on Sun Feb 20, 2011 at 02:26:31 PM PST

        [ Parent ]

      •  I'm not so pessimistic. The President (5+ / 0-)

        Reid and Pelosi are all on message that SS does not need to be touched now. That means they won't be. I suspect that in 2013 there will be some small changes along the lines of the 1983 agreement, but must more modest. The only possible deviation will be a significant increase in the cap.

        •  But many of us are worried about the 2% (6+ / 0-)

          payroll tax holiday -- there will be tremendous pressure not to bring it back up to the original -- the Republicans will scream that the Dems are increasing taxes and the Dems will cave.  Then Social Security will be in trouble and the Republicans will be able to kill it off.
          It's like telling a normal healthy person that they're underweight and are going to die, then systematically starving them so they do die.  

          If, in our efforts to win, we become as dishonest as our opponents on the right, we don't deserve to triumph.

          by Tamar on Sun Feb 20, 2011 at 02:55:46 PM PST

          [ Parent ]

          •  Can't we get it back by raising the cap? (2+ / 0-)
            Recommended by:
            RJDixon74135, ozsea1

            I feel like this is Obama's gambit— do the holiday now, and when the time comes, replace the revenue by raising the $106k cutoff. I hope I'm right.

            "This too shall pass." --anon

            by Blank Frank on Sun Feb 20, 2011 at 03:24:45 PM PST

            [ Parent ]

          •  Yes, the 2% cut was (0+ / 0-)

            bad, but I don't see it as the precursor to anything. Look, I opposed the entire tax deal on policy grounds and think all the Bush cuts should have expired. The reason is that I don't buy the stimulus arguments. But the President thought otherwise and he saw the 2% as pure stimulus. He was also convinced of the policy of it.

            I think it will lapse in two years along with the wealthy tax cuts - if the President wins. If he doesn't it's Katie bar the door.

      •  The propaganda machine, (2+ / 0-)
        Recommended by:
        Gary Norton, Vtdblue

        well oiled with conservative/fundalist money and running smoothy 24/7.  Until we can figure out a way to insert a cog in self-perpetuating misinformation machine, we are doomed to defeat.

        Humankind cannot stand too much reality. T.S. Eliot

        by blueoasis on Sun Feb 20, 2011 at 02:34:47 PM PST

        [ Parent ]

        •  dKos is the cog (2+ / 0-)
          Recommended by:
          Curt Matlock, ozsea1

          if this site was a newspaper it would score way up there in terms of readership at over 500,000 daily visitors. Of course not everybody reads everything, then again there are lots of people who only pick up the NYT every day for the crossword puzzle, and the old SF Chronicle famously printed its sports pages in green so busy commuters could throw away those stupid news and "womens" sections and get to the important stuff.

          Joan's message is getting picked up everyday by the movers and shakers on the progressive side of Social Security defense in DC, that scrabbling you hear under your feet is us messengers (including me and DaveJ) helping shuttle those messages back and forth. If you too want your voice actually heard submit a diary to the group below or just make sure to add the 'social security' Tag to any diary. You are not just shouting down the well, not anymore, people are listening. And certainly to Joan.

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

          by Bruce Webb on Sun Feb 20, 2011 at 02:57:14 PM PST

          [ Parent ]

          •  I certainly wasn't at all diminishing (2+ / 0-)
            Recommended by:
            pvmuse, ozsea1

            the effectiveness of the blogsphere and DK in their efforts, or I wouldn't be reading and posting here.  We are doing what we can and doing it well.  But the problem is still largely is a matter of proportion of disinformation and misinformation on all levels of communication in the country as a whole.

            Humankind cannot stand too much reality. T.S. Eliot

            by blueoasis on Sun Feb 20, 2011 at 03:16:13 PM PST

            [ Parent ]

      •  But a two percent reduction this year is the (2+ / 0-)
        Recommended by:
        Gary Norton, RainyDay

        first step in breaking it.

        It will be easier down the road to say, sorry just not enough money to pay out benefits.

        My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

        by pvmuse on Sun Feb 20, 2011 at 03:40:55 PM PST

        [ Parent ]

        •  It is a 30% reduction in SS taxes! (1+ / 0-)
          Recommended by:
          RainyDay

          It is a cut of 30% in the money you are personally paying into Social Security. If you are like me, you contribute some money into a 401K, lets say 9%. Now lets say you decide to cut your savings rate by only contributing 6%. You can tell yourself you are not investing only 3% of your money, but the fact is you just cut your retirement contribution by 30%.

          Don't buy the right wing framing that it is "just 2% of your money." These right wing propagandists are masters of playing games with numbers and percentages. They play these games with tax cuts all the time. When it is convenient they put tax cuts into dollar totals, as when they tell you how much money you are saving. When it isn't convenient, in how much more money a rich person is getting in tax cuts, suddenly they only talk about percentages, saying the rich are getting the same exact percentage cut as you.

          Everything I write is within a margin of error of precisely 100%.

          by Bailey Savings and Loan on Sun Feb 20, 2011 at 03:51:46 PM PST

          [ Parent ]

    •  Good point about the benefit structure, (1+ / 0-)
      Recommended by:
      Joan McCarter

      though I still say we should find a way to raise or even remove the social security tax ceiling and replace it with a floor.

      Yeah, well, you know, that's just, like, your opinion, man.

      by NMDad on Sun Feb 20, 2011 at 02:18:54 PM PST

      [ Parent ]

  •  But we actually aren't in it together anymore (16+ / 0-)

    at least not while the PAYROLL TAX HOLIDAY exists...

    FDR was brilliant when he put our taxes into the system but Obama took them OUT of the system and there really is no telling if they will EVER be put back.

    Maybe that was the real reason and the plan behind the payroll tax holiday...take OUR stake out and you can basically gut the system.

  •  Given this recent news (11+ / 0-)

    I have to wonder why ANY employed person in this country would want to privatize SS. It is the ONLY source of stable income many of us will have to rely on in retirement.

    http://online.wsj.com/...

    Raising the payroll tax cap is the common sense choice.

    "When the going gets weird, the weird turn pro." Hunter S. Thompson

    by SNFinVA on Sun Feb 20, 2011 at 02:13:42 PM PST

    •  I posted this on FB last night (2+ / 0-)
      Recommended by:
      jimreyn, MrJersey

      It generated 3 comments, all essentially saying "Gee, I thought I was the only one this wasn't working for."

      Which is the whole point. Individual accounts - especially in this grossly under-regulated environment - make it easier for the Financial Sharks to separate you from your money.

      The so-called "rising tide" is lifting only yachts.

      by Egalitare on Sun Feb 20, 2011 at 02:30:38 PM PST

      [ Parent ]

    •  That WSJ article (0+ / 0-)

      I don't entirely agree with it.  The heart of my disagreement is this:

      It assumes people need 85% of their working income after they retire in order to maintain their standard of living, a common yardstick.

      It may be a common yardstick, but that doesn't make it an accurate one.  Really, that 85% figure is a scare tactic from the financial industry, and shouldn't be taken seriously.

      The big item ignored by that 85% metric is that your need to save money for retirement goes away once you're actually retired -- and I'd be willing to bet that anyone who can hit that 85% benchmark is saving a lot of their income in order to get there.  And let's face it, if you're saving 25% of your income before you retire, you wouldn't need to replace more than 75% of your working income in order to maintain your standard of living.  Probably somewhat less, since you'll no longer have work-related expenses (ie, commuting).

      If you're a homeowner and able to pay off your mortgage before you retire, that's another chunk of income that doesn't need to be replaced after retirement.  For families with kids, the costs associated with those kids also don't need to be replaced.

      My point isn't that everything is sunshine and retirement will be great for everyone -- but just that the 85% replacement metric is unrealistic, and can instill a sense of hopelessness in individuals who are actually do quite well in preparing for retirement.

      (Obviously, the above applies to those who are comfortably middle class -- because, let's face it, someone making $20k/year isn't going to be in a position to save anything for retirement and is going to be totally dependent on Social Security.  That's a real problem -- unlike the challenge of people making $100k/year to replace 85% of their income after retirement, which is just scare nonsense from the financial industry.)

      Political Compass: -6.75, -3.08

      by TexasTom on Sun Feb 20, 2011 at 04:04:35 PM PST

      [ Parent ]

      •  The larger point is this... (0+ / 0-)

        The stock market is not a reliable place to keep retirement funds, especially in this climate of deregulation. Which renders the privatization argument pretty much invalid, because what we're talking about with Social Security is the stability of the investment.

        How much one should save for retirement is a complex calculation at best, as every person has different requirements and expectations.

        "When the going gets weird, the weird turn pro." Hunter S. Thompson

        by SNFinVA on Sun Feb 20, 2011 at 07:18:44 PM PST

        [ Parent ]

  •  I wish the deficit hawks would (11+ / 0-)

    stop talking about social security as if it was a major factor contributing to the deficit or as if it was an entitlement.  In fact I wish they would leave it out of deficit discussions altogether.  Social security contributes nothing to the deficit, it is self-funding and while it may need some tweaking, it is quite healthy. Working people have earned social security, dammit! It's a government insurance policy that works far better than private insurance. The only impact it has had on the deficit is that the government has used it as a slush fund to lessen the effects of deficit spending. If they privatize it or otherwise destroy it, they are killing the goose that laid the golden egg.

    A society grows great when old men plant trees in whose shade they know they shall never sit. -Greek proverb

    by marleycat on Sun Feb 20, 2011 at 02:14:06 PM PST

    •  As if two wars (11+ / 0-)

      and the massive Bush tax cuts didn't have anything to do with it.

      I share that frustration with you.

      When it becomes "uncivil" to call out liars, lying becomes free. -- Rick Perlstein

      by Joan McCarter on Sun Feb 20, 2011 at 02:19:25 PM PST

      [ Parent ]

    •  Not quite self-funding. (0+ / 0-)

      This year its running a nearly $80 Billion deficit (SS revenue vs Outlays)

      http://www.nytimes.com/...

      The article makes not a $29 Billion deficit but I've read a more comprehensive analysis that puts it nearly 80.   If I can find the link I'll post it.

      "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

      by soros on Sun Feb 20, 2011 at 02:27:53 PM PST

      [ Parent ]

      •  It is self-funding. (6+ / 0-)

        Not in any given year, but overall.  Receipts have exceeded outlays since the 80's, so that the system now has a  $2.6T surplus in the trust fund.

        This is by design, to account for the coming years when the boomers retire and annual receipts lag behind outlays.  The surplus will maintain current benefits for all projected retirees through 2037.

        •  The trust fund is mostly fiction.. (0+ / 0-)

          And I'm being generous here.    Just because SS has a trunk load of bonds doesn't mean that its funded.   Someone or some group of people has to fork up the cash for the those bonds, when they're turned in.  

          Guess who that would be?   You and I.  

          My reform of the system would to be replace those trust fund bonds into real world resources.   Instead of bonds the government would stockpile oil, gold, silver, rare earth elements, etc... things will real value in the world, not just paper.  The trust fund would be backed up by real assets that could be sold on the open market to fund pension benefits.

          "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

          by soros on Sun Feb 20, 2011 at 03:33:29 PM PST

          [ Parent ]

          •  Why are those treasury notes "junk bonds" (3+ / 0-)
            Recommended by:
            wsexson, RainyDay, David Kaib

            when held by the Social Security trustees, and inviolable legal obligations when held by Chinese Communists and Saudi Terror Financiers?

            Seems like some group of the American political class has loyalties stronger than to the American worker.

            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 Sun Feb 20, 2011 at 03:52:41 PM PST

            [ Parent ]

          •  Bullshit! The trust fund exists! (2+ / 0-)
            Recommended by:
            wsexson, RainyDay

            It exists same as any legal loan since the beginning of time! My god what a steaming pile of crap.

            Flim Flam Grifter 101:

            Q: What is the easiest way to rob a bank?

            A: Convince the rube the money is already gone.

            Everything I write is within a margin of error of precisely 100%.

            by Bailey Savings and Loan on Sun Feb 20, 2011 at 03:55:31 PM PST

            [ Parent ]

            •  Yes... the trust fund exists. (0+ / 0-)

              We're in agreement on that point.

              But ask yourself this... if everybody stopped paying taxes right now how much would that trust fund be worth.

              I'll give you the answer because its really easy.

              ZERO

              "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

              by soros on Sun Feb 20, 2011 at 05:10:40 PM PST

              [ Parent ]

          •  I'm confused (1+ / 0-)
            Recommended by:
            David Kaib

            You're OK with contributing "worthless" paper money into the system, but you want the government to hold something more tangible to pay your benefits?

      •  That's a good article - informative, but (1+ / 0-)
        Recommended by:
        RainyDay

        what I take away from it  is that the system is still pretty healthy.  My understanding is that it needs tweaking, not slaughter, to ensure the ability to pay benefits past 2037.

        A society grows great when old men plant trees in whose shade they know they shall never sit. -Greek proverb

        by marleycat on Sun Feb 20, 2011 at 03:05:12 PM PST

        [ Parent ]

      •  Only if you discount the Trust Fund to zero (7+ / 0-)

        Social Security ran a $72 billion surplus in 2010 using the standard scoring.

        The $45 billion 'deficit' reported by the MSM isn't made up, it is just using a scoring method not typically used and builds the premise that the $2.6 trillion in the Trust Funds doesn't 'really' exist into its conclusion. As in "We already stole the money" and "SUCK on THIS!" Well that is only as true as we let it be. That $2.6 trillion AND its interest belongs to you and me and not the Koch brothers or Peter Peterson, don't buy into their framing. Social Security projects to run surpluses until 2023 and the drawdown after that it a planned feature and not a bug.

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

        by Bruce Webb on Sun Feb 20, 2011 at 03:07:32 PM PST

        [ Parent ]

      •  Which is why it was insane to reduce (3+ / 0-)
        Recommended by:
        soros, RainyDay, marleycat

        contributions by 2% this year.

        My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

        by pvmuse on Sun Feb 20, 2011 at 03:44:45 PM PST

        [ Parent ]

      •  The reason for any shortfall the fund may (0+ / 0-)

        sustain this year is mostly due to the high unemployment. Unemployed people don't pay in.  It's one more reason the greedy thieves in Washington need to get their minds off of Social Security and onto jobs, jobs, jobs.

        Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

        by RJDixon74135 on Sun Feb 20, 2011 at 06:13:54 PM PST

        [ Parent ]

    •  ... as if it was an entitlement ... (2+ / 0-)
      Recommended by:
      marleycat, David Kaib

      I agree with you, marleycat, but I think we should start by rehabilitating the word "entitlement."  Those of us who paid into Social Security and Medicare for decades are entitled to receive the benefits for which we paid.  I have no idea how the word first took on a negative connotation, but it really doesn't apply.

      Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

      by RJDixon74135 on Sun Feb 20, 2011 at 06:11:27 PM PST

      [ Parent ]

  •  Agree. (5+ / 0-)

    It also penalizes the not so rich who managed to scrimp and save for their retirements, because they figured social security wouldn't be enough.

    Fox News is a Religion.

    by Bush Bites on Sun Feb 20, 2011 at 02:14:54 PM PST

    •  Fewer and fewer (7+ / 0-)

      of us can even manage that scrimping and saving. Which makes SS even more essential.

      When it becomes "uncivil" to call out liars, lying becomes free. -- Rick Perlstein

      by Joan McCarter on Sun Feb 20, 2011 at 02:18:23 PM PST

      [ Parent ]

    •  err... (0+ / 0-)

      why should they be penalized??

      "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

      by soros on Sun Feb 20, 2011 at 02:24:24 PM PST

      [ Parent ]

    •  The means testing I saw had low cutoff (2+ / 0-)
      Recommended by:
      Bruce Webb, CarolinNJ

      The model I saw, the means testing would only benefit people who were making less than twenty thousand per year. Virtually everyone else would see their benefits dramatically cut.

      Everything I write is within a margin of error of precisely 100%.

      by Bailey Savings and Loan on Sun Feb 20, 2011 at 02:25:34 PM PST

      [ Parent ]

      •  Taxing of social security benefits (1+ / 0-)
        Recommended by:
        denise b

        currently begins at a low income level.

        From above

        It's important to recognize, though, that there is already a progressive earnings test built into the system, in that higher income retirees pay income tax on a portion of their benefits,

        Those considered higher income are singles with greater than $25,000 in income and married couples with more than $34,000.  (Taxes and your social security income.)  Those are not exactly high flier incomes.

         50% of social security benefits may be taxable for a single with between $25,000 and $34,000 in income and 85% of the benefits for a single with over $34,000 in income.  For a married couple, the triggers are $32,000 and $44,000.

        Taxing of benefits for some recipients began with the revisions to SocSec made in 1983, which also raised caps and the retirement age.  The defining amounts for the triggering of taxation of 50% of benefits haven't changed since then.  The addition of the second 85% of benefits occurred in 1993.  Note that neither were tied to inflation, so what may have seemed a reasonable starting point in 1983 no longer seems "high income" in 2011.

        And, to add one more twist,  income as defined for these calculations includes usually non-taxable income such as interest on muni bonds, thus making them somewhat less valuable to retired folks.

        All of this was a pretty slick way to funnel social security $$$s to the general fund.

    •  And by penalizing it, (0+ / 0-)

      it discourages it. Why would you even want to save if it will be offset by reductions in benefits?

      Religion is what keeps the poor from murdering the rich. -- Napoleon Bonaparte

      by denise b on Sun Feb 20, 2011 at 11:12:27 PM PST

      [ Parent ]

  •  Joan, I don't know what (16+ / 0-)

    you are eating for breakfast, but keep eating it because since we've been on 4.0, you are scoring A+ on all your essays.  Don't misunderstand, I've always enjoyed your writing, but I believe you have stepped it up a notch!
    It's been incredible.
    Thank you.

    What if the hokey pokey is what it's all about?

    by Julie Gulden on Sun Feb 20, 2011 at 02:19:04 PM PST

  •  the Trust Fund (1+ / 0-)
    Recommended by:
    marleycat

    is all in treasury bonds.

    The intent is to createa a adefault so SSA will lose claim to those bonds.

    George Bush is Living proof of the axiom "Never send a boy to do a man's job" E -2.25 S -4.10

    by nathguy on Sun Feb 20, 2011 at 02:19:19 PM PST

  •  Excellent post! (7+ / 0-)

    I work with B2B PAC, and all views and opinions in this account are my own.

    by slinkerwink on Sun Feb 20, 2011 at 02:20:09 PM PST

  •  I couldn't agree more. (8+ / 0-)

    If we start messing with Social Security by introducing a means test, even partially, we are inviting inevitable trouble.

  •  current rate, no cap? (1+ / 0-)
    Recommended by:
    cocinero

    Has anyone done the accounting on keeping the rate 2% lower but lifting the cap making the tax flat on all incomes?  Is that a political winner?

    Passive renunciation is not the whole of wisdom.

    by play jurist on Sun Feb 20, 2011 at 02:21:59 PM PST

  •  Time to break SS out of the general budget (5+ / 0-)

    I am tired of hearing how Social Security adds the the deficit.  It does not, in fact ever since O'Neill and Reagan raised the payroll tax, Social Security has made the deficit look smaller because it has been running a surplus.  It is time to make Social Security stand alone, no longer hidden in the larger general spending.  And an accurate accounting of how much the general account owes Social Security should be published every month.  Social Security is not part of the problem and it is long past time to make that clear to everyone.

    We are entitled to our own opinions. We're not entitled to our own facts. -- Senator Al Franken

    by Do Something on Sun Feb 20, 2011 at 02:22:10 PM PST

  •  Means testing is a trojan horse for SS (4+ / 0-)
    Recommended by:
    Bruce Webb, TexasTom, MrJersey, ozsea1

    No progressive should support it, and Joan makes the clear case why not to.

    There are a lot of ways to ensure the long term security of the program past 2037, starting with raising the payroll tax limit from $108,000.

    Enacting means testing would drastically effect the opinion of Social Security among the public in a negative way because people could claim that it actually resembles socialism.  As set up, SS is an insurance program (again, as Joan mentions) that if one's investments don't pan out or their savings are wiped out by unexpected medical bills, they can still avoiding living in poverty.

    "Give me a lever long enough... and I shall move the world." - Archimedes

    by mconvente on Sun Feb 20, 2011 at 02:23:05 PM PST

    •  No, actually, many of them can't. SS benefits (2+ / 0-)
      Recommended by:
      mconvente, David Kaib

      aren't by themselves enough to keep many of its beneficiaries out of poverty.  Ask me, I know.

      •  Then that just means raising the income cap... (0+ / 0-)

        even more

        "Give me a lever long enough... and I shall move the world." - Archimedes

        by mconvente on Sun Feb 20, 2011 at 03:30:09 PM PST

        [ Parent ]

        •  Raising the income cap and raising benefits aren't (1+ / 0-)
          Recommended by:
          RainyDay

          fully linked.  There are several large issues with SS that need to be addressed but instead we've allowed ourselves to be chastised and lectured to like children.  I think it's time, past time, for the left to formulate an offensive strategy, with supporting tactics, to force the right into defense.  Enough with this ducking and dodging along the ropes.  Jab, jab, hit.  Jab, jab, cross.  Jab, jab, combination.  C'mon, folks, come off the ropes and fight.  

          Let's start with millionaire/billionaire fair tax rates:  higher.  Let's take up the wrinkle in the tax code that allows hedge fund mangers to pay taxes on "capital gains" rather than income.  Let's publicize the origin of the 401 (k) subsection of the tax code and how that allowed corporations to shift retirement benefits responsibilities to employees.  Don't respond to lies, discipline yourselves to stay ON MESSAGE.  We're being beaten to death with a simple tactic we could have taken for our own and we keep behaving like school kids caught out at something hinky.  WE haven't done anything wrong!

  •  Eliminating the ceiling (3+ / 0-)
    Recommended by:
    TexasTom, craiger, coffeetalk

    would also mean the rich would receive more benefits when they start collecting, correct?   That would seem only fair.

    "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

    by soros on Sun Feb 20, 2011 at 02:23:11 PM PST

    •  hear hear (2+ / 0-)
      Recommended by:
      soros, schnecke21

      If not, then it's just a backdoor means test.

      Also, I don't see the point in raising the ceiling before 2037 when the program actually needs the money, otherwise it's just additional surplus to be siphoned off to cover the deficit in the general fund.

      "They let 'em vote, smoke, and drive -- even put 'em in pants! So what do you get? A -- a Democrat for President!" ~ Faster, Pussycat! Kill! Kill!

      by craiger on Sun Feb 20, 2011 at 02:34:43 PM PST

      [ Parent ]

      •  What I'd propose... (0+ / 0-)

        ...is raising the ceiling gradually over the course of a couple decades, until the cap is completely gone in 2037.

        Political Compass: -6.75, -3.08

        by TexasTom on Sun Feb 20, 2011 at 04:05:57 PM PST

        [ Parent ]

        •  need that "lock box" thingamabob (1+ / 0-)
          Recommended by:
          TexasTom

          That's fine if we first deal with this issue of deadbeats who want to default on the SS Trust Fund. As long as they have a chance of winning this debate, any SS surplus revenues collected today are just throwing good money after bad.

          "They let 'em vote, smoke, and drive -- even put 'em in pants! So what do you get? A -- a Democrat for President!" ~ Faster, Pussycat! Kill! Kill!

          by craiger on Sun Feb 20, 2011 at 05:41:23 PM PST

          [ Parent ]

        •  It will never happen (0+ / 0-)

          If we can't even undo the Bush tax cuts on the rich, how are we going to get them to pay FICA on all their income?

          Religion is what keeps the poor from murdering the rich. -- Napoleon Bonaparte

          by denise b on Sun Feb 20, 2011 at 11:17:47 PM PST

          [ Parent ]

    •  Exactly correct (4+ / 0-)
      Recommended by:
      soros, denise b, wsexson, Robobagpiper

      While the payout is progressive (in that lower income earners receive more in benefits per dollar of income taxed), you can't raise the cap on income taxed without also raising the corresponding cap on benefits paid.  If you do, you gut the very same "everybody gets what they paid for" aspect of SS and subject it to attack as welfare, where the rich pay for the benefits of lower earners.  That is exactly what FDR warned against -- it was supposed to be a "you get what you pay for" system where the retirement benefits you are paid are based solely on the amount of income you "insured" through SS -- i.e., the amount of income on which you paid taxes.  

      •  We already don't get back what we pay (0+ / 0-)

        into it, as you note, and yet the overwhelming majority of people support SS. The important thing for political support is that it works for everyone and that what you get is partly a reflection of what you pay.  

        Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

        by David Kaib on Sun Feb 20, 2011 at 02:57:47 PM PST

        [ Parent ]

        •  Which is why raising the cap has to mean (2+ / 0-)
          Recommended by:
          soros, Robobagpiper

          raising benefits.  If you do one without the other, you will increase the chasm between what you pay in and what you get out.  There absolutely needs to be some reasonable connection between the two, or SS turns into "welfare" and becomes subject to attack on those grounds.  

          The small additional amount you would get by raising the cap without also increasing retirement benefits is not worth the political fallout, for the very reasons outlined in this diary.  It is simply, as has been said, a back-door means-testing, and would be attacked on the same grounds.  

          A reasonable solution would be to increase the cap, say to $180,000 and increase the retirement benefits proportionately.  That would raise some revenue, because the retirement payout is somewhat progressive.  But if the cap is raised, there absolutely needs to be an increase in benefits to retain the connection that FDR was so insistent on.  

          •  I think the connection (1+ / 0-)
            Recommended by:
            ozsea1

            does not need to be nearly as close as you seem to think. The overwhelming majority of people are unaware of the cap, let along know what it is, or what the ratio is between what we pay and what we get. They support it because it's fair generally.  They know that because most people know people who are getting benefits, it they are not themselves.  Those interactions are very powerful in influencing how people think about the program.  It's why elite efforts to undermine popular support have failed. (Note this process can't work with things like TANF, which many people will not have any experience with).  The small bore details of the program cannot overcome this knowledge.  Program details almost never matter for public support of government programs.

            Even if we eliminate the cap entirely and raise the benefits for those below the cap, there would still be a reasonable relationship between what you pay and what you get.

            Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

            by David Kaib on Sun Feb 20, 2011 at 03:16:44 PM PST

            [ Parent ]

    •  If this is true (0+ / 0-)

      Then how would it help shore up SS?

      •  shore up ss ?? (0+ / 0-)

        the diary claims everything is hunky dory.. dont fiddle with it !!!

        "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

        by soros on Sun Feb 20, 2011 at 03:35:48 PM PST

        [ Parent ]

        •  The article doesn't say that (0+ / 0-)
          That promise has been fulfilled for the past 75 years and can continue to be until 2037, according to the 2010 Trustees' report, with no changes to the system.

          Eventually some changes will be required.

      •  Because... (1+ / 0-)
        Recommended by:
        craiger

        ...the payout formula is progressive.

        Lower income recipients will receive more of their money back in SS payouts than upper income recipients.

        The formula, as I recall, replaces the first X dollars (where "X" is somewhere around $9,000) at 90%, but drops the marginal replacement amount down to 15% for those near the current cap.  If you maintain that 15% marginal replacement rate as the cap is increased, you generate more revenue from the cap increase than you'll pay out from the benefit increase.

        Political Compass: -6.75, -3.08

        by TexasTom on Sun Feb 20, 2011 at 04:08:58 PM PST

        [ Parent ]

    •  Depends. (1+ / 0-)
      Recommended by:
      ozsea1

      CBO scores it both ways:

      http://cboblog.cbo.gov/...

      along with 28 other options

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

      by Bruce Webb on Sun Feb 20, 2011 at 03:22:11 PM PST

      [ Parent ]

  •  The only thing Social Security needs (5+ / 0-)

    is a raise in the cap for taxes to cover baby boomers -  and for the Treasury to repay what it took out.  The money is supposedly  in a Trust Fund.

    And yes, the payroll holiday would not be what I would have preferred.  We MUST keep our eyes on that and get ahead of the curve preparing the public for their renewed obligation to help pay for their pension.  Don't forget that business also got a tax break here - so will fight tooth and nail.

    Medicare and Medicaid do cost current dollars and it is irresponsible journalism based on right wing philosophy to conflate Social Security with them.

    Let's break our dependence on foreign goods and our multinational masters. Shop American. May Peace Prevail

    by revgerry on Sun Feb 20, 2011 at 02:23:12 PM PST

  •  "Those earning the most money..." DO NOT PAY TAXES (5+ / 0-)

    Well, not as much as they should as we all know thus this is not surprising at all.

    About Social Security, let me go over the "means testing" figure and focus in what is relevant:

    A nation that spends trillions in wars and military equipment without much if a rational justitication or funding, can afford to deliver benefits to those who have paid for them.

    Pretty simple.

    •  They DO pay "as much as they should" (3+ / 0-)
      Recommended by:
      denise b, Robobagpiper, ozsea1

      in SS taxes, because of that tie that FDR set up -- If you insure $106,000 (by paying SS taxes on it), your retirement benefits are based on that $106,000 -- whether you earned $106,000 or $200,000.  

      The place for true progressivity -- where the rich pay for those with less income -- is in the income tax.  SS was set up so that you get benefits based on the amount of income you insure -- i.e., the amount of income on which you pay SS taxes -- regardless of income.  

  •  You hit this one out of the park, Joan (4+ / 0-)

    The funding structure is regressive but SS's benefit structure is already progressive with the political backing to truly make it stronger.

    The only case I would make for lifting the cap as of now is to $180,000 to capture 90% of wages again because of income inequality the Greenspan Commission didn't anticipate or care about. Despite that, and finding a way to stop the shortfall in SSDI, SS should be left alone.

    Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin

    by priceman on Sun Feb 20, 2011 at 02:26:33 PM PST

    •  Clarification(I endorse everything you said): (0+ / 0-)

      I do lean towards eliminating the cap eventually(I didn't mean to us the word 'only'), but I would rather wait til later via 2037 while raising it to $180,000 now(if possible if we are going to do anything with SS) as the 1983 deal miscalculated income equality in wages as only about 84% are funding SS as opposed to 90% falsely predicted.

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

      It will be quite a political battle as you say so a slight tweak up to $180,000 seems plausible if we are talking about anything now and Nancy Altman is right; Obama's tax cut deal does threaten SS, especially the payroll tax cut as Democrats have never allowed the payroll tax rate to be cut, even temporarily, in the history of the program, because payroll taxes feed the Social Security trust fund and create the political base of support for the program.

      You are my favorite FP.

      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin

      by priceman on Sun Feb 20, 2011 at 02:57:50 PM PST

      [ Parent ]

  •  Bad analogy (0+ / 0-)

    "The justification for denying benefits to people who have paid taxes into the system is also questionable. We do not deny interest payments to wealthy owners of U.S. Treasury bonds"

    No, but we also don't increase payments to bondholders who are injured, widowed, etc.

    SocSec is basically a forced insurance program disguised as a payroll tax. There is nothing wrong in principle with not paying benefits for the well off, just as in any insurance scheme. Oddly, the argument that it isn't worthwhile to (essentially) tax those making more than $250K reminds me of another debate on a closely related proposition not so long ago. And the thought that it isn't even possible to figure out to whom this applies is even more problematic.

    •  In what insurance program is this the case? (4+ / 0-)
      There is nothing wrong in principle with not paying benefits for the well off, just as in any insurance scheme.

      What kind of insurance doesn't pay benefits based on the wealth of the policy holder?

      •  The poster said "well off" not "wealthy" (0+ / 0-)

        All insurance programs work that way.

        People buy car insurance, but they never get money back unless they get in a car accident.

        People who buy health insurance don't get their premiums back if they never use their insurance.

        •  That does not appear to be what hmi meant (0+ / 0-)

          Not to me anyway.

          There is nothing wrong in principle with not paying benefits for the well off, just as in any insurance scheme.

          "Just any insurance scheme" does not deny people the benefits they have paid for on the basis of their being well-off.

          Religion is what keeps the poor from murdering the rich. -- Napoleon Bonaparte

          by denise b on Sun Feb 20, 2011 at 11:26:19 PM PST

          [ Parent ]

      •  What do you receive from fire insurance (1+ / 0-)
        Recommended by:
        David Kaib

        if you never have a fire?

        Whom do you blame more? The rattlesnake, or the bipartisan guy who put it in your sleeping bag?

        by chuckvw on Sun Feb 20, 2011 at 04:01:55 PM PST

        [ Parent ]

    •  Completely agree (0+ / 0-)

      I understand the argument that means testing could weaken it politically, but it wouldn't make it welfare.

      Nobody thinks of car insurance as welfare, right?

      •  Certainly it makes it welfare (0+ / 0-)

        Insurance policies don't decide not to pay you off because you don't need the money. If some people pay in but get denied benefits because of their financial status then you no longer have an insurance program.

        Religion is what keeps the poor from murdering the rich. -- Napoleon Bonaparte

        by denise b on Sun Feb 20, 2011 at 11:29:46 PM PST

        [ Parent ]

        •  Social Security is poverty insurance (1+ / 0-)
          Recommended by:
          hmi

          It depends on how you view Social Security. Is it a pension or is it insurance? Well, the fact that the benefits received isn't equivalent to the contributions suggest it's not a pension.

          If it's insurance, what are we insuring against? Poverty.

          If some people pay in but get denied benefits because of their financial status then you no longer have an insurance program.

          Of course you do, because what you're insuring is financial status.

          If you have car insurance and you don't get in an accident, you don't get your money back.

          If you have insured against poverty, and you're not poor, why would you expect to receive payment?

  •  SS already has a means test of sorts. (2+ / 0-)
    Recommended by:
    denise b, RainyDay

    The present SS benefit is not thought  taxable, but only up to a limit  Counting all income, single persons whose aggregate income plus SS is over twenty five thousand dollars, a bit more for couples, finds that half of the SS becomes taxable income at the next penny, and eighty five percent when the aggregate is above $34,000, a bit more for couples.  

    The tax on half of 25,000 is about ten percent, and it goes up from there. This is interesting because at this point in time, if that law is not reviewed and adjusted upward, COLA will take a good many middle income SS recipients into the  seriously taxable zone.  

    There is thus a substantial tax penalty involved in receiving SS above an amount that is for single people a bit over twice national poverty level. Forget pensions on top, because the taxable amount is half  or eighty five percent plus the pensions, which is not an inconsiderable sum to have your pension reduced,  when you're suposed to be retired.  There are even provisions for withholding from SS in the standard forms.

  •  Seems like there is money (5+ / 0-)
    Recommended by:
    RaulVB, RainyDay, esquimaux, ozsea1, marleycat

    for the military to sponsor NASCAR, to start a war, to lose trillions in Iraq but nothing, I tell you nothing has caused such huge debt as SS. Bull crap.

    The talk of deficits is disgusting -- no one talks of the lack of revenue, why we are in debt, the wars, why oil companies need subsidies. No, it is because of Medicare and SS, which are funded by payroll taxes. Do people forget that they are the revenue source for it...that they are stealing our money?

    That is why I am glad they are protesting in WI, I hope people begin to wake up --- we have been asked to "sacrifice" but it seems like it is never enough they just want to take more.  

    Every difference of opinion, is not a difference of principle. Thomas Jefferson

    by coffejoe on Sun Feb 20, 2011 at 02:29:15 PM PST

  •  If we raise the income ceiling above $106K, (2+ / 0-)
    Recommended by:
    craiger, coffeetalk

    don't we also have to raise the benefit amounts that these individuals receive upon retirement, in order to reflect their increased contributions?  If we don't do so, aren't we being inconsistent with your main thesis?

    If we do raise the income ceiling, and the resulting benefits for these people, will the net fiscal balance still improve?  If so, how high do we have to raise the ceiling in order to eliminate the system's long-term projected imbalance?

  •  They already means test it (3+ / 0-)
    Recommended by:
    denise b, RainyDay, ozsea1

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

    If you are retired and make over $34K (single) or $44K (married) up to 85% of your social security payment will be taxed.

    That is a means test. You give part of your social security back to the government via a tax if you have a certain amount of income (and notice how LOW the threshold is!).

    This is the camel's nose Reagan put under the tent in 1983, and I would not be surprised if this was the mechanism they would use to reduce social security benefits down the road.

  •  Thank you (2+ / 0-)
    Recommended by:
    esquimaux, ozsea1

    There is lots of talk about lowering benefits but never anything about lowering the payroll withdrawals. The end effect is once again the middle and lower classes pay more in taxes. It is like tell you that that $6.00 can of coffee cost the same even though you now only get 12 oz. instead of 16 oz.

    I will tell you what needs to happen. We need to raise the amount that is subject to withholding and LOWER the age SS starts to at least 60-62 years old. The truth is, there aren't going to be as many jobs in America as there has been in the past. By lowering the retirement age, jobs vacated by retirement will be available to younger workers, while maintaining at least a portion of the buying power of the retiree. The economy gains velocity and grows.

    If the people on the Hill have their way, we stay at say 7% unemployment with younger workers unemployed or under employed. The aging population either hangs on to there jobs for dear life, move into a shelter or back home with their children.

    The last part is why there is no savings in cutting SS. Even now me and my girlfriend pay anywhere from $60-$100 a month on her aging parent's prescriptions. If their SS benefits are cut, we have to contribute even more to them. There is simply no savings there for us. In fact the SS withdrawal stays the same from my check but I have to contribute more to my girlfriends parents. I lose big time, as will the next generation when we retire.

    Does the America of the future let their parents live on the streets or do they support them...if we have a job?

    There is a very real cost in cutting benefits that I think eats away most if not all of the savings.

    It is possible to read the history of this country as one long struggle to extend the liberties established in our Constitution to everyone in America. - Molly Ivins

    by se portland on Sun Feb 20, 2011 at 02:35:24 PM PST

  •  Even in a kleptocracy, looters are criminals and (1+ / 0-)
    Recommended by:
    Vtdblue

    deserve to be dealt with as such. The Republic Party and its DINOs need to be resisted by any means necessary in this entitlement crisis.

    Präsidentenelf-maßschach; Warning-Some Snark Above "Nous sommes un groupuscule" join the DAILY KOS UNIVERSITY "makes Beck U. and the Limbaugh Institute look like Romper Room"

    by annieli on Sun Feb 20, 2011 at 02:44:24 PM PST

  •  Baby Boomers and the SS Trust Fund (6+ / 0-)

    In the 80's Reagan and Tip O'Neill put together a fix for the long term problems that were foreseen for Social Security.  The fix was basically to take SS from a pay-as-you go program to one were the payroll tax generated a surplus.  The surplus was to be reinvested in Treasury Bonds and used as an investment in the country to grow the economy.  And it actually worked pretty well.  With the tax increases that Reagan, Bush 1 and Clinton put into place and the revenue from SS, by 2000 the government had stopped borrowing from the market and had begun to pay off the non-SS bonds.  If left alone by 2010 it is likely that the outstanding debt would have been very low and the country would be in shape to begin to borrow back from the market to pay off the SS bonds as they were needed to fund the boomers' SS benefits.  Instead Bush and the GOP took this money and through huge tax cuts to the rich, transfered it to them.  Now we have the mess we have.  The tax cuts of 2002-2003 were basically a raid on the SS trust which we baby boomers had been building for our retirement.  Now they come along and tell us, sorry we have to cut your benefits and raise the retirement age because SS is busted.  It is not and the truth is that we need to go back to those who benefited from the Bush raid on the fund and say  "time to give it back".  Raise the cap on taxes, it is simple and fair.

    We are entitled to our own opinions. We're not entitled to our own facts. -- Senator Al Franken

    by Do Something on Sun Feb 20, 2011 at 02:44:29 PM PST

  •  Spot on (2+ / 0-)
    Recommended by:
    Dragon5616, ozsea1

    This diary is absolutely correct.

    Ironically, a great many of the short-sighted voters who now cheer the idea of cutting benefits to those in "the future" will arrive at retirement with no savings.  This is why SS was devised to begin with.  

    Being elderly and impoverished is terrifying.

  •  Dick Durbin today on Meet the Press (1+ / 0-)
    Recommended by:
    ozsea1

    said,

    Social Security does not add one penny to the deficit . Social Security untouched will make every promised payment for more than 25 years. But the deficit commission was given a charge, add 75 more years of solvency to Social Security . It came up with an approach. I think, frankly, another commission , Pete Domenici and Alice Rivlin 's commission , came up with a better approach. We need to move on Social Security , but let's put it on a track that runs parallel but separate to deficit reduction. The Social Security program, as it's currently put together, does not have any impact on the deficit.
  •  I don't understand how lower wage earners (0+ / 0-)

    get a higher return on contributions than higher wage earners.

    That seems to contradict all the statements about social security being akin to an annuity or insurance program.

    If that were actually true, I would expect a strong relationship between payin and payout.  If there were a strong relationship between payin and payout, then everbody would get the same return on contributions.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Sun Feb 20, 2011 at 02:47:10 PM PST

    •  There is a strong relationship (2+ / 0-)
      Recommended by:
      floundericiousMI, RainyDay

      Very roughly speaking,  your retirement benefits are based on a percentage of the wages on which you paid ss taxes.  the formula is a bit more complex (that link is to the govt's benefits calculator) but the amount of retirement benefits is based on the wages on which you paid SS taxes.  

      That percentage is slightly higher if the wages on which you paid taxes where, say $30,000 than it is if the wages on which you paid taxes were, say, $100,000.  

      The wages on which you pay taxes are capped at $106,000.  The wages on which your benefits are calculated are also capped at $106,000.

    •  Because the benefit calc is weighted (5+ / 0-)

      toward the lower end of the earnings scale.

      Take your average monthly earnings for the 35 highest-earning years of your career.  Your monthly SS benefit  will be:

      90% of the first $761, plus
      32% of the amount between $761 and $4,586, plus
      15% of the amount over $4,586

    •  Do a little pricing of life insurance plans (2+ / 0-)
      Recommended by:
      coffeetalk, Vtdblue

      10x the benefits cost more than 10x the premium, even in the private insurance market.

      In this way, SS is no different, with a flat contribution and a regressive benefit.

      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 Sun Feb 20, 2011 at 03:58:56 PM PST

      [ Parent ]

      •  I just went to intelliquote to check your (0+ / 0-)

        assertion, comparing the prices for $250K and $750K plans.
        Not only was the premium/$100k nearly the same, but the bigger plan was a slightly better deal.

        Perhaps you're thinking of a different kind of instrument.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Sun Feb 20, 2011 at 04:06:52 PM PST

        [ Parent ]

        •  Your vendor may vary (0+ / 0-)

          I did the same thing, and found the result I cited.

          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 Mon Feb 21, 2011 at 06:23:06 AM PST

          [ Parent ]

  •  A certain amount of means testing is already (0+ / 0-)

    built in to Social Security, albeit in a limited way.

    Those who retire before the full-retirement age must return 50 cents of benefit received for every dollar earned over -- I think it's about $14k.

    It doesn't touch wealth or unearned income, but it is a form of means test.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Sun Feb 20, 2011 at 02:49:58 PM PST

  •  The Moral Argument for Progdressive Taxation (3+ / 0-)

    is the the thing that needs to refined, repackaged and resold to the American people.  If that get's done than things like raising the cap on SS taxes is easy.  In fact the whole cut spending versus raising revenue debate becomes much saner.  Right now the anti-government and anti-tax people get away with saying that a flat tax is fair and everyone agrees and nods their heads - when in fact it is not fair.

    Real Patriots serve Jury Duty.

    by David in Burbank on Sun Feb 20, 2011 at 02:52:09 PM PST

    •  Progressive taxation (2+ / 0-)
      Recommended by:
      wsexson, Robobagpiper

      belongs in the Income tax context.  SS was supposed to be wage insurance -- your benefits are calculated based solely on the amount of wages you "insured" (pay taxes on).  Progressivity was not supposed to be a major issue in SS taxes, because too much progressivity subjects SS to attack as "welfare" rather than keeping it as a "you get what you pay for " (roughly speaking) system.  

  •  Means Test by another name (0+ / 0-)

    As McCarter points out the weakness of the present SS system is that it exempts higher earners (above $106k) from withholding.   This is a reverse Means Test that places a heavier burden on lower wage earners.  SS will only be fair when A) contributions are assessed on first to last dollar of income, and B) America returns to a more steeply progressive income tax which will ensure justice for lower wage earners while levying just taxation on higher earners to reflect the disproportionate advantages they gain from the financial system.  At that point percentages of contributions can be lower while benefits for all will be raised with a reasonably disproportionate amount going to the lower wage earners.

    •  No, it's not (1+ / 0-)
      Recommended by:
      Robobagpiper

      Say worker A earns $106,000 and pays taxes on $106,000.  His retirement benefits are calculated based on $106,000.  Worker B earns $200,000, and pays taxes on $106,000.  His retirement benefits are calculated based ONLY on those wages he "insured" through SS -- i.e., $106,000.  He receives exactly the same retirement benefits as Worker A.  There is no "reverse means test" there.  It's  insurance -- you insure a level of wages, and your premiums (your taxes) and your payout (your retirement) are both keyed to the level of wages you "insure."  It was not meant to be "progressive" in the sense of the rich paying for the benefits of lower earners.  There's a little bit of that in that the payouts at $106,000 are a bit less per dollar of earnings than the payouts at $50,000.  But two people who both "insure" $106,000 get EXACTLY the same in retirement benefits.  There is no transfer of wealth to upper earners.  

    •  The cap doesn't protect high incomes from (0+ / 0-)

      taxation. It prevents high incomes from being insured. You have it backwards.

      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 Sun Feb 20, 2011 at 04:00:13 PM PST

      [ Parent ]

  •  Joan, just reposted to (1+ / 0-)
    Recommended by:
    Situational Lefty

    The Amateur Left group. Hope that's o.k.  Great diary!

    Conservatives are] engaged in one of man's oldest exercises in moral philosophy; ...the search for a superior moral justification for selfishness. JK Galbraith

    by Vtdblue on Sun Feb 20, 2011 at 02:54:51 PM PST

  •  If you're going to talk about how the rich (2+ / 0-)
    Recommended by:
    coffeetalk, Dragon5616

    contribute a lower percentage you should at least mention how their benefits are capped as well.

    That quote about GDP by Robert Kennedy

    by erichiro on Sun Feb 20, 2011 at 02:56:18 PM PST

  •  End free ride for $106K (0+ / 0-)
    What makes more sense than penalizing older Americans for their wealth--after they've paid into the system--is to tax them more while they're earning. Don't decrease or eliminate their benefits from a program they've paid into--increase their contribution to the program while they're earning. As of this year, Social Security taxes are paid on about 86% of an individual's earning, up to $106,800. Earnings above that magic $106K mark are not subject to the payroll tax.
  •  Disagree with this (0+ / 0-)
    It turns Social Security from what is essentially an insurance program into welfare.

    I'm not necessarily in favor of means testing, but means testing doesn't turn SS into welfare.

    You even called SS what it is - insurance. It's insurance against poverty.

    Think of any other type of insurance. Car insurance or health insurance, for example. Not everyone gets back what they paid in, in premiums. And we certainly don't feel obligated to make sure that happens.

    The people who end up needing the insurance get the benefits. And everyone buys in the insurance because we don't know who is going to need the benefits.

    I understand that means testing makes SS more subject to political attack, but it doesn't make it welfare.

    •  Welfare is not a factual term (1+ / 0-)
      Recommended by:
      RainyDay

      it's a political one. The issue isn't whether SS becomes welfare as a fact (i.e. in the way it is factual to say SS is an insurance program).  The issue is whether it would be thought of as welfare, or like welfare - i.e. geared towards protecting the poor instead of all of us.

      Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

      by David Kaib on Sun Feb 20, 2011 at 03:21:00 PM PST

      [ Parent ]

      •  But if the alternative is raising the payroll tax (0+ / 0-)

        Then it's subject to the same attacks.

        •  There are no programs (0+ / 0-)

          that are considered welfare because of their funding structure. What they all have in common is that they are only available to to the poor.

          The payroll tax cap was eliminated on Medicare some time ago - it didn't change how people viewed the program.

          People like progressive taxation. They think its fair.  

          Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

          by David Kaib on Sun Feb 20, 2011 at 09:34:46 PM PST

          [ Parent ]

    •  But insurance payout is never based on (3+ / 0-)
      Recommended by:
      RainyDay, Robobagpiper, schnecke21

      ability to pay, but instead is based on the value of what you insured, which in turn sets your premiums.  

      Let me give you an example I know all too well, since I'm in New Orleans.  Federal Flood insurance is capped at $250,000.  My house pre-Katrina was worth more than $250,000, but all I could insure was $250,000.  Say my neighbor's house was worth exactly $250,000.  Even though my income was higher and my house was worth more, our premiums were essentially the same (since what we insured was a $250,000 value in the identical risk area) and our payout was exactly the same -- $250,000, even though that fully covered my neighbor's house and did not fully compensate me for the loss of my house.  

      That's pretty much what the SS cap is like.  You insure $106,000 regardless of whether you make more, and your payout is based on what you insured, so people who make more than $106,000 get exactly the same retirement benefits as someone who made $106,000 because they insured (paid taxes on) the exact same level of wages.  

  •  Excellent. Back doors to means testing... (2+ / 0-)
    Recommended by:
    Dragon5616, ozsea1

    Back doors to means testing exist in multiple Democratic proposals.

    The Dec. '10 proposal from Center for American Progress,  Building It Up, Not Tearing It Down A Progressive Approach to Strengthening Social Security proposes establishing one rate for basic universal benefit and a higher rate for the poor. Tiers are mean testing.

    Gene Sperling, the Presidents new adviser, has written CAP proposals for the universal 401k and increased benefits for the poor in the past.

    I believe means testing for Medicare is the sweet spot they're all moving toward and Social Security is easier, believe it or not, to begin with,

    The means-test, no matter how logical it may appear, is death by a thousand cuts. Annual fights will be about changing the formula to eliminate more and more beneficiaries.

    No changes to the just, fair, functional SS structure without protecting it in the Constitution first.
     

  •  Means testing is just a way to frame SS as (1+ / 0-)
    Recommended by:
    ozsea1

    welfare.  It's a very short hop from welfare to workfare:  end welfare as we know it, make them work.  Been done before, it can be done again with SS.  

    In any case, the poor, working or otherwise, will get squeezed just the same.  The middle class has done to the poor what the upper class has done to the middle class.  As they say in the Army, shit slides downhill.

  •  I used to think means testing... (4+ / 0-)

    ... would be a good thing, when I thought about rich people getting Social Security while poor people struggled to survive on their tiny monthly check. But over the past few years -- after reading up, and listening to arguments like yours -- I've come to see why means testing would actually be harmful to the system. And so, now I would no longer support it.

    And I totally agree that the income that is subject to SS withholding should increase... actually there should be NO ceiling, of you ask me. That could make a big difference.

    But one thing I think COULD be done, that I haven't heard much discussion of, is this:

    On your annual Social Security benefits statement, have a single, simple question: "Would you like to donate a portion of your benefits to a fund to help provide larger monthly checks to low-income retirees?"  If you check "yes", you then list either a certain dollar amount, or a percentage. You'd be able to change this at any time.

    All the money collected from this would be put into a fund, and divided among all low-income recipients... the lower the income, the more is added to their checks. I realize that since there are a lot more poor retirees than rich ones, this wouldn't make a gigantic difference. But it would make SOME. An extra $50 a month for a rich person means nothing. But I can guarantee you that an extra $50 a month to an old man or woman now getting $700 a month would be HUGE.

    Am I wrong? Am I missing something here?

    "Any dictator would admire the uniformity and obedience of the U.S. media." -- Noam Chomsky

    by ratmach on Sun Feb 20, 2011 at 03:23:24 PM PST

  •  17 syllables (0+ / 0-)

    most precious resource
    beyond set-aside monies
    the trove of stored trust

    posting weekly political haiku on my diary, and one new haiku a day at www.HaikuDiem.com

    by HaikuDiem on Sun Feb 20, 2011 at 03:39:44 PM PST

  •  This is not accurate (1+ / 0-)
    Recommended by:
    RainyDay
    Social Security taxes are paid on about 86% of an individual's earnings

    Taxes are paid on 100% of an individual's income up to $106k, and 0% over $106k.

    Cumulatively, the tax affects 86% of all income.  But everyone pays SS tax...the vast majority (making less than $106k) pay it on all of their income, and a small number pay it on something less than 100% depending how much they make beyond the $106k threshold.

    The only individuals paying taxes on "86% of their earnings" would be those making $123,256 per year.

  •  Means test on both ends or don't (0+ / 0-)

    But there's no reason that you should stop paying in after 106,000 or whatever the limit is this year unless you're means tested on the benefits.

    Pay in to unlimited income amounts and pay out to all.

    All kidding aside - it's the f'ing oligarchy, stupid.

    by nightsweat on Sun Feb 20, 2011 at 03:45:15 PM PST

  •  the way I explain it (0+ / 0-)

    is that Means Testing opens the door,

    to a "slippery slope".


    Also "Fair is fair"

    is a very good principle for most things in life.


    thank you Joan McCarter for the informative post.


    I dream of things that never were  -- and ask WHY NOT?
    -- Robert F. Kennedy

    by jamess on Sun Feb 20, 2011 at 03:57:01 PM PST

  •  Raise the cap and do not means test... (0+ / 0-)

    With more money coming into the SS fund, use that money for investing in American businesses and put the return back into the fund.  That leverages the funds and makes payback to those who paid a lot more sensible and fair.

  •  raise the limit (0+ / 0-)

    Currently FICA is very regressive.  The issue could be solved by raising the income limit.

    To Dare is to Do!...Tottenham Hotspur slogan

    by randyhauser on Sun Feb 20, 2011 at 04:02:07 PM PST

  •  What you're arguing for is (0+ / 0-)

    a flat SS tax on all earnings with a maximum cap on benefits--in other words, no matter what the "formula" produces as a benefit, one couldn't receive more than a stated amount.

    This change would tilt SS more toward a "welfare" program, but would certainly solve any solvency problems.

    Also, hasn't there been talk of leaving a doughnut hole of paying no additional SS taxes between $106,000 and $250,000?

    When it comes to Democrats, criticize, don't demonize.

    by Dragon5616 on Sun Feb 20, 2011 at 04:29:39 PM PST

  •  We made $350K+ and got $30K child support from SS (1+ / 0-)
    Recommended by:
    tardis10

    First, let me say I think this is ridiculous and have written to Senators Klobuchar and Franken about this quirk in SS more than once.

    But, you may ask, how is this possible? I call it the SS Trophy Wife benefit. My husband and I got married when I was 35 and he was almost 50. We had three (awesome) children, the last born when my husband was 60. To our surprise, when he turned 65, we began to receive $800/mo per child under 19yo. Our youngest is now 15. We've put all of this into college savings, split evenly between them. My husband continued working full time for 5 1/2 more years and part time through last month and is now looking into consulting opportunities (he is a CIO).

    The only reason I can argue for this is that if means testing means that only less well off get benefits, that will make it even more likely to be slashed (like Medicaid, vs Medicare). But there is clearly a LOT of room for improvement.

    "All politics is national."

    by Auriandra on Sun Feb 20, 2011 at 04:45:53 PM PST

  •  Social Security is Insurance not at (0+ / 0-)

    "Benefit".  Please, let's use the correct terminology.  The "I" in FICA is insurance.  Proposing a means test would be like putting a means test on fire insurance for your house.  Let't take a look at your taxable income before we decide what your policy really pays after a fire.  That would be a crock of shit and so is means testing for receipt of benefits.

    Other threads have already discussed the perverse incentives for not saving for anyone on the edge (or likely to be so) of the "means test".  And of course once we establish the principle that a "means test" can be used to balance the SS books you can bet that it will come up every legislative session.  The Republicans want desperately to undermine trust in the system while not appearing to do so.  Democrats have made that easy for them.

    On consequence of the Democrats following the Right-wing frame of "Government can't do anything rights" is that it becomes very difficult to defend a system that appears to a low-information voter to not be working.  But government is vastly more efficient at insuring against financial hardship in old age than private industry could ever dream of being.  If Democrats don't start defending the idea that government has a legitimate role to play then we will all be serfs soon.  

    And please notice the right-wingers talking vigorously out of both sides of their mouths on this one.  They say the well-off wouldn't miss a reduction in their SS but the world will absolutely wobble out of orbit is we raise the SS tax cap.  Will someone in the media actually call bullshit on this?  Oh yeah, I live in the USA where the media just repeats whatever Cato and Heritage tell them to.

    The Long War is not on Iraq, Afghanistan, or Iran. It is on the American people.

    by Geonomist on Sun Feb 20, 2011 at 04:57:29 PM PST

  •  Scaring us, tell us to fear (0+ / 0-)

    Some simple facts about SS and the SSTF; we the people, paid hard earned FICA Taxes, into the SSTF and under congressional authorization, the SSTF director bought Special Security US Treasury Bonds, (they can be cashed in at anytime)  we the FICA tax Payers are owed $4.7 Trillion, or more.

     

    It’s not a deficit, they owe us and there’s $2.2, to $2.4 Trillion dollars in the trust fund in cash, right today.  It’s the General Fund and the US Treasury, which have a deficit problem, if we demand full payment for those Bonds; we bought, in full faith backed by the FULL FAITH and CREDIT of the US Government.


    See, they always start with fear and scaring us and never completely start at the beginning, when each President and Congress, have taken our hard earned money, in exchange for those SS Bonds and have never, ever planned to pay us FICA Tax Payers back.  Now if someone refuses to start at the beginning and only tells you, only to be afraid and scares you and lies to you, repeatedly about the truth and factual evidence, look behind the curtain, go the sources.

    The SSTF

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

    Stop with the Means testing talk, you don’t means test a surplus and a surplus is what SS and the SSTF is. Has anyone countered any scare tactic, with any of theses truths, that’s because, our Public, Private Pensions are all that stand between, complete and absolute control.

  •  Raising the cap would also be backdoor (0+ / 0-)

    means-testing because only a portion of the amount paid into SS above the cap would end up being redeemed in benefits, because benefits are capped. Any way you look at it, the only two ways of keeping SS solvent forever are to either make it more progressive, by lifting the cap, which makes it more like a welfare program, or making it more regressive, by decreasing benefits, which would be unfair to those who'll most need it. We will never be able to have a "pure" retirement insurance system that's enough for all to live on. Someone's going to have to get "shafted" in the end. Why not make it those who can most afford and will least be hurt by it?

    "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

    by kovie on Sun Feb 20, 2011 at 05:56:46 PM PST

    •  There is no one to one (0+ / 0-)

      relationship between benefits and taxes paid.  

      Lifting the cap would make the payroll tax less regressive, but it would not make it progressive - it would then be a flat tax.

      Also, progressive taxation has nothing to do with what gets categorized as welfare.  It should also be noted that the Medicare cap was lifted some time ago and it did not in any way change how people thought about the program.  What gets something categorized as welfare is one thing and one thing only - benefits are only available to the poor.

      Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

      by David Kaib on Sun Feb 20, 2011 at 09:30:52 PM PST

      [ Parent ]

      •  I'm still stuck (1+ / 0-)
        Recommended by:
        David Kaib

        on how allegedly "serious" people are still allowed to claim on TV that SS needs to be cut to lower the deficit. It's like changing the brand of motor oil you put in your car because your doctor told you to lower your intake of fat. We used to tar and feather people this stupid and dishonest. Now we call them "experts and "pundits" and pay them to salaries.

        Funny how I don't hear anyone call for not paying China or Dubai back all the money we owe them, because it's EXACTLY what's being called for with SS. And even if we did cut SS, it wouldn't kick in for 10-15 years at the earliest and would thus have zero effect on the deficit today. It's just like what's going on in WI, bait and switch lies on top of phoney or manufactured crises whose real purpose is to destroy the welfare state and the peoples' remaining power.

        We're approaching a REAL "tea party" moment in this country. Unlike those spoiled rich racist posers on the far right with their misspelled signs, we have genuine grievances with the power elite and we can't take it much longer.

        "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

        by kovie on Sun Feb 20, 2011 at 09:56:27 PM PST

        [ Parent ]

        •  Absolutely (1+ / 0-)
          Recommended by:
          kovie

          By the way, saw your comment at OL. Commenters have been congregating at http://olsurvivorsblog.blogspot.com/.  

          Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.

          by David Kaib on Sun Feb 20, 2011 at 10:29:16 PM PST

          [ Parent ]

          •  Thanks (1+ / 0-)
            Recommended by:
            David Kaib

            I'll try to check it out sometime, but OL is pretty much dead, sadly, even if its legacy lives on elsewhere. I'd love to see Paul start posting here and mixing it up with some of the more reality and truth-challenged types here.

            "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

            by kovie on Sun Feb 20, 2011 at 11:07:12 PM PST

            [ Parent ]

  •  Everybody Pays - Everyone Benefits (1+ / 0-)
    Recommended by:
    tardis10

    This is the answer to the question - why does Buffet get social security.

    The answer, of course, is that he paid into it, so he should get the benefit - just like every other American.  This is not a welfare program.  It's a safety net pension program.

    Buffet pays taxes owed on his social security benefits too - just like every other American.  In his case, though, the taxes are higher than most Americans', as they should be, because he makes a little more every year than you or I.

    FDR was the best President ever.  A true American and human being.

  •  Who Benefits by Unecessary Benefits? (0+ / 0-)

    "In fact, the administrative costs for the Social Security Administration (SSA) in trying to make income determinations, measuring need, and policing the system would be significant--potentially outweighing any savings in benefits. Take the example of Medicaid, which is means tested. Significant administrative resources have to be devoted to determining assets, and policing would-be recipients trying to hide those assets in order to qualify.

    "

    Fine, then take away policing of disabled people as to need.  Since they're disabled, they can't pay in.  Are we discriminating against disabled arbitrarily?

    No, this post looks like something I'd write if I was the owner of a casino, hellbent on keeping those surplus retirement dollars rolling into my table games and slot machines.

    Very smooth, very "humanitarian" and very slimey looking.  Several red flags flying around as you read.

  •  It's Fortunate (0+ / 0-)

    It was a stroke of luck, if nothing else, that they made this a payroll tax. Really, Social Security is a form of minimum wage. It requires employers to pay more so that their employees can live both while they are working and when they can't.

    Whether you think that the employee pays or the employer pays depends maybe on where you think the money comes from. Does it come from the employee working (and thus producing something of value) or from the employer providing capital (which allows the product to be made when maybe it couldn't be otherwise)? In either case, what Social Security (and Medicare, for that matter) do is to make employers in the aggregate pay enough that workers can survive when they retire, beyond the age when they could reasonably make money by working for it. Otherwise, the natural market rate for labor (wages) would be low enough that workers could not save for retirement and would die when they were unable to work.

    There's no need to make this system "progressive" in the sense of means testing it or changing the formula for taxing it. It is not a government program. It is a requirement for the private sector to pay enough that their workers can live not just when they are working but throughout their natural lives. If we think that workers in it don't have enough money then we need to raise the minimum wage. Raising the minimum wage is the best means of strengthening the system because it not only puts more money into the pockets of the poorest workers, it raises the amount of money going into Social Security (through the payroll tax) and the amount of money going into the federal and state budgets.

    We need to focus on supporting the minimum wage and strengthening Social Security by requiring employers to pay a higher percent and by raising the income cap. More at here and on the Dkosopedia Social Security framing page.

  •  Is this a schizophrenic post? (0+ / 0-)

    I found myself nodding along to the first half of this post, but the second half seems contradictory.  If we cannot limit benefits to high income earners (which I agree with, since this isn't a welfare program), how can you say those earning higher income should be taxed more unless you plan to also increase their benefits?  Isn't this just doing the same thing in a different way?  If you do plan to increase benefits to those paying increased taxes, that would do nothing for the longterm solvency of the program.

  •  One more thing (0+ / 0-)

    to be scared about.

    I have very little saved due to never making enuf money to put any away.

    What little I did have thru one job pension, was in the stock market, not by choice. So, I've seen that little nestegg eroded.

    I am going to be 57 in a month. Nine years to retirement.

    Currently, I barely makes ends meet. Nothing is going into savings or a pension. But, since I work, I am paying into SS.

    If they try to make me prove I need SS, in 9 years, or reduce my monthly check, it will force me into a very very desperate financial situation.

    What the heck is going on?

    Where is my voice in Washington DC? And don't get me started on healthcare reform.

    This country is going down the freaking crapper right before my eyes. And I can't seem to do a thing to safeguard my future.

    Helpless and pissed and panicked. I am reminded to make sure and vote in each election. Why? So that I vote for Democrats that turn on us anyway? Primary their asses? So far that isn't working out too well. I have 9 years of work time left, if I make it that long.

    What in heavens name do I do?

    We really need to come up with some plans, 'cause nothing seems to be working at the moment.

    Did you say peaceful protest? tell me when and where, and I'll be there.

    by karma13612 on Mon Feb 21, 2011 at 12:47:34 PM PST

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