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First, Social Security is fine. There's nothing to "save" it from, other than the greedy, cynical hands of senatoids and congresscritters who've become accustomed to scooping into the trust fund whenever they need a little extra cash, like little kids furtively digging into mom's purse.

That aside, if strengthening the solvency of the trust fund without paying back all the loot lifted from it is a priority, there are several paths open. Raise the contribution cap, raise the retirement age, means test recipients. . .

Or apply the FICA tax capital gains, dividends and the other main sources of income for wealthy Americans.

Not only are tax rates less than half for income derived from capital gains, dividends and other sources that don't involve actually going somewhere less comfortable than home and doing things you'd rather not for money, those sources are completely free of FICA taxes.

There has been some talk of narrowing the gap between income tax and cap gains tax rates, but any attempt to do so will assuredly set off a battle royale on Capitol Hill and K Street.

However, a modest nick in cap gains and dividend income to bolster Social Security might be more politically feasible in coming years, particularly if we give the 'Pubs the sound thrashing at the polls they so clearly need.

Should we not prevail in strengthening our position in Congress next month, however, developing a taste for Meow Mix might be advised.

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Comment Preferences

    •  Speaking truth to ignorance is not... (7+ / 0-)

      ...the Pragmatic WayTM to Get Things Done.

      Pull yourself up by your Mittstraps: borrow a few million dollars from your parents!

      by xynz on Tue Oct 02, 2012 at 06:45:14 AM PDT

      [ Parent ]

    •  We had to burn down the program to save it (21+ / 0-)

      Those of us alive during the Vietnam era are familiar with this sense of "saving" something.

      Lift. The. Cap.  That's the only necessary response to anybody concern trolling expressing concern about Social Security solvency.  Including those in our own party eager to burnish their "serious" credentials by screwing future retirees.  And we all know who that has included.

      For the love of money is the root of all evil; and while some have coveted after it, they have erred from the faith and pierced themselves through with many sorrows. (1 Timothy 6:10)

      by Dallasdoc on Tue Oct 02, 2012 at 06:56:24 AM PDT

      [ Parent ]

    •  You mean (5+ / 0-)

      instead of restoring the Social Security funding stream under the payroll tax?

      Making it a discretionary-funding program is a very very bad idea.  There's a reason it survived so long, and became the "third rail", which is precisely that it was NOT a "welfare" program.  FDR, under tyhe tutelage of Big Jim Farley, understood the ramifications of this.  If Social Security had been a welfare prograqm, how long ago would a pandering Democrat like a Bill Clinton have "ended Social Security as we know it" in order to pander to transient right-wi9ng political fads?

      Restore the funding.  (And yes, remove the cap, too!)

      Ever get the feeling you've been cheated?

      by ActivistGuy on Tue Oct 02, 2012 at 07:23:03 AM PDT

      [ Parent ]

    •  you haven't been paying attention (1+ / 0-)
      Recommended by:
      Crashing Vor
      Just wondering why I don't hear this more often when people discuss "saving" the program.
      dr's krugman & stiglitz have been saying it for years now, as have lesser known others. tweaking the law slightly (raising the rate or the income ceiling, for FICA) would ensure solvency for the next 50 years, at minimum. personally, i favor raising the income ceiling, so lower income people won't be adversely affected, but that's just me. it could be a combination of the two, i suppose.

      with respect to medicare, the ACA, and obama's $716 billion reduction in fee payments to provider's is a good start. re-doing the pharmeceutical plan, and allowing medicare to use its bulk buying power to lower costs would represent a huge savings all by its lonesome. if it's ok for wal-mart to use economies of scale to lower its cost of goods sold, why isn't it ok for the rest of us, through our government, to do the same?

  •  Abolish the premium for late retirement (18+ / 0-)

    Basically, when one retires, a value is calculated to be paid out by the time he/she reaches median life expectancy, i.e., just short of 80. If one retires at 67, that value is divided by 13 and then by 12 to arrive at the monthly benefit. Those who retire at 62 will by the age of 80 have received the same total payment as someone with a similar earnings history but spread over 18 years, and those who retire at 70 receive nearly twice the monthly benefit as the 62-ers they resemble.

    Here's the kicker: after median life expectancy, payments continue at the same rate. Doing the math, the one who retired at 70 and had received the same amount at 80 as the one who retired at 62 - at nearly twice the monthly payment, remember - will therefore receive nearly twice as much from 80 to 98 as the one who retired at 62 (based on identical earning histories).

    Who lives to be 98? The wealthy, the pampered, the 'managerial class'; working people die earlier.

    We should be encouraging older workers to get out of the way - i.e., retire - and leave the jobs for the people who can do them well and aren't just 'hanging on'.

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

    by Clem Yeobright on Tue Oct 02, 2012 at 06:22:34 AM PDT

    •  dunno, but it would sure be interesting (7+ / 0-)

      to see some reasonably accurate statistics on how many 'decent jobs' might be freed-up for our college grads & just younger workers in general who are currently unable to find work if SS eligibility age were lowered to 62...maybe even 60.

      "Show up. Pay attention. Tell the truth. And don't be attached to the results." -- Angeles Arrien

      by Sybil Liberty on Tue Oct 02, 2012 at 06:34:36 AM PDT

      [ Parent ]

      •  Very few employers will hire someone (1+ / 0-)
        Recommended by:
        Crashing Vor

        over the age of 50.  Once someone that age is laid off they've got one hell of a fight on their hands getting a new well-paid job.  And nothing, not even a lifetime of smoking, cuts your life expectancy as much as poverty.

        Demagogue: one who preaches doctrines he knows to be untrue to men he knows to be idiots.--H. L. Mencken

        by Ice Blue on Tue Oct 02, 2012 at 09:33:37 AM PDT

        [ Parent ]

        •  True. (1+ / 0-)
          Recommended by:
          Crashing Vor

          That's a dilemma that needs addressing. OTOH, if the unemployed 50-somethings had the skills & experience that would go missing if enough 60-somethings took early benefits, some employers might be willing to reconsider hiring them. They would be crazy not to.

          "Show up. Pay attention. Tell the truth. And don't be attached to the results." -- Angeles Arrien

          by Sybil Liberty on Tue Oct 02, 2012 at 09:42:48 AM PDT

          [ Parent ]

    •  GF had an interesting response to that: (11+ / 0-)

      Eliminating the premium for delayed retirement would encourage more to retire and get into the system at 65. The key to making removing the premium viable is to find the break-even point between savings from eliminating it and increased demands on the trust due to earlier retirees.

      We've been wondering how to get through the clutter and reach low-information voters. Mitt haz it.

      by Crashing Vor on Tue Oct 02, 2012 at 06:35:39 AM PDT

      [ Parent ]

      •  CrashingV - why cap gains, interest and dividends (0+ / 0-)

        are not included in SocSec withholding taxes.

        The entire foundation of SocSec is wage insurance, insuring a portion of your wages so that when you reach retirement age you have a reliable source of income. Capital gains, interest and dividends don't stop when you reach retirement age and are income streams unrelated to work, therefore you don't need to "insure" them.

        I do favor raising the annual salary amount subject to withholding to $150,000 and raising it annually until it reaches $200,000 and allowing proportionally higher SocSec payments based on the higher contributions. I do not favor removing the cap or capping the benefits, both of which would end SocSec as we know it and violate every principle upon which it was established.

        "let's talk about that"

        by VClib on Tue Oct 02, 2012 at 06:40:49 PM PDT

        [ Parent ]

    •  Health, United States, 2011 (4+ / 0-)

      a CDC publication, runs 500 pages, and includes useful life expectancy info by age, race, gender, education and economic status.


      By deferring collecting SS (as I did for two years), one makes a bet on one's longevity.  The SSA people have actuaries, you know, so the numbers are crunched to make it all revenue neutral.  Maybe I win out living longer than average; maybe I won't.  Abolishing this option won't actually change anything.  I chose the option simply because my SS benefit would be taxed while I still am working at my own little company.  It encourages me not to shut down as a business.  Please note that my major customer is the Chinese government, and I am a net exporter.

      So I for one believe this option is useful, and costs the government nothing.

      Raising the retirement age, however, is pernicious.  If you look at the mortality figures, the increase in life expectancy is skewed toward wealthier people (and surprisingly, Hispanics!).  Raising the eligibility age will adversely affect working class citizens, and especially those with physically demanding jobs.  Would YOU like to be digging ditches or carrying loads of bricks at age 70?  

      I also dislike means testing.  It just seems unfair to cut off benefits just because you have other sources of retirement income.  Instead tax SS benefits as income, as it is now when total income reaches as threshold.  That is fair.  SS IS INSURANCE, after all!  If you pay in over a lifetime, you deserve the benefit.

      Real plastic here; none of that new synthetic stuff made from chicken feathers. By the morning of 9/12/2001 the people of NYC had won the War on Terror.

      by triplepoint on Tue Oct 02, 2012 at 07:34:04 AM PDT

      [ Parent ]

    •  Those who retire later continue to pay into system (2+ / 0-)
      Recommended by:
      Crashing Vor, VClib

      The person who retires at 70 pays for 8 more years than the one who retires at 62, which significantly improves SS funding. This is especially important as the program is a pay as you go program, not an investment program.

      In addition, there are those who continue working past 62 who intend to retire at 70 who die before they reach 70 - they receive no benefits.

      The higher benefits from a later start to taking SS benefits stop increasing at age 70.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Tue Oct 02, 2012 at 08:53:26 AM PDT

      [ Parent ]

  •  Barack Obama Repeatedly Cited S.S. "Crisis" In (19+ / 0-)

    his 2008 campaign for office.

    When both party's leaders say there's a crisis --as they do in education-- you bet your sweet ass they are going to try to "solve" it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Oct 02, 2012 at 06:22:42 AM PDT

  •  'miss fancy pants' has no intention of sharing (5+ / 0-)

    her rations

    ...such a sense of entitlement, that one

    "Show up. Pay attention. Tell the truth. And don't be attached to the results." -- Angeles Arrien

    by Sybil Liberty on Tue Oct 02, 2012 at 06:23:39 AM PDT

  •  "Saving" is religious speak, in the same (9+ / 0-)

    ball park as "sacrifice" and "honor." It makes deprivation sound good.
    Now, there are people who argue that the whole thing is a bunch of hooey because, of course, our federal government is sovereign and issues all the money it needs. Taking it back merely serves to keep the money moving, i.e. circulating.  
    The problem we have now is that much of our money has stopped circulating.  When people use it to buy financial instruments, they're stinting us on goods and services.
    The financial engineers have "developed products," but calling something a product doesn't make it one, just as calling something a tool, doesn't make it one.
    Anyway, take a look at what L. Randall Wray has to say.

    We organize governments to provide benefits and prevent abuse.

    by hannah on Tue Oct 02, 2012 at 06:25:04 AM PDT

    •  recommend (1+ / 0-)
      Recommended by:
      Crashing Vor

      I watched this in the post about Romney being in the room when McCain was told about how bad the economic collapse could be in 2008.  Definitely worth watching if you want know more about fiat currency and the advantages of a sovereign currency.

      Government can't restrict free speech, but corporations can? WTF

      by kyoders on Tue Oct 02, 2012 at 06:44:28 AM PDT

      [ Parent ]

  •  years ago (8+ / 0-)

    It seems like it was 2 or 3 years ago (maybe a lot longer) that I was listening to NPR and they had somebody on that talked about this.  I can't remember who it was or even which show it was.  I think he specifically suggested a 5% additional tax on long-term capital gains dedicated to SS funding.  This would have brought it back to the previous level of 20%.

    Now that I think more, I think it was in the aftermath of Bush II's "mandate" in 2004 to privatize SS, so probably around the end of 2005/beginning of 2006.  The starting point of the discussion was about investing SS funds in the stock market.  The guest pointed out the many problems with doing this, especially the risk of losing value.  His suggestion was this special tax on capital gains that would be an indirect "investment" (way of increasing value) in the stock market.  It would also insulate SS from market losses.  At worst, there would be no "gains" if nobody made money from buying/selling stocks.

    I thought it was a hell of an idea, but I haven't heard or seen anything even close to that discussed since.

    Government can't restrict free speech, but corporations can? WTF

    by kyoders on Tue Oct 02, 2012 at 06:33:05 AM PDT

  •  As a practical matter, I'd like to see (11+ / 0-)

    both "payroll" taxes applied to all capital gains over $100,000 per year.  That way, we are not taxing the middle class more, but are capturing a resonable proportion of the passive income of "the investor class"

    Ultimately, the only thing that matters with respect to preserving choice is who will be nominating the next Supreme Court Justices.

    by Its the Supreme Court Stupid on Tue Oct 02, 2012 at 06:41:24 AM PDT

  •  "cynical hands of senatoids & congresscritters" & (1+ / 0-)
    Recommended by:

    our Grand Bargaining President Obama.

  •  To the filthy rich, the problem with Social (11+ / 0-)

    Security and Medicare, public utilities and public education is there is no profit for the filthy rich.  Imagine if we had arrived at the logical single payer Medical Insurance Program.  Everyone would have insurance at roughly half the per capita rate now (like in Japan, England and Canada) Savings would occur by reducing multiple redundant organizations and eliminating many CEOs with yachts.

    Never promote men who seek after a state-established religion; it is spiritual tyranny--the worst of despotism. It is turnpiking the way to heaven by human law, in order to establish ministerial gates to collect toll. John Leland

    by J Edward on Tue Oct 02, 2012 at 06:44:34 AM PDT

  •  I am shocked by the lack of understanding. (7+ / 0-)

    In my view, bad as the insane, fear-mongering politicos, are the voters who buy this stuff. It's not just the near glee that they bring to the argument that Social Security can't be saved, it's that they seem to have no freaking idea what the consequences of abandoning it would be. If seniors are lucky enough to have families who can afford it, they would live with them. So be prepared to have a huge financial burden put on you, as they won't have any money to pay for food, or medical care. And that spare room you have? Occupied, friends.

    The seniors who don't have family will first of all never retire until forced to, because of what they would face, which is dire poverty and dying in the streets. (are there no poorhouses? are there no prisons?)

    The only people who would escape this are the wealthy. Of course. And those who think that they have the resources to weather the situation, just think what one illness would do to your finances, especially if they manage to kill off medicare too.

    •  More than thirty years ago (4+ / 0-)

      I heard coworkers approaching middle-age crying about how social security wouldn't be there for them when they retired.

      They've been receiving their benefits for years now -- what was the crying about?

      Fear ginned up by propaganda, fueled by lack of information.

      The only elected official I hear clearly saying that SS is OK is Bernie Sanders. Everyone else is fear-mongering.

      "I've had all I can stands, and I can't stands no more." - Popeye the Sailor Man

      by congenitalefty on Tue Oct 02, 2012 at 07:34:21 AM PDT

      [ Parent ]

      •  The only way (1+ / 0-)
        Recommended by:
        Crashing Vor

        SS goes down is if the Congress destroys it. I think the most insane thing is that the people most likely to do so are backed by the "Tea party", many of whom are dependent on SS. This is a pretty good example of why it really isn't a real grass roots organization, but instead a corporate front.

  •  You will paid... one week after your funeral. (3+ / 0-)

    At which point the money will go to your duly designated rich person who bought and sold your Death Pool like playing cards for years.

    /wealthy fantasy

    I don't blame Christians. I blame Stupid. Which sadly is a much more popular religion these days.

    by detroitmechworks on Tue Oct 02, 2012 at 06:55:09 AM PDT

  •  Mainly the cap needs to be raised. (5+ / 0-)

    It has not been raised in a number of years.

    I can see advantages and disadvantages for collecting taxes on capital gains and dividends. Many middle income retired people supplement their Social Security with capital gains and dividends and an additional 15+% tax on those earnings would hurt them quite a bit. But a big exemption for the first $25,000 or so would make it so that those who could afford to do so are taxed and those who cannot are not.

    Other sources of income, such as some stock options, should be considered as compensation and therefore subject to FICA. (Some stock options are subject to FICA but some are not). I am sure there are many other loopholes for the wealthy to get around paying FICA.

    You can't scare me, I'm sticking to the Union - Woody Guthrie

    by sewaneepat on Tue Oct 02, 2012 at 07:09:42 AM PDT

  •  Fucking Grey Lady is flogging this again (6+ / 0-)

    a bipartisan group of senators is coalescing around an ambitious three-step process
    ... that, of course, involves cutting the insurance programs and then waiting for a unicorn, or the Republicans to support tax increases, whichever comes first.

    When you read "bipartisan group of Senators", prepare like you're Poland hearing about the non-agression pact.

    "There were questions that Governor Romney wanted to address to make sure people understood that he's not a felon" - Ed Gillespie (Romney supporter)

    by itswhatson on Tue Oct 02, 2012 at 07:18:29 AM PDT

  •  No means testing! (12+ / 0-)

    The minute you begin to means test, the program becomes "welfare," and the move to dismantle it starts in earnest.

    FDR himself wanted no means testing. If you pay in, you draw out. Period.

    No, I don't like it that John McCain draws Social Security, a Veteran's pension, and a special pension for his POW time, as well as his Senatorial salary, AND is married to a very wealthy woman. You'd think he wouldn't really need it.

    But it doesn't matter. He paid in; he gets to draw out.

    Once you take Social Security away from well-off people in a means test, they will agitate to make others who pay in without a possible draw resent the rest of us and eventually kill the whole thing. Some of us will ALWAYS need Social Security.

    No means testing.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Tue Oct 02, 2012 at 07:18:46 AM PDT

  •  First You have to "Save" it (3+ / 0-)

    from Mitty Romney and Paul Ryan.

    They want to fix the Leak in the Roof by knocking the
    Entire House down with a Bulldozer.

    No need to rebuild the House. The former occupants
    can sign up for one of those Spiffy FEMA trailers left
    over from Hurricane Katrina.   Such a Deal.

    On Giving Advice: Smart People Don't Need It and Stupid People Don't Listen

    by Brian76239 on Tue Oct 02, 2012 at 07:19:04 AM PDT

  •  This proceeds from a false assumption (3+ / 0-)
    Recommended by:
    MKinTN, Crashing Vor, ferg
    paying back all the loot lifted from it
    Is not how the trust fund works. The trust fund is not a bank account or pile of liquid wealth that gets "raided" by government.

    The trust fund is, and always has been, a collection of rainy-day assets held in treasury-bonds. When you buy a treasury bond, you by definition loan money to the government.

    If your Uncle Joe buys a treasury bond, do you say that it's "loot lifted from him"? No. You should worry, though, when people start talking about how redeeming that bond would "bankrupt" the country.

    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 Tue Oct 02, 2012 at 07:24:46 AM PDT

  •  A Very Easy Solution (0+ / 0-)

    A couple decades from now we have a demographic problem. But the solution (which was actually on the government web at the end of the Clinton administration) is quite simple. Comprehensive immigration reform.

    Most of the undocumented workers in this country are young. Bringing even a million of them into the social security system changes the demo enough to solve the problem.

    But of course, that makes (Republican) business owners who now cheat with undocumented workers responsible for their half of the 7.65 percent of the payroll tax, so dont' hold your breath for their enthusiastic support.

  •  Social Security is not welfare. If you turn it (3+ / 0-)
    Recommended by:
    Brooke In Seattle, Crashing Vor, ferg

    into welfare with a means test, it will lose support and will be cut. That's why Simpson and Bowles want social security to have a means test. Divide and conquer. Pit the poor against the middle class and both will lose.

    Brand new favorite RSS feed of Daily Kos Radio Podcasts
    Jobs, Jobs, Jobs

    by We Won on Tue Oct 02, 2012 at 07:33:55 AM PDT

  •  Obama does not have to cut a deal now (1+ / 0-)
    Recommended by:
    Crashing Vor

    Remember the deal that Boner thought the GOP got 98% of what they wanted.  Now it does not look that good to them, oh so sorry, the spending cuts are built in with the absence of a new deal and Obama has to do nothing and the taxes on everybody will go up on Jan 1.  Then in the time for a deal.

    Never promote men who seek after a state-established religion; it is spiritual tyranny--the worst of despotism. It is turnpiking the way to heaven by human law, in order to establish ministerial gates to collect toll. John Leland

    by J Edward on Tue Oct 02, 2012 at 07:39:43 AM PDT

  •  why do all the SS trustees (0+ / 0-)

    say there is a problem?

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