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(Click image to visit interactive budget tool.)

The United States may have serious longer-term fiscal problems, but Social Security is not chief among them. After all, the Social Security Trust Fund has a $2.7 trillion surplus and will continue to grow until 2021. Even though the population of Americans over 65 will grow by a third over the next decade, by 2035 Social Security's share of GDP is nevertheless forecast to increase slowly from just under to a little above five percent. Meanwhile, the program provides 40 percent of the cash income for American retirees, reducing the poverty rate among the elderly from 43 to just 9 percent.

These are just some of the reasons why President Obama's proposal to cut the growth of future Social Security benefits by moving to a different cost of living measure is so ill-advised. But there's one more argument against adopting the "chained CPI" (consumer price index). As you can see in detail below, raising the payroll tax cap from its current $113,000 to $200,000 will generate far more revenue and deficit reduction for Uncle Sam without trimming benefits for millions of seniors already so close to the edge of financial distress.

As David Cay Johnston explained, on its current trajectory Social Security will only be able to pay out three-fourths of its mandated benefits beginning in 2033. To address this future shortfall, Lori Montgomery of the Washington Post reported, President Obama:

[...] proposes to slow the growth of Social Security benefits through chained CPI, trimming cost-of-living increases by roughly three-tenths of a percentage point a year and saving the government about $130 billion over the next decade.
But as Johnston documented last year, there are no shortage of other approaches for putting Social Security on a sound footing for decades to come. Among them would be to raise the amount of income on which FICA payroll taxes are assessed:
One would be restoring the Reagan standard that 90 percent of wages are covered by the Social Security tax, which now applies to only 83 percent of wages. If we went back to the Reagan standard, the Social Security tax would apply to close to $200,000 of wages this year instead of $110,100.
As the New York Times reported in November 2010, that one change would produce $50 billion in new revenue in 2015 and reduce the deficit in 2030 by an estimated $100 billion. As the Times explained in its interactive "You Fix the Budget" tool (image above) here's how it would work:
When the payroll tax - which finances Social Security and Medicare - was created, it covered 90 percent of all income. Today, with a ceiling at $106,800, it covers closer to 80 percent. This option would gradually raise the ceiling, until 90 percent of income was again subject to the tax.
A variation is the one proposed by then candidate Barack Obama in 2007 and introduced to the Senate by Bernie Sanders (I-VT). Sanders' bill would impose the payroll tax on incomes above $250.000 a year, a move guaranteeing the program's future for 75 years. Either way, the Center for Economic and Policy Research (CEPR) suggested last May, we're talking big numbers here. All told, 8.3 million American workers make more than $110,000 a year; almost two million make over $250,000 annually.

According to the New York Times 2010 analysis, raising the payroll tax cap to its traditional 90 percentile wage ceiling would improve Uncle Sam's budget outlook more than just about any other Social Security alternative under consideration. The chained CPI option would save $21 billion in 2015 and $82 billion in 2030. (It should be noted that the chained CPI produces deficit savings elsewhere in the federal budget. But according to former Obama OMB chief Peter Orszag, the total savings in future years may be less than forecast due to smaller differences between the chained and current CPI metrics.) Means-testing benefits, tightening eligibility for disability benefits and raising the retirement age to 68 wouldn't aid Social Security's sustainability as much. Raising the retirement age would ($13 billion in 2015, $247 billion in 2030), but at a very steep cost to the elderly (and even some children).

To be sure, using the chained CPI to set annual Social Security cost of living adjustments would hurt seniors as well. Dylan Matthews estimated a benefits cut of 3.5 percent (or $849) for someone who retired in 2001. "Of course," As Matthews put it, "a 3.5 percent cut in income matters a lot more when you're barely clearing $20,000 a year than it does when you're making a regular middle-class salary."

That statement happens to apply to a lot of people. As USC Professor Edward Kleinbard warned in February, cutting Social Security benefits seems particularly dangerous when the program provides almost 40 percent of the cash income for all Americans ages 65 and older. Twenty-three percent of married seniors and 46 percent of single seniors depend on the program for 90 percent or more of their income. And without it, the Center on Budget and Policy Priorities (CBPP) recently reported, 14 million more seniors would live below the poverty line, a staggering jump from 8.7 percent to over 43 percent:

No doubt, calling for an increase in (or the elimination of) the payroll tax cap won't be easy for President Obama. Republicans, needless to say, will reject any tax increase out of hand. And during his both his 2008 and 2012 presidential campaigns, candidate Obama promised he would not raise taxes on American households earning less than $250,000 a year. But to stabilize Social Security in the long term without cutting benefits, that's a promise worth breaking. Especially when candidate Obama promised he wouldn't adopt the chained CPI, either.

Originally posted to Jon Perr on Fri Apr 12, 2013 at 01:08 PM PDT.

Also republished by Social Security Defenders and Daily Kos.

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Comment Preferences

  •  Come on (5+ / 0-)

    Are you implying that this nice man pay more into Social Security? That's so mean.

    •  What About Poor Mitt Romney... (4+ / 0-)
      Recommended by:
      beltane, Klusterpuck, tardis10, Calfacon

      ...who turned down both Medicare and Social Security benefits when he turned 65 last year.

      You're absolutely right - my proposal is just "punishing success."

      •  Dear brother John (3+ / 0-)
        Recommended by:
        57andFemale, flevitan, NM Ward Chair

        I read this line and felt obliged to correct you since the conservative mythology has so thoroughly spread this false assumption that even a good progressive like you has fallen for it.....
        "The United States may have serious longer-term fiscal problems"
        There is no such thing as "longer term fiscal problems" ffor the USA....The US dollar is a simple public monopoly issued by the only entity that the Constitution grants the powers of currency issuance....the US Govt.
        The Govt does not borrow its own currency, now that we are operating a 100% fiat currency, there is no such thing as the US Govt running out of its own money.  The US Govt debt is a largely fictitious issue.  And balanced budget's are necessarily bad for the country under almost every circumstance as the Private sector needs the net financial assets that the Govt deficit provides.  There is a reason that all of the budget surpluses in US history have been followed by recessions....if the Govt sector is in surplus then the nongovt sector is necessarily in deficit (an accounting tautology)....and since the nongovt sector can't create money, by definition, they cant stay in deficit for long....only the Govt can, and needs to, run perpetual deficits...after all thats the only place debt free financial assets can come from.

        "The Earth is my country and Science my religion" Christiaan Huygens

        by Auburn Parks on Sun Apr 14, 2013 at 06:16:00 AM PDT

        [ Parent ]

        •  Modern monetary theory aside, (0+ / 0-)

          Most people still don't understand how Social Security adds to the deficit.  Unless we're talking about the unified budget, which takes the balance in the Social Security trust funds into account when discussing the federal budget, there is no way the funds can impact the federal deficit as a result of its own revenue stream.  

          But in the unified budget, any surplus in the SS trust funds are not counted as income to the treasury, but any money the congress borrows (or has borrowed) from the trust funds (and for which those dreaded "IOU's" have been issued) is counted as a liability.  Social Security trust funds (as well as the USPS) are therefore known as "off budget."  For purposes of balancing the budget, then, there are two ways of figuring, which is never fully explained to the public.

          The problem is in the way vested interests and the almost completely ignorant media has presented this situation - that is, to talk about the combined federal budget out of one side of their mouths and the unified budget out of the other depending on which fits the message they're trying to convey.

          Even worse, the media hardly ever even mentions the trade deficit except in the contexts that, once again, bolster whichever side of the budget debate they need to address to score whatever political point they're trying to make.

          "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

          by SueDe on Sun Apr 14, 2013 at 07:39:35 AM PDT

          [ Parent ]

          •  with all due respect....there is no such thing as (0+ / 0-)

            putting MMT aside.  The monetary system is what it is, the reality of how the system works can't just be put aside because the mythology of the gold standard lingers.  It is precisely this fundamental misunderstanding that ultimately dooms the progressive financial agenda.  It needs to be met head on with the operational reality of fiat money.  The concept of SS running of out money should never even be contemplated....its like asking...can the US defense budget ever go broke?  its literally a nonsequitur.  Everything your talking about above is largely an accounting fiction....does SS add to the deficit or not?....why does it matter.  
            The only thing that matters is....is the current level of spending for SS causing inflation because seniors spending levels are so high that they lead to full employment and an economy that is running so hot we are seeing inflation?  No you say....then SS spending is not a concern in any way.  Make SS part of the general treasury outlays and no one will ever be concerned about the so-called solvency of the trust fund ever again.

            "The Earth is my country and Science my religion" Christiaan Huygens

            by Auburn Parks on Sun Apr 14, 2013 at 05:39:03 PM PDT

            [ Parent ]

        •  Ever hear about a thing called inflation? (0+ / 0-)

          This sort of simplistic economic perspective will ruin us all if a majority of people that think like this continue to vote demagogues into power. I suggest reading the first four chapters of Thomas Sowell's Basic Economics before making these sorts of proclamations.

          •  I've got some reading for you, too! (1+ / 0-)
            Recommended by:
            happy camper
          •  The only rule of thumb anyone needs to understand (0+ / 0-)

            inflation and its relation to the Govt deficit is as follows:
            Inflation low and stable? => the deficit is not too large
            Higher than desired unemployment? => the deficit is too small
            In the balance of these two simple concepts is the only information worth having in determining whether the size of the deficit is too small or too large.
            After all, if inflation is too much money chasing after too few goods.....it stands to reason that if more money results in a more goods and services being created (i.e. a decline in unemployment = increased productivity) then you will still have price stability.
            With all that said....there is certainly no reason to concern ourselves with inflation problems while we have a unemployment rate (U-6) of ~15%

            "The Earth is my country and Science my religion" Christiaan Huygens

            by Auburn Parks on Sun Apr 14, 2013 at 05:28:55 PM PDT

            [ Parent ]

            •  This is absurd (0+ / 0-)

              Inflation is not too much money chasing too few goods.  Inflation always happens throughout history when governments devalue the money supply by increasing money supply to pay off debts.  The real value of goods and services does not change in realtive terms when more or less money is supplied.  What changes is how much of that money is needed to represent that fixed value.  Your notion is ridiculous and a dangerous sort of thinking....  This simple view misses a fundamentally important compenent of the equation...

              •  Your misundertanding is absurd but its ok. There (1+ / 0-)
                Recommended by:
                happy camper

                must always be inflation (increase in the money supply in excess of the increase in goods and services) in order to keep up with population growth and to keep the economy moving forward.  Deflation is far more devastating to an economic system than a little inflation.  I accept that you don't understand this stuff and thats ok because not many people do....thats what I am here for, to help our side understand.  I happily suggest you do some reading that will help enlighten you and a good place for you to start would be
                neweconomicperspectives.org
                MMT or modern monetary theory (hint: the theory is used similarly as the 'theory' in evolution)

                hope you have a good day

                "The Earth is my country and Science my religion" Christiaan Huygens

                by Auburn Parks on Mon Apr 15, 2013 at 05:29:08 AM PDT

                [ Parent ]

          •  If your only reference point is Thomas Sowell... (2+ / 0-)
            Recommended by:
            NM Ward Chair, happy camper

            ..then you are either in the wrong place, or a troll.

            And, a little inflation that allows costs to reflect the true costs of goods and services, while more justly compensating those who actually build the goods and provide the services, is not even a bad thing. Rock bottom pricing that rewards exploitation, on the other hand, most definitely is.

            •  You miss the point (0+ / 0-)

              I am not talking about a little inflation.  I am talking about a lot of inflation.  Runaway inflation will definitely happen eventually if the government increases the money supply in perpetuity...  I am not a troll.  I am a Libertarian living in the real world.  I come here in part to try understanding liberal thinking, and in part to encourage people to think outside the bubble... I try to be open about various ideas, but I inevitablty run into incomplete thinking that fails to account for all the important variables.  I was countering Auburn Park's silly notion above that the government to magically steer clear of a fiscal crisis through increasing the money supply as infinitly as is needed.

              •  Hey TinTexas (1+ / 0-)
                Recommended by:
                happy camper

                I can always tell when someone has an ideological predisposition against reality.....its pretty easy actually....when they misquote you and use straw man....thats a pretty good indicator.
                this quote says it all about you .
                "I was countering Auburn Park's silly notion above that the government to magically steer clear of a fiscal crisis through increasing the money supply as infinitly as is needed."
                There is nothing magical about economics
                GDP = Govt spending + consumer spending + investment spending + net exports
                Its just a matter of money and thankfully money is not a commodity, its just digital entries or pieces of paper.  Nothing magical about that....where do you think money comes from anyway?....Hint: it says Federal Reserve note and its signed by the Treasury Sec.  Yes, inflation is the constraint to new money creation....everyone knows that...
                Is there high and increasing inflation right now?....NO => the deficit is not too big

                Do we have high unemployment?....Yes => the deficit is too small.

                This stuff is not terribly complicated, but one cant expect so-called libertarians (a fantasy based ideology, with very little connection to reality) to understand the way the world works

                "The Earth is my country and Science my religion" Christiaan Huygens

                by Auburn Parks on Mon Apr 15, 2013 at 05:36:56 AM PDT

                [ Parent ]

                •  you didnt address my point (0+ / 0-)

                  You just said more of the same, which I already refuted. Ironic that you make the accusation of ideological bias, because that seems to be precisely what compels you to embrace a formula that leaves out the very real variables that turn your position on its head.

                  •  your point was meaningless and as such my original (0+ / 0-)

                    response stands.  Yes, unlimited money creation leads to inflation.  Did over $1 trillion in new money creation every year since the Great Recession cause inflation?....NO.  Thats because inflation only runs rampant when your economy is running up against its maximum output capacity....something we are not close to......therefore there is no inflation risk....we could probably run $2 trillion deficits for a few years until unemployment gets below 5% before seeing any inflation risk.....your point was based upon a misconception about the way fiat monetary systems operate and as such its pretty much irrelevant....US Govt devaluing its currency so that it can pay off its debts.....there is no such thing as debt for the US.... at least not in the way most people think of it.  Those treasury bonds are nothing more than savings bonds....do you think people have too much saved wealth?

                    "The Earth is my country and Science my religion" Christiaan Huygens

                    by Auburn Parks on Mon Apr 15, 2013 at 01:52:16 PM PDT

                    [ Parent ]

              •  There are no (0+ / 0-)

                libertarians who live in the real world. It's an oxymoron, like giant shrimp or guest host.

                "A lie is not the other side of a story; it's just a lie."

                by happy camper on Mon Apr 15, 2013 at 05:43:30 AM PDT

                [ Parent ]

          •  Sowell? (0+ / 0-)

            BWAHAHAHAHAHAHAHAHAHA!!!!

            You have lost any credibility you may have had. Sowell? Oh, please...

            "A lie is not the other side of a story; it's just a lie."

            by happy camper on Mon Apr 15, 2013 at 05:41:38 AM PDT

            [ Parent ]

        •  love the Huygens quote. (0+ / 0-)

          and I know who he is.  I do research and write books on the history of horology.

          •  thanks...that quote struck a deep chord with my (1+ / 0-)
            Recommended by:
            NM Ward Chair

            humanism outlook from the first moment I saw it so many years ago in Sagan's Cosmos.  I do enjoy it so and thanks to Christiaan for making it...and for Sagan for keeping it alive.

            Peace

            "The Earth is my country and Science my religion" Christiaan Huygens

            by Auburn Parks on Sun Apr 14, 2013 at 05:40:59 PM PDT

            [ Parent ]

        •  Not quite. The Fed is not part of the gov't (0+ / 0-)

          yet Bernanke is  creating dollars and handing over billions ($85) every month to buy underwater gambling debts (derivatives) from the corrupt billionaires.  I may be wrong, but both the US Treasury and the Fed can create dollars.

          "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

          by BrianParker14 on Sun Apr 14, 2013 at 07:30:56 PM PDT

          [ Parent ]

          •  Nope, (0+ / 0-)

            the Treasury cannot legally create new money (unless you consider US treasury bonds to be new money, and some people do).  If the Treasury were allowed to overdraft in perpetuity at the Fed bank (all commercial banks can overdraft at the Fed), then it would be considered just creating new money, but alas we still have gold standard rules in place they dont allow for that AND the Treasury is still required to unnecessarily issue new US Treasury bonds dollar for dollar with new spending....hence the reason there is a liability associated with the Govt deficit.  The Fed is 100% part of the Govt, it was created by congress and is completely under the rule making procedures of Congress.  The Chair is appointed by the Pres and confirmed by the Senate, and the Fed remits 100% of its profits (minus operating expenses) to the Treasury every year.  Yes, we could very easily consolidate the Fed with the Treasury into one department, (and many advocate for that, I don't care either way) but that means major changes to the system....again, something many people advocate.

            "The Earth is my country and Science my religion" Christiaan Huygens

            by Auburn Parks on Mon Apr 15, 2013 at 05:43:20 AM PDT

            [ Parent ]

            •  Thanks AP for the info. (0+ / 0-)

              I do consider issuing Treasury bonds creating money.  Of course the House determines the limits (the Deficit).

              However, it seems as though the Fed has limitless authority as to how much they can create and what is done w/the funds they receive.

              Trivia:
              JP Morgan was on the first Fed Reserve Board of Directors. One of his heirs has always been one of the directors of the NY board. Ain't nepotism grand.

              "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

              by BrianParker14 on Mon Apr 15, 2013 at 05:34:14 PM PDT

              [ Parent ]

              •  why does your trivia point (0+ / 0-)

                about JP Morgan et al not surprise me....corruption will be the end of us if we're not careful.

                about the Fed.....you are half right and half wrong.  
                It is true that the Fed has limitless authority to create money (of course only constrained by the perception of Congress that the Fed is doing harm and then duly changing the Fed chair or amending the Federal Reserve Act or the Open Market Act)

                This is the half wrong part:
                "and what is done w/the funds they receive."
                The Fed is actually quite limited in what it can do with its created money.  The Fed can create money to buy already existing bonds off the secondary market (the Fed is forbidden from purchasing Treasuries directly from the Treasury at the primary auctions....stupid, I know) OR the Fed can create money in the form of bank reserves which it lends to its member banks and as such get paid back to the Fed with interest over time.  

                There are a myriad of small other things the Fed can do like foreign currency swaps etc but they are practically meaningless when seen in scale.

                The above reasons are precisely why the Fed can't get the economy going again, even though it has the unlimited ability to create money....it can't spend that money in very many useful ways....that is the responsibility of Congress alone.  If Congress wanted to completely suspend FICA until unemployment got below 5%, they could easily do that.  We'd have $2 trillion deficits until we reinstated the tax but that is basically meaningless as the Fed can buy up as many existing USTs as necessary to keep the available supply "in balance" with whatever the Fed needs to set interest rates where the Fed wants them

                "The Earth is my country and Science my religion" Christiaan Huygens

                by Auburn Parks on Mon Apr 15, 2013 at 07:24:12 PM PDT

                [ Parent ]

                •  But it can make billionaire gamblers whole. (0+ / 0-)

                  http://www.bloomberg.com/...

                  "In the first round of purchases, begun in 2008, the Fed bought $1.4 trillion of housing debt and $300 billion of Treasuries. In the second round, beginning in November 2010, the Fed bought $600 billion of Treasuries.

                  Mortgage Bonds

                  In the current round, the Fed’s total purchases will be split between $600 billion of mortgage-backed securities and $540 billion of Treasuries, according to the median estimates of economists in the survey."

                  I'd like to know how many financial houses and individuals will receive the $600 billion of 'mortgage-backed securities (derivatives). Maybe a few hundred or less. That's corruption at it's finest.

                  My ignorant uneducated opinion based on skewed observation:

                  The Fed is designed to protect the super wealthy, not promote economic growth for the masses.

                  Congress has no interest in reigning in the Fed.

                  The super wealthy who receive the largesse from the Fed own the Conresscritters. There are no legitimate controls on the owners of the Fed.  Normal humans have no influence at all.  Trillions are materialized out of thin air and none of it reaches the needy. And the unemployed, hungry and sick suffer.  That's laissez faire neoliberal capitalism on a roll.  

                  "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

                  by BrianParker14 on Tue Apr 16, 2013 at 04:23:15 PM PDT

                  [ Parent ]

      •  here's an idea, (7+ / 0-)

        Instead of raising the cap, making higher income  individuals pay more, we focus on the individuals and corporations who create the need for programs like social security to begin with by not paying sufficient retirement benefits.

        Why are we married to 50/50 between employer and employee contributions? Why not 60/40, or 75/25? It's no secret employers have been cutting back on pension benefits these past 40 years, and they have been cutting back on pay for the same period. Profits grow, executive pay grows and social security is in trouble? Time to exercise the same principle that social security originally put into use, if they don't pay, make them pay.

    •  Take away Grannie's spare change, but anything (2+ / 0-)
      Recommended by:
      beltane, OooSillyMe

      over $100,000 you may keep.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Fri Apr 12, 2013 at 02:21:15 PM PDT

      [ Parent ]

  •  Good post. (5+ / 0-)

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Fri Apr 12, 2013 at 01:15:38 PM PDT

  •  Unless you're a VSP. (3+ / 0-)
    Recommended by:
    Klusterpuck, smiley7, dadoodaman

    Remember when Obama wasn't quite so serious he could agree with this approach?

    Or was he just saying that?

    Hard to tell anymore.

    Frankly, I'd rather take down Exxon or Goldman Sachs, the way we're taking down RushBeckistan, than elect another "better" Democrat who's going to wind up singing for the bankster choir.

    by Words In Action on Fri Apr 12, 2013 at 01:18:31 PM PDT

  •  How do we get around this: (2+ / 0-)
    Recommended by:
    AgavePup, Calfacon

    "No doubt, calling for an increase in (or the elimination of) the payroll tax cap won't be easy for President Obama. Republicans, needless to say, will reject any tax increase out of hand."

    •  seems like a good (2+ / 0-)
      Recommended by:
      smiley7, tardis10

      ad campaign for '14 to me.

      “Washington has become our Versailles. We are ruled, entertained, and informed by courtiers -- and the media has evolved into a class of courtiers." - Chris Hedges

      by Klusterpuck on Fri Apr 12, 2013 at 01:36:35 PM PDT

      [ Parent ]

      •  Gosh, this could have been in the President's (2+ / 0-)
        Recommended by:
        tardis10, CTDemoFarmer

        budget!

        "Lets show the rascals what Citizens United really means."

        by smiley7 on Fri Apr 12, 2013 at 01:38:58 PM PDT

        [ Parent ]

      •  Maybe- I know there's support (0+ / 0-)

        for raising taxes on income over 250.000, not sure how it would poll for income over 113,00- especially among the self-employed who would get a 12.4% bump.  I'd rather go after the really high earners- maybe a donut hole approach?

        •  Now here's a decent, and fair, idea (1+ / 0-)
          Recommended by:
          Clem Yeobright

          The idea of simply and dramatically raising taxes on the middle class (and make no mistake about it; that's what the diarist is proposing) is stunningly unfair, on so many levels.  The proposal essentially is to raise taxes on those making 110k/yr to 150k/yr? or 175k/yr?  In many parts of the country, that's a middle class that's struggling to pay mortgages on $400k houses, putting their kids through college for which financial aid is unavailable or hard to find.  

          Come on, progressives, you can come up with something better.

          Hill? What hill? No one said there was going to be a hill . . . . Was there a sign?

          by Jersey Jon on Sun Apr 14, 2013 at 06:55:45 AM PDT

          [ Parent ]

          •  Is this snark? (3+ / 0-)

            I hope so, but just in case it's not, let's use me as an example.  
            I'm the sole earner for my family of 5.  I've just gone from 30K per year (~14.50/hr, so double minimum wage) to a comfortable income above the cap.  At 30K per year, my entire income was subject to payroll tax.  I was struggling to get 3 kids raised and pay my mortgage -- one taken out 12 years ago when there were two wage earners in my family, and our income was considerably higher than 30K per year.  Struggling doesn't quite begin to describe it.  Nearly our entire income went to keeping the precious roof above our heads.  Yet our entire income was subject to payroll tax -- something you apparently see as entirely reasonable.  Frankly, I did too -- it just is what it is, and at that income level, there was absolutely no way in hell to save anything for "retirement." SS is all anyone at that level can hope to rely on during the infirmity that comes with old age.

            At my current, far more comfortable income, I make 30K per year that is not subject to SS taxes.  To me, it is absurd.  I can easily afford my entire income to be subject to payroll tax now, and would gladly pay it.  How can anyone argue that taxing all 30K of someone's whole income is fair and reasonable, but taxing an extra 30K+ of an income above 6 figures is onerous and burdensome?  

            "On their backs were vermiculate patterns that were maps of the world in its becoming. Maps...of a thing which could not be put back. Not be made right again."

            by middleagedhousewife on Sun Apr 14, 2013 at 07:45:02 AM PDT

            [ Parent ]

            •  Let me get this straight (0+ / 0-)

              You're volunteering to pay a tax rate of 37.4% on your income above 113k, i.e., an extra $3600 or so per annum - or $300 a month ... right?

              I treat these payments as income tax because apparently you don't expect these payments to be regarded as FICA contributions when your SS benefits are calculated when you retire.

              Oh wait! You DO expect to recoup some of these contributions when you retire? You expect your SS benefits to be higher because of your higher contributions? How is that not lending SS the money?

              Please clarify.

              Too late for the simple life, too early for android love slaves - Savio

              by Clem Yeobright on Sun Apr 14, 2013 at 08:07:24 AM PDT

              [ Parent ]

              •  No, I don't expect to recoup everything I put (3+ / 0-)

                in.  I expect to support and help maintain a system that provides some manner of security for those who never made anything above 30K per year their entire lives, not just for a couple of "bad" years.  I expect I now have enough income, that even with taxes, and even with a mortgage and 3 children, one of whom is going to college, to actually save something for "retirement." (What I do does not break the body -- barring a stroke or senility, I could do it until I drop. This is why I keep putting it in quotes.)  
                Who knows if I'll make it to typical retirement age?  Perhaps I'll crap out at 63 like one great grandparent did, and recoup nothing, or perhaps I'll live to 110 like one great aunt did, and take out far more than I ever put in.  Whatever the case, I am happy right now to help provide security to those who need it. I am very glad it was there for my great aunt.  I hope it is there for me and/or my children, should any of us ever actually need it.

                I do not see myself at my current income as some needy person, struggling to get by, over-burdened by taxes, clawed at by greedy old folks, orphans, widows, and disabled people.  I am not someone whose back would break if the last 30K in income were subject to the same payroll tax the first 30K is subject to in order to help the elderly, orphans, widows, and disabled people have slightly more comfortable lives.

                "On their backs were vermiculate patterns that were maps of the world in its becoming. Maps...of a thing which could not be put back. Not be made right again."

                by middleagedhousewife on Sun Apr 14, 2013 at 08:52:45 AM PDT

                [ Parent ]

                •  There are some people who DO expect to recoup (0+ / 0-)

                  And many of them are the people for whom you are proposing $10k/month SS benefits into their 90s - reaping the contributions of those of us who will NOT live past 75.

                  And you're willing to tithe for them. Cool.

                  Too late for the simple life, too early for android love slaves - Savio

                  by Clem Yeobright on Sun Apr 14, 2013 at 09:18:37 AM PDT

                  [ Parent ]

        •  Better solution- 5.2% across the board (1+ / 0-)
          Recommended by:
          NM Ward Chair

            Why do a donut hole, when I bet you could cut both the employee and employer rates to 5.2%, and then just remove the cap entirely? You'd still raise more revenue (especially given the huge inequality in incomes with 1%-ers) and give the vast majority of Americans and small business owners a tax break.

            Win-win for all involved. There's no question in my mind that any Social Security issues (which don't happen for 20 years anyway) are due to low revenues and stagnant wages more than expense based.

    •  Um.... (6+ / 0-)

      When Obama proposed a cut in SS benefits of which were demanded by Republicans they still rejected it and attacked him.
      Obama and Democrats should call for reality, and that benefit people not policies that insane republicans want.

      We only think nothing goes without saying.

      by Hamtree on Sat Apr 13, 2013 at 08:39:14 PM PDT

      [ Parent ]

      •  Why is it everytime I see some Dem on TV agreeing (6+ / 0-)

        with CCPI they suddenly state that we have to look after education and doing what is fair for those younger?  It appears to me they are saying granny must give up her security for the young people.  What is really means is the government wants the SS money to plug holes in their budget.

        •  Considering the inequality contained (2+ / 0-)
          Recommended by:
          flevitan, NM Ward Chair

          in the current definition of the chained CPI, there is now a (growing) group of economists calling for a CPI-E, that is, a CPI based exclusively on how the elderly spend their money.  These economists are coming to the realization that since health care costs represent a much larger portion of the elderly budget than for the general population; since these costs are rising much faster than overall cost increases, and since these costs are not substitutable for lower cost alternatives, the need for a CPI-E is now a necessity.

          "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

          by SueDe on Sun Apr 14, 2013 at 07:56:57 AM PDT

          [ Parent ]

    •  This is how... (4+ / 0-)

      Research shows that social security is 25% more efficient then other retirement accounts[1].
      Since Chili and the UK has abandoned their SS system their benefits have DEcreased by 25% despite costs being the same[2].

      [1]http://www.epi.org/...
      [2]http://tcf.org/...

      We only think nothing goes without saying.

      by Hamtree on Sat Apr 13, 2013 at 08:45:39 PM PDT

      [ Parent ]

    •  He already called for it. (0+ / 0-)

      So, maybe one solution is putting pressure on Congress, where the real problem is, instead of acting as though Obama is the only branch of government.

  •  Good info you have collected (1+ / 0-)
    Recommended by:
    Jon Perr

    Also I like the Social Security trustees report. They put together all the ideas for making Social Security solvent and figured out how much each idea would help.

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

    I like E2.2 - remove the cap and apply the payroll tax to all earnings. That would keep Social Security solvent until 2060, then you'd have to do more things.

    •  Thanks for the SSA Reference! (0+ / 0-)

      It's really helpful.

    •  We should push for option E2.1 and be (1+ / 0-)
      Recommended by:
      flevitan

      willing to compromise to E2.4.

      According to the SS's estimates of growth, E2.1 would be able to provide full benefits until 2077 and E2.4 until 2067. In fifty years, the political discourse will likely be completely different.

      If I understand correctly, option E2.4 retains the provisions of SS beneficiaries "getting back what they put in" except, as is currently the case, the payouts are progressively adjusted (poor folks are paid relatively more and rich folks are paid relatively less than they put in). This is useful so that SS cannot be called "welfare".

  •  The 99 percent would be OK with it. (0+ / 0-)

    Plato's " The Cave" taught me to question reality.

    by CTDemoFarmer on Fri Apr 12, 2013 at 02:05:44 PM PDT

  •  Now that Republicans and Democrats agree (0+ / 0-)

    no cuts to Social Security

    and

    Everybody knows those making over $100,000 quit paying in.

    Maybe. We have a go.

    guns are fun v. hey buddy, watch what you are doing -- which side are you on?

    by 88kathy on Fri Apr 12, 2013 at 02:20:03 PM PDT

  •  Better yet, SCRAP the cap completely, and also tax (0+ / 0-)

    capital gains and interest income for Social Security.

    This will put so much money into the Trust Fund that we could lower the retirement age and raise benefits.

  •  I Favor Raising the Cap (5+ / 0-)

    For the last 4 years I generally stopped paying no later than September of each year.  Is it fair? No.  Is it equitable? No.   Raise the damn Cap!

    -approaching Curmudgeonry with pleasure

    by Calfacon on Sat Apr 13, 2013 at 10:17:17 AM PDT

    •  So this is how we continue to win hearts (1+ / 0-)
      Recommended by:
      Sparhawk

      and minds?

      It's just that I hope that we have more class than those who oppose us.
      I.e., the "progressive" proposal is to raise taxes on the middle class?

      Good thinking.

      Hill? What hill? No one said there was going to be a hill . . . . Was there a sign?

      by Jersey Jon on Sun Apr 14, 2013 at 07:01:34 AM PDT

      [ Parent ]

    •  Raise contributions AND benefits? (0+ / 0-)

      You not only stop PAYING in September but you also stop accruing FICA contributions based on which your benefits will be PAID.

      Are you forswearing benefits derived from the increased contributions you are proposing?

      If so, my hat's off to you. You're basically proposing increasing the income tax rate for people earning $113k to $200k (or forever, I guess) by 12.4%, i.e., the 25% bracket many of us are in will become 37.4% (and the 15% bracket some are able to scramble into will become 27.4%, etc.) Damned good of you, I'll say that!

      Too late for the simple life, too early for android love slaves - Savio

      by Clem Yeobright on Sun Apr 14, 2013 at 08:17:19 AM PDT

      [ Parent ]

    •  why is it not fair? (1+ / 0-)
      Recommended by:
      Clem Yeobright

      What you get is based on what you (and your employer) put in. It's an entitlement, based on that, not welfare. If you pay on higher than $110Km are you not expecting a commensurate return?

      There are ways to fix the minor long-term issues with SS that do not change it from its historical role to welfare. Do you really think those who hate anything related to government will not use the disassociation of SS from what you paid in to strangle it in the long run?  If so, you are far more  trusting than I am.

  •  Tie the Ceiling to the Benefits COLA (2+ / 0-)
    Recommended by:
    Zinman, Hirodog

    If you annually adjusted it in proportion to the Cost of living adjustment we wouldn't have to keep revising this issue.

     

    I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

    by JML9999 on Sat Apr 13, 2013 at 08:05:13 PM PDT

    •  Cap already increases with wages (4+ / 0-)

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

      And roughly equivalent to COLA, though already fractionally higher.

      The problem is not that the cap doesn't increase regularly. Because it does. The problem is that workers aren't getting the real wage increases that would drive the cap up in both absolute and relative terms faster (increasing dollar value and moving the percentage back towards 90% from current 83% of covered wage.)

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Sat Apr 13, 2013 at 10:55:10 PM PDT

      [ Parent ]

      •  Thanks for clearing that up about the ceiling (0+ / 0-)

        cause the one side argues the spend side; the folks pushing Chained CPI .

        The other side pushes adjusting the Cap it would help that this factoid was not buried in the fine print that it is adjusted regularly.

        One gets the impression that this is an adjustment that requires regularly legislative action  like debt ceilng and "Doc-Fix"

        I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

        by JML9999 on Sun Apr 14, 2013 at 12:05:10 AM PDT

        [ Parent ]

        •  The problem is income share not formulas (0+ / 0-)

          Proposals to address Social Security 'crisis' by monkeying around with the cap is ultimately just more Neo-Lib like missing the landscape because of blinders.

          There is nothing wrong with Social Security that would not self correct via 'More Jobs. At Better (and Fairer) Wages'.

          The problem is a power imbalance in the distribution of gains from productivity. In short Capital backed by a semi-conscious activist ideology disguised as a scientific discipline (classical Economics) has always suppressed labor compensation under cover of bullshit theories with keywords 'NAIRU' and 'marginal labor productivity' and 'redistribution'. And Neo-Libs have gone along.

          On the other hand Progressives have by and large seen the underlying problem but like all Radicals ever propose to tear the tree out by the roots (Radical from L. 'radix' 'root') rather than pruning it back into shape. Say by a New New Deal.

          More Jobs. At Better Wages. And Social Security is far from the only thing that gets fixed along the way.

          SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

          by Bruce Webb on Sun Apr 14, 2013 at 07:56:24 AM PDT

          [ Parent ]

          •  Contributions not received = income not insured (1+ / 0-)
            Recommended by:
            Bruce Webb

            I'm still having trouble understanding what is magic about the 90% figure. If SS insures only 80% of income, then it pays benefits on only 80% of income, doesn't it? Why is that bad?

            Too late for the simple life, too early for android love slaves - Savio

            by Clem Yeobright on Sun Apr 14, 2013 at 08:20:02 AM PDT

            [ Parent ]

            •  Absolutely right. Confuses effect for cause (1+ / 0-)
              Recommended by:
              Clem Yeobright

              Artificially changing cap formula to capture 90% of covered income just penalizes the professional/administrative class for a problem created by the top management and their 1% masters.

              Overall distortions in distribution of gains from productivity have yanked up gains to the top at the expense of real wage gains to the vast majority. The arithmetic result is that the cap formula hasn't kept pace with the shift. But the answer is not to punish those in the 83-90% range even though they were indirect beneficiaries, because they were not the culprits.

              Logically there are two responses: tax the top 10% and particularly the top 1% to redress the distortion after the fact (not 'redistribution' which implicitly asserts there was no such distortion). Or work to eliminate the distortion before the fact by properly weighting actual factor contribution to productivity. Say by minimum wage increases and unshackling the NLRB.

              That is go flat out Progressive and Tax the Rich. OR
              Embrace your Inner FDR New Dealer and level the real playing field.

              Instead too many Progressives end up falling between two poles and end up embracing Neo-Lib patches and tape jobs that just conceal the reason for the breakdown.

              There is no magic about 90%. It is just how the formulae work out on a non distorted playing field. Fix the field before selectively punishing the players. Who mostly were not responsible for warping the field. That's the owners and coaches (aka economists and consultants).

              SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

              by Bruce Webb on Sun Apr 14, 2013 at 10:11:43 AM PDT

              [ Parent ]

              •  And income so quickly becomes wealth ... (0+ / 0-)

                People here can be very sloppy about discussing inequality of income and inequality of wealth ... and that's easy to understand because all that 2012 income being taxed at a ridiculously low rate has now become 2013 wealth - which we don't tax at all.

                If someone is pulling in $5 million or even $1 million in salary, every year income tax rates are kept low (like 2001-2012) is one more year in which that conversion can be made for eternity!

                Will an enhanced estate tax be sufficient to undo the effects of the last 12 years? Or will we have to reconsider wealth taxes to return to being - or to become - a just and functional society?

                Too late for the simple life, too early for android love slaves - Savio

                by Clem Yeobright on Sun Apr 14, 2013 at 10:23:27 AM PDT

                [ Parent ]

  •  Hell, I've said this for years. They should have.. (1+ / 0-)
    Recommended by:
    historys mysteries

    asked me! This shi... really isn't rocket science.

  •  "Courage" in DC is asking poor to sacrifice (6+ / 0-)

    while showering benefits on the wealthy. To paraphrase Mose Alison, "Everbody's crying 'courage', but nobody knows the meaning of the word."

    Sadly, Obama, has sunk to this level of elite hyposcrisy.

    Skepticism of all the elite institutions, not trust, is what required for successful leadership in this era. Digby

    by coral on Sat Apr 13, 2013 at 08:11:08 PM PDT

  •  I don't think anyone will or should complain (1+ / 0-)
    Recommended by:
    TacoPie

    about raising the cap including increasing the benefits if done on an actuarially basis.  Maintian the sprit and purpose as an insruance fund.  Otherwise it becomes an income tax. Then it would die a long slow death.

    Never argue with an idiot. They will drag you down to their level and beat you with experience.

    by thestructureguy on Sat Apr 13, 2013 at 08:13:51 PM PDT

  •  end the cap, don't lift it. (5+ / 0-)

    if there was no cap, then we would have
    a better system.  Raise the maximum benefit.

    Certainly someone who makes 2 million a year will have assets, but, some of them also wipe out.

    Look at celebrities who wipe out everything.
    Letting them have a better payout on the backend may help out those who bet it all and lost.

    •  Question: (0+ / 0-)

      The first time you hear someone say

      My brother-in-law is retiring next month and he and his wife will get $15,000 a month from Social Security. They're going off on a 6-month world cruise with some of it and will be banking the rest.
      while you're struggling to pay $620 out of your monthly $5000 income, what will be your attitude towards Social Security?

      Too late for the simple life, too early for android love slaves - Savio

      by Clem Yeobright on Sun Apr 14, 2013 at 08:25:42 AM PDT

      [ Parent ]

      •  okay if said BIL paid (0+ / 0-)

        $350K/year in SSA taxes for 15 years.

        Realize the SSA tax is some 15%,  if someone like Mitt Romney were actually taxed on his full income, he'd have paid in 15 million/year for a good 20 years.

        If Mitt paid $300 Million into the system, i'd be okay with him getting 180K/year back out.

        http://business.time.com/...

        Look at A guy like Gary Busey,  made a couple milllion a year at his prime, now in Ch 7.  Why not let him make better money on SSA as long as he paid in  earlier.

        It's actually better to have the Rich types getting a good check as it makes them more invested in the system.

        •  There are very few people who would agree (0+ / 0-)

          The Rs will get what they want: means-testing, and soon enough Congress will in every budget be setting that year's benefits and eligibility, just as they do with other welfare programs. Soon enough, you'll have to hide the fact you receive Social Security from your neighbors ...

          Re your math: You pay in 12.4% for 35 years; you draw out 15% for yourself, 7.5% for your spouse, maybe another 7.5% for your ex-spouse. Under your 'plan', there will be millionaires (and others, as currently) who by the time they are 80 will have gotten back every cent they put in - and that's adjusting for inflation - and will thereafter have 50 or 100 ordinary working Joes paying their $620 every month to support them in the lifestyle to which they are accustomed for maybe another 20 years. Again, that's benefits in excess of all contributions they made, available because a lot of poor people died in their 70s. to people who have no intention of ever dying - and why should they when they have friends like you?

          Question 2: What are you trying to 'fix'?

          Too late for the simple life, too early for android love slaves - Savio

          by Clem Yeobright on Mon Apr 15, 2013 at 04:35:54 AM PDT

          [ Parent ]

  •  Raising SS revenue is meaningless (0+ / 0-)

    unless it's paired with a guarantee that SS revenue will be used for SS.

    As for raising the cap, unless the Republicans would agree to it, I don't believe that it's a viable option for the situation we're in now.  As I understand it, the all-important goal is to end the sequester, which will cause a lot of real hardship to people every day it continues.  If this is a defensible goal, then both parties have to find a budget that can pass.  That being said, I don't know why Republicans wouldn't agree to the guarantee of using SS funds for SS.  It's fiscally responsible, and would deflect criticism from both parties.

    •  That is already current law (3+ / 0-)
      Recommended by:
      TacoPie, think blue, Clem Yeobright

      The problem is not that such things as benefit cuts or cap increases don't accrue to the Trust Fund and increase solvency, because they do. Instead it has to do with cash flow which has surprisingly small relation to either debt or deficit calculations as regards Social Security.

      You would think that cash flow, deficits, debts, solvency would all move in the same directions at the same rough magnitudes but they don't.

      For example defenders of Social Security often argue that it doesn't contribute to deficits because it is legally off budget. While 'reformers' claim that it obviously does so since it is cash flow negative ($48 billion worth in 2012). Well it turns out that they are both wrong. Defenders because standard deficit numbers have little to do with on and off budget calculations, 'reformers' because those standard numbers measure total income and not cash flow.

      Social Security 'contributed' to the deficit last year. By running a $68 billion surplus. Just as it has every year since 1984 and projects to do on a combined basis for another nine years. Even as it enters a continuous state of being cash flow negative. Those were not typos: $48 billion cash flow negative, $68 billion surplus. How can that be? Well the short answer: "There is no short answer, wait for posts on release of the Annual Report now thought to be in May"

      And the relation of Social Security to public debt is if anything even more counterintuitive: benefit cuts and revenue increases alike ADD to Debt Subject to the Limit and total Public Debt. Meaning that proposing SS changes as a condition of increasing debt limits non-sensical. The effects don't work in the direction logic suggests.

      Just as the fact that under standard scoring Social Security will be SUBTRACTING from deficits over the ten year window used by OMB and CBO make it an odd candidate for cuts. Not because they wouldn't have an effect, but because by that particular metric Social Security already projects to run a $300 billion plus surplus over ten years. While running tens of billions in the red in cash flow terms.

      If none of that seems to make sense, well welcome to the world of the Social Security Finance hobbyist. Let's just say that none of it resembles household or corporate finance/accounting, just about everything leaves you thinking you are trapped in the Hall of Mirrors im a Carnival Funhouse.

      But returning to the original point, all increases in revenue or savings from cuts already flow to and through the Trust Fund and do in fact contribute to solvency. It is their effects on deficits and debts that is odd.

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Sat Apr 13, 2013 at 11:20:45 PM PDT

      [ Parent ]

      •  Wow. (0+ / 0-)

        I'm going to bookmark this.  I don't understand SS any better now than I did 5 minutes ago, but my known unknowns have improved. Thanks.

        •  Analytical Perspectives on the Budget (1+ / 0-)
          Recommended by:
          think blue

          is basically textbook released each year in form of a statistical supplement to the President's budget. It is long but published in pieces imcluding several chapters broken out as 'Budget Concepts and Budget Process'. Most everything you need to know is there, but it is tough slogging, my head hurts every time I try to work my way through it. There is also a 'Trust Fund' section included under 'Special Topics'.

          Alternately you can just dive into the data tables of the Trustees Report, the 2013 version due out now and rumored to be released next month.

          Just be prepared for numbers to move in unexpected ways. A lot of this is ultimately due to Trust Fund assets also scoring as Public Debt plus the fact that the Trust Funds are not really a pension fund at all. That isn't their purpose and in a perfectly solvent system wouldn't be their function in any but the most minimal way.

          SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

          by Bruce Webb on Sun Apr 14, 2013 at 07:35:16 AM PDT

          [ Parent ]

  •  tried the NYT's tool; eliminated the 2030 deficit (4+ / 0-)

    No cuts to social programs, the VA, or even to farm subsidies.  Steep cuts to the military and lots of new revenue.

  •  Raising or eliminating the cap may help (3+ / 0-)

    but only if the maximum payout isn't raised or eliminated accordingly. The system is designed (roughly) to balance payouts and taxes, and so currently both the tax basis and the maximum payout are capped. If both were raised in a balanced way, or both eliminated, then the change would have no impact on the net balance of the system, since higher-income individuals would simply draw correspondingly more out when they retired. On the other hand, raising the cap on the tax but keeping the payout maximum the same would further dissolve the fiction that these are individual accounts rather than a form of welfare for retirees. (Not that there is anything wrong with dissolving fictions.)

    •  Wrong (2+ / 0-)
      Recommended by:
      TacoPie, middleagedhousewife

      See the CBOs 2010 Report called 'Social Security Policy Options' which scores 30 different such options including about half a dozen cap increase proposals.

      Lifting the cap on covered income while letting benefits increase using current bend points does cover 100% of the actuarial gap. On the other hand a total lift on the cap without an increase in benefits backfills 150% of the gap and so would allow some bolstering of benefits on the bottom end.

      So yes there is an offset by letting benefits increase  (why that 150% gets reduced) but it isn't total. The magic terms of art being 'PIA' and 'bend point'. The CBO Report goes into some detail on all this and I recommend it to everyone.

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Sat Apr 13, 2013 at 11:29:04 PM PDT

      [ Parent ]

      •  The CBO report (1+ / 0-)
        Recommended by:
        Bruce Webb

        can be found here.

        Also see the change option tables prepared by the Social Security Actuaries that are here. See especially option E2.4.

        •  Do you see an indication that these reports (0+ / 0-)

          consider that the $1200/month SS check is the one that is most likely to terminate at age 72 (or 68) and the $20,000/month check - if the cap is lifted - is the one that is likely to be issued for 300 or 360 or 420 months?

          Too late for the simple life, too early for android love slaves - Savio

          by Clem Yeobright on Sun Apr 14, 2013 at 08:40:43 AM PDT

          [ Parent ]

      •  I don't think you got my point (1+ / 0-)
        Recommended by:
        Clem Yeobright

        In fact, the report that you linked to perfectly illustrates what I was getting at: that it would be theoretically possible by making balanced changes to the tax side and the benefits side to have a net zero effect on the overall solvency of the system. That is, increased tax revenues could be cancelled out by increased payments. Obviously, none of that is the goal of changing the various parameters of the system.

        My second point, that Social Security being a kind of obligatory individual savings account is a fiction, is also perfectly illustrated by the report: the existence and manipulability of all those parameters to adjust the relation between taxes collected versus benefits paid make that point extremely clearly.

        In fact, I think that what most people want to believe about Social Security is that it is a system whereby if they pay in the amount they are obligated to pay under the law, they will have enough to live on without real want when they are old. I personally believe that that is what it should be. But the “fiction” that you get out what you put in has required the construction of an extremely complicated hall of mirrors, a conclusion also perfectly illustrated by the article you linked.

        •  I get your point (0+ / 0-)

          You just posited a perfect offset such that raising the cap wouldn't actually have redistributive benefits.

          That specific assumption/assertion is arithmetically incorrect as can easily be seen by consulting the cited Report.

          Your argument was wrong because oversimplified. Leading you to try to rescue it by a fuller explanation. Which is a good thing. But I can't expect to get points that you had not yet made.

          Not to say that I agree with your points as amended. But unlike your first claim they require more than one word responses. Which is progress.

          SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

          by Bruce Webb on Sun Apr 14, 2013 at 10:24:17 AM PDT

          [ Parent ]

          •  What are the actuarial assumptions? (0+ / 0-)

            I get the sense that the analysis assumes the average (inflation-adjusted) monthly benefit of 90-year-olds in 2038 will be the average benefit of 65-year-olds in 2013, i.e., that life expectancy is a variable independent of benefit size.

            What if that's not true? What if the average benefit of 90-year-olds in 2038 is 20% or even 10% higher? (In other words, if higher lifetime income is related to longevity?)

            Is that adjustment made by SS actuaries and CBO?

            How does that affect the arithmetic?

            I'm very leery about insuring higher incomes - unnecessarily, by SS principles - and introducing instead of solving problems. Am I alarmist in that?

            Too late for the simple life, too early for android love slaves - Savio

            by Clem Yeobright on Sun Apr 14, 2013 at 10:43:08 AM PDT

            [ Parent ]

            •  Questions for EPI and CBPP (1+ / 0-)
              Recommended by:
              Clem Yeobright

              Seriously. EPI has economist Monique Morrissey, CBPP Paul Van de Water and Kathy Ruffing all of whom do this for a living and have all kinds of resources and calculators.

              Paul in particular is a treasure trove. He held top level positions at CBO and later was no 2 at SS (the Principal Deputy Commissioner being ex officio Secretary of the Trustees). And in both positions had oversight over economic and demographic reporting.

              Me? As I say I am a number pointer rather than a number cruncher. That said the experts have produced plenty of these kinds of numbers to point at. And from listening to them the current system tends to balance out. That is higher income workers tend to live longer and get larger checks for longer periods. On the other hand they get smaller replacement rates with the difference flowing to the bottom. Lower income workers tend to have higher mortality. Then again they are more likely to draw on disability and survivors benefits (aka Lucky Duckies who get to be crippled or dead before they get too old). And get higher replacement ratios.

              But your point is well taken. The current cap exists for a reason and it is not all about giving the rich a tax break. Similarly just eliminating it creates all kinds of equity complications that are to my mind unnecessary. If you want to get all Progressive-y push for a dedicated transaction tax that would fund minimum Social Security and Single Overage floors directly. Embrace your inner Social Democrat. Not your outer Rube Golberg Neo-Lib more concerned with mechanism that actual economic justice.

              SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

              by Bruce Webb on Sun Apr 14, 2013 at 11:13:41 AM PDT

              [ Parent ]

  •  Unspoken Concern Of Rich Very Serious People (2+ / 0-)
    Recommended by:
    flevitan, jbsoul

    Progressive policies that would see them pay more in taxes to support entitlements is a nightmare to them. If you laid out the tradeoff to them between increased misery for the disabled and seniors because the rich very serious people do not want to pay higher taxes, they would do everything to avoid the reality of that tradeoff.

    •  What do you mean by "rich"? nt (1+ / 0-)
      Recommended by:
      Clem Yeobright

      Hill? What hill? No one said there was going to be a hill . . . . Was there a sign?

      by Jersey Jon on Sun Apr 14, 2013 at 07:13:18 AM PDT

      [ Parent ]

      •  People Who Eat Food That Is Fat Heavy (1+ / 0-)
        Recommended by:
        flevitan

        Oil, butter, eggs cream etc.
        Seriously.
        Probably use the same guidelines that we were using for lifting the Bush tax cuts. 250,000 to 400,000 and above.

        •  Ok, so (1+ / 0-)
          Recommended by:
          Clem Yeobright

          That means that the diarist's recommendation would be to nail those who are not rich by your definition (106k-249) with a whopping tax increase.  Not a good idea, and politically unpopular, to say the least.

          Hill? What hill? No one said there was going to be a hill . . . . Was there a sign?

          by Jersey Jon on Sun Apr 14, 2013 at 10:38:36 AM PDT

          [ Parent ]

          •  Just A Question Of Where You Want To Draw The Line (0+ / 0-)

            First. Politically unpopular? We are still talking at 106k people who are well above the median income. So we are not talking anywhere near a majority of the population. I agree with you we should go north of that. The question is,  can you ask people at higher levels of income to tradeoff the loss of the cap with the maintained benefits for seniors and the disabled? I think you can. Just like people will pay higher taxes to have decent public schools to send their kids to rather than have to pay for private schools, will they be willing to lose the cap to make sure that their struggling senior and disabled relatives will not be a burden on their families? Or we can just be greedy selfish bastards. That works too.

  •  Obama talked about this long ago. (0+ / 0-)

    It's all that needs to be done. But, no one noticed when he spoke in favor of lifting the cap because ignoring anything progressive Obama says is more fun or something.

    •  Obama/Biden 2008 had a partial cap increase (0+ / 0-)

      Proposal.

      Partial because it had a donut hole from the current cap up to $250,000 where FICA would be triggered and because Obama and Biden at various times suggested limiting FICA on amounts over the cap to 2 or 4 or 6% rather than the full 12.4%.

      CBO scored the 4% version and showed it backfilling only 1/6th of the gap. Suggesting the 6% version would backfill 1/4th. Which is as bold as Candidate Obama was willing to go.

      To my knowledge. And I was paying attention having been on this beat for nearly a decade by 2008. But if you have a firm cite to the contrary showing a definitive commitment to a total cap lift then I would be fascinated. I suggest people heard what they wanted to hear.

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Sat Apr 13, 2013 at 11:37:18 PM PDT

      [ Parent ]

  •  Two simple fixes (1+ / 0-)
    Recommended by:
    Zinman

    First--of course--raise the cap by the same percentage you raise the payments. It's a no-brainer.

    Second (although nobody dares say it) immigration reform. Several million young people are working for cash right now. (TRust me; I'm in South FLorida and I have windows!)

    Put these young folks in the system and you change the demographic pyramid.

    Voila! Fixed!

    Now move on to gun control and get the government out of our bedrooms.

  •  Whatever this Congress under this Prez (2+ / 0-)
    Recommended by:
    muledriver, KJB Oregon

    does to SS today, the next congress and Prez can undo.

    Or, hypothetically, they can do it one minute, and undo it the next.

    Obama ain't Moses with the tablets.  SS formulas, indexes, existence, the whole nine yards can and will continue to evolve.

    Since it's inception it has almost always expanded. Chained CPI, if it passes, is not even a blip downward, its a change in how fast it grows.  One that will, in all likelihood, get reversed or wiped out by an increase in benefits, the next time the economy is good, or a change in how the CPI is reckoned.

  •  If not many people were living past 65 in 1935, (0+ / 0-)

    even less, way less I would guess, were making more than $110,000.

    guns are fun v. hey buddy, watch what you are doing -- which side are you on?

    by 88kathy on Sat Apr 13, 2013 at 09:43:35 PM PDT

    •  Payroll cap in 1937 was $3000 (7+ / 0-)

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

      And while average mortality at birth in 1937 was indeed 65, mortality at age 65 was that that much different than today with improvements of 5 years for men and 7 for women from then to now.

      The idea that most people just dropped dead right at their 65th year after paying in their whole lives is a combination of myth and misleading notions of mortality rates.

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Sat Apr 13, 2013 at 11:45:03 PM PDT

      [ Parent ]

      •  Most of the increases in life expectancy... (4+ / 0-)

        ...since the Great Depression have come from reductions in infant and child mortality. Life expectancy is less impacted by a few more people living into their 90s than many more people (compared to 80 years ago) making it to 9.

        When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

        by Egalitare on Sun Apr 14, 2013 at 04:58:34 AM PDT

        [ Parent ]

        •  Please see my comment to Bruce. I have no (0+ / 0-)

          idea what the percentage is. If you do, I would appreciate it if you would tell me. Don't go to a lot of trouble, I am sure someone can come up with this off the top of their head.

          I have tried explaining that life expectancy is not the drop dead age. It is like trying to tell people that Hitler didn't confiscate guns. It doesn't work, it wastes time, and it annoys them.

          guns are fun v. hey buddy, watch what you are doing -- which side are you on?

          by 88kathy on Sun Apr 14, 2013 at 06:49:26 AM PDT

          [ Parent ]

      •  So we need to counter with 'simple' statitics. (0+ / 0-)

        When they were "dropping dead" (joke) at 65 in 1935 the cap was $6,000. And ___% (please help me here) were making above that cap, times were good. (well not really, but Hitler didn't confiscate guns so history is bendable)

        We can say as the "dropping dead" age raised the cap also raised. Which wouldn't be exactly statistically true, but we are fighting the myth of the "dropping dead" life expectancy. And we won't win that battle. They will not be dissuaded from that.

        We can say that as the "dropping dead" age raised so has the cap. Most people don't even know there is a cap. The only reason I knew is because I was in accounting at a young age. And I forgot because I found a job that was a better fit for me.

        So the argument will be you can take Grannie's spare change, you know she will give it to you, or you can raise the cap like Grannie did back in the day when every thing was so much better than it is now.

        Of course I have no idea of the actual statistics, but if the same percentage was released from FICA in 1935 at $6,000, if that is the same percentage is being released from FICA in 2013 at $110,000, then it would make sense to take Grannie's spare change. But if it's not, and I don't think it is, then someone needs to get off Grannie's back.

        Thanks.

        guns are fun v. hey buddy, watch what you are doing -- which side are you on?

        by 88kathy on Sun Apr 14, 2013 at 06:44:38 AM PDT

        [ Parent ]

  •  You appear (0+ / 0-)

    to be saying "Social Security" and meaning "Social Security Retirement".

    The serious problem is with medical coverage.

    We can have change for the better.

    by phillies on Sat Apr 13, 2013 at 09:45:34 PM PDT

    •  Medical coverage needs radical enhancement (5+ / 0-)

      I favor a National Health Service, kind of like those socialist countries have where you just go get health care as you need it, and it is taken care of by the income taxes you and everybody else pays. This system eliminates any need for health insurance you have to pay to greedy health insurance companies, eliminates for-profit hospitals, drug companies, etc. It's socialized medicine, and it works.

      Eradicate magical thinking

      by Zinman on Sat Apr 13, 2013 at 10:14:30 PM PDT

      [ Parent ]

  •  Dream Big (4+ / 0-)
    Recommended by:
    Zinman, Tim DeLaney, Hirodog, flevitan

    Let's lower the retirement age as well as increase the cap.  That would have the added benefit of creating jobs.

  •  No discussion of raising the cap, as Reagan did, (2+ / 0-)
    Recommended by:
    Zinman, flevitan

    is allowed in any effort to make SS sound. Just as no discussion of extending Medicare being to all can be allowed serious consideration when healthcare is the issue.

    We all deserve better

     

  •  Sanders, Begich, Harken (1+ / 0-)
    Recommended by:
    Zinman

    "No doubt, calling for an increase in (or the elimination of) the payroll tax cap won't be easy for President Obama. Republicans, needless to say, will reject any tax increase out of hand."

    That is, needless to say, an understatement.  There are bills out there (Begich, Sanders) but I live in a blue state. Legislators only listen to their constituents.  Pat Twomey, Rand Paul, Raul Labrador, et.al don't care what I think because I can't impact their re-election. If you're in a red state, I'm afraid you have to do the heavy lifting. It's your folks (and maybe a few conservative Democrats) who control any such bill's fate.

  •  Raise the taxable cap to 95% of total FICA income (4+ / 0-)

    It started out at 90%, and now it's down to 83%. If we had originally indexed the cap to 90%, we would not be in situation we are in now, so to compensate, we need to increase the cap to recoup lost contributions from the highest income FICA earners at a rate above 90% until the progam is secure.

    Eradicate magical thinking

    by Zinman on Sat Apr 13, 2013 at 10:02:08 PM PDT

    •  That is just what I was thinking. Back when (0+ / 0-)

      the 'drop dead' age was 65, ten percent of the high earners were released from FICA. There was a 10% cap. Times were good.

      Now-a-days the 'drop dead' age is 150 (exaggeration but you know these old farts are just living longer and longer and they are old and wrinkly and taking all our stuff) and the percentage of high earners released from FICA is 17% and climbing. Times are crap because you don't get anywhere riding on Grandma's back.

      We need to get simple with our statistics, bend history, (things were better back then when everyone paid their fair share) and present our case so a 5 year old can understand it.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Sun Apr 14, 2013 at 06:59:57 AM PDT

      [ Parent ]

      •  Old farts in stressful jobs ain't living to 150 (0+ / 0-)

        There are so many people I know with whom I worked who have died before or shortly after retirement. We were in a very stressful situation. Transitioning from having reasonable wages and benefits to having much taken away. Pay being substituted with stock at the height of it's worth and not being able to convert it until retirement at which time it was worth maybe 5-15% of the value for which it was issued. I retired early because I wasn't going to allow myself to stress out and die and not have them account- able for some of what I'd earned. Another way to eliminate benefits is to kill off the high earners by stressing them out.

        •  Not sure I am following you here. But spare change (0+ / 0-)

          from those who are excused from FICA is going to kill them because of stress? I don't think you pay FICA on stock. But I am very low on the learning curve here.

          I retired early too. Retirement is like jumping from a ladder to a balance board. It's tricky but fun if you don't fall down.

          guns are fun v. hey buddy, watch what you are doing -- which side are you on?

          by 88kathy on Sun Apr 14, 2013 at 09:31:16 AM PDT

          [ Parent ]

  •  And why, we should ask (3+ / 0-)
    Recommended by:
    Bruce Webb, Hirodog, flevitan

    is the Administration not even entertaining this suggestion?

    "The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little. " --Franklin D. Roosevelt

    by jg6544 on Sat Apr 13, 2013 at 10:26:22 PM PDT

    •  Because no one is suggesting it? Sounds to me (0+ / 0-)

      we have been spending all our time talking about what Obama wants, what Obama is thinking, what Obama promised, what Obama said, how Obama tricked us, how Obama is really against us.

      Maybe it's time we suggested it. We have the means.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Sun Apr 14, 2013 at 07:01:52 AM PDT

      [ Parent ]

      •  Good point (0+ / 0-)

        More Democrats should be stepping forward with this suggestion.

        "The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little. " --Franklin D. Roosevelt

        by jg6544 on Sun Apr 14, 2013 at 09:55:49 AM PDT

        [ Parent ]

  •  No shit (0+ / 0-)

    If only I had thought of that.

  •  No, no, NO. Drive a stake into that zombie idea. (2+ / 0-)
    Recommended by:
    Clem Yeobright, stevemb

    Raising the cap converts Social Security from an earned benefits program, or an insurance program, into a welfare program. Fine, go ahead and raise the cap, but then you'd have to pay out more to the people who contributed more in order to keep it from being a welfare program, so it wouldn't change the math.

    When a shrinking percentage of compensation is covered by Social Security tax because the wealthy are pocketing all the gains of economic growth, the answer is not to raise the cap. The answer is to stop the wealthy from pocketing all the gains from economic growth.

    It is a fact that if average Americans had shared the gains from economic growth at the same rate that they did up until 1980, Social Security would be in clover. The point is not to make the rich pay more in taxes, the point is to help everyone else earn more to pay taxes on. There are several things to do that would help.

    Appoint a Fed chairman who will make the Fed perform its statutory function, which is to run monetary policy with the aim of creating full employment.

    Strengthen unions and vigorously prosecute unfair labor practices so that employees can bargain more effectively.

    Vigorously investigate and prosecute wage discrimination because that would raise the pay and contributions of people whose pay has been suppressed by discrimination.

    Pass criminal sanctions on employers who hire workers who do not have a legal right to work in the U.S. so that employers have to pay higher wages to get their dirty jobs done.

    Raise the minimum wage, eliminate the exemption for agricultural work and index the minimum wage to inflation so that people at the bottom end economically do better and contribute more.  Then jail employers who pay less than the legal minimum wage. That would also take away some of the incentive to hire workers without valid work permits.

    ALL of Social Security's financial problems down the line are due to the class war by the wealthy that has shrunk the middle class.

    What we need is a Democrat in the White House.

    by expatjourno on Sun Apr 14, 2013 at 01:22:16 AM PDT

    •  No raising the cap keeps the percentage of (1+ / 0-)
      Recommended by:
      flevitan

      those high earners released from FICA the same as it was when this most successful program was started. It should have been a percentage then instead of a dollar amount in the first place but who knew Ayn Rand would take over everyone's mind.

      It is truly a Ponzi scheme if the percentage of those high wage earners being released from FICA keeps getting larger and larger. It just won't work. Grannie can't carry it on her back.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Sun Apr 14, 2013 at 07:07:20 AM PDT

      [ Parent ]

      •  But if you raise the cap, you have to raise the... (2+ / 0-)
        Recommended by:
        Clem Yeobright, stevemb

        ...payout to the high earners, so you are back where you started. Or, if you don't raise the payout, you've just turned Social Security into a welfare program.

        Again:

        When a shrinking percentage of compensation is covered by Social Security tax because the wealthy are pocketing all the gains of economic growth, the answer is not to raise the cap. The answer is to stop the wealthy from pocketing all the gains from economic growth.
        And:
        It is a fact that if average Americans had shared the gains from economic growth at the same rate that they did up until 1980, Social Security would be in clover. The point is not to make the rich pay more in taxes, the point is to help everyone else earn more to pay taxes on.

        What we need is a Democrat in the White House.

        by expatjourno on Sun Apr 14, 2013 at 08:38:31 AM PDT

        [ Parent ]

        •  I don't understand. I am very low on the (1+ / 0-)
          Recommended by:
          expatjourno

          learning curve on this one. Don't those with excused FICA still get Social Security along with everybody that never had any income excused from FICA?

          It seems to me that if it started out with 10% excused and now is 17% excused it is a Ponzi scheme.

          Yes I think the top earners have found a way to only get the profit and give us the loss. I remember sorting nickles and dimes with my little sister. I'll give you the big money and I'll take the little money.

          We need to come up with a way to make it fair.

          guns are fun v. hey buddy, watch what you are doing -- which side are you on?

          by 88kathy on Sun Apr 14, 2013 at 09:44:38 AM PDT

          [ Parent ]

          •  Social Security benefits are capped. So are taxes. (1+ / 0-)
            Recommended by:
            Clem Yeobright

            If you raise the cap on taxes, you'd have to raise the cap on benefits.

            The real problem is that ever since Reagan, the incomes of the vast majority of Americans have barely kept up with inflation and we have also had high unemployment because the Fed hasn't been doing its job (its monetary policy is supposed to be geared to full employment, not zero inflation).

            If wages were growing more rapidly (more people sharing the gains from productivity) and more people were employed, Social Security would have plenty of revenue coming in without raising the cap.

            What we need is a Democrat in the White House.

            by expatjourno on Sun Apr 14, 2013 at 10:25:10 AM PDT

            [ Parent ]

            •  Correction: Benefits are 'capped' only (2+ / 0-)
              Recommended by:
              expatjourno, 88kathy

              to the extent contributions are capped - which I'm sure is what you intend.

              A lot of FICA contributions are 'seed cast on barren ground', i.e., they never generate benefits at all. And other contributions are like kudzu.

              For example, many people have contribution histories that qualify them for benefits that do not come up to their 50% spousal benefits - and so their contributions are 'gravy' to SS. (Imagine how the number of such cases will increase if the cap is increased to $200k ... or will the lower-earning spouse just quit work altogether?)

              On the other hand, many people receive retirement benefits who never contributed a dime: non-working spouses, for instance. With identical contribution histories, I may receive $1800 a month while you (and your non-working wife) may receive $2700, month after month for perhaps 360 months ... Or ... did you know you can have up to 4 ex-spouses each receiving 50% of your individual benefit? So make that $6300 on your 'account' ...

              It's wage insurance and it should stay that way. I agree 100% with you.

              Too late for the simple life, too early for android love slaves - Savio

              by Clem Yeobright on Sun Apr 14, 2013 at 10:59:56 AM PDT

              [ Parent ]

  •  You could use the chained CPI to (0+ / 0-)

    adjust the taxable salary maximum up every year, to make it more palatable to Republicans.

  •  Pay in ~ payout? (1+ / 0-)
    Recommended by:
    Clem Yeobright

    Will we be raisng the payout proportionally for those who will be contributing more? If not, then this is just a straightforward wealth transfer tax? What of the insistence that SocSec is a paid-for form of social insurance, not an entitlement and not means-tested?

    •  No everybody pays in and everybody gets the (1+ / 0-)
      Recommended by:
      flevitan

      same. When the program was set up the high wage earners were released from FICA. Not many but a few. The Ponzi scheme started when more and more high wage earners were released from FICA. It won't work unless everyone pays their fair share.

      The reason it isn't means tested is because it will keep the dirt poor from starving but it will give the rich some little extras. Everybody gets the same, but it isn't the same.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Sun Apr 14, 2013 at 07:19:31 AM PDT

      [ Parent ]

      •  hmi is 100% correct. (1+ / 0-)
        Recommended by:
        nextstep

        SS is an income-insurance program.

        Income not taxed is income not insured.

        The cap is the maximum amount of income one is allowed to insure.

        Too late for the simple life, too early for android love slaves - Savio

        by Clem Yeobright on Sun Apr 14, 2013 at 08:52:12 AM PDT

        [ Parent ]

        •  I am low on the learning curve here but I always (0+ / 0-)

          thought that a person making $110,000 (or something like that) got the max and the person who paid on the first $110,000 got the max and was excused from FICA on everything over $110,00.

          I don't think you have to raise the max if you raise the cap. I don't think those are chained.

          I think the max pay out starts at something like $40,000 average pay in.  

          This is so confusing, we need to get simple on it.

          guns are fun v. hey buddy, watch what you are doing -- which side are you on?

          by 88kathy on Sun Apr 14, 2013 at 09:51:13 AM PDT

          [ Parent ]

          •  Here is the formula: (0+ / 0-)
            For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2013, or who dies in 2013 before becoming eligible for benefits, his/her PIA will be the sum of:

            (a) 90 percent of the first $791 of his/her average indexed monthly earnings, plus

            (b) 32 percent of his/her average indexed monthly earnings over $791 and through $4,768, plus

            (c) 15 percent of his/her average indexed monthly earnings over $4,768.

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

            There is no defined 'max benefit'. For an individual who delays retirement to age 70 and earned the cap for 35 years, the max by this formula (waiting until age 70 adds 32%) is about $3,500 - but virtually nobody fits that profile. But also remember that a spouse gets an additional 50% of that benefit - as do up to 4 ex-spouses!

            expatjourno has explained above that when you raise the cap either:

            (a) you retain the formula for benefits, which will result in monthly benefits in the $8k or even $10k range (plus the spousal additions, don't forget), or

            (b) you divorce benefits from contributions, which de facto makes SS a welfare program.

            Also remember that the people collecting the small benefits are the same people who tend to die young and the people who will be collecting huge benefits once the cap is raised or removed are the people who will be living into their 90s (and when one spouse dies, the other receives the higher amount of the two, i.e., the '100% amount').

            The cap is a restriction on high earners, not 'being excused'.

            For many people, SS turns out to be a good investment - and basically these people know who they are, and they aren't you and me and they live in gated communities ...

            Too late for the simple life, too early for android love slaves - Savio

            by Clem Yeobright on Sun Apr 14, 2013 at 10:10:23 AM PDT

            [ Parent ]

  •  Close, but not cap. (1+ / 0-)
    Recommended by:
    flevitan

    Eliminate the payroll tax cap and extend the obligation to support Social Security beyond those who make their money via wages and salaries.

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

    by dinotrac on Sun Apr 14, 2013 at 04:49:50 AM PDT

  •  My budget from the NY Times tool (0+ / 0-)

    Includes a few suggestions that the tool does not allow:

    Cut foreign aid in half

    Eliminate earmarks

    Eliminate farm subsidies (FOR farms above a certain size)

    Reduce nuclear arsenal BUT NOT space spending

    Reduce military to pre-Iraq War size and further reduce troops in Asia and Europe BUT find alternate employment

    Cancel or delay some weapons programs

    Reduce the number of troops in Iraq and Afghanistan to 30,000 by 2013 -- > to zero in Afghanistan. The place is too corrupt.  

    "Karzai has relied on many corrupt political and ethnic entrepreneurs and local power-holders, as well as traditional practices, to construct a power structure that revolves very much around him, his family (his three brothers, in particular) and some questionable loyalists."
    http://www.theaustralian.com.au/...
       
    Reduce Social Security benefits for those with high incomes, subject those with high incomes to payroll tax, and return taxes to Clinton era levels or higher. No mortgage deduction on third households. Tax on millionaires.

    "Your victory has demonstrated that no person anywhere in the world should not dare to dream of wanting to change the world for a better place." -- Mandela

    by agoldnyc on Sun Apr 14, 2013 at 06:07:51 AM PDT

  •  Raise the cap now (1+ / 0-)
    Recommended by:
    88kathy

    I have been writing and posting about this for years now. We have this cap that cuts off responsibility for making Social Security work for those who are making a good living, especially in states where the cost of living is lower than it is in my home state of Maryland. Those in the true middle class that struggle to make ends meet pay in on everything they make and those who are comfortable don't - can't see how this is fair.
    The two biggest problem with Social Security Trust fund is the cap and Congress's debt from their borrowing from the trust fund. At least raising the cap will solve one of them.

    Dream things that never were and ask "Why not"

    by Barry C aka Casey on Sun Apr 14, 2013 at 07:05:50 AM PDT

    •  I am thinking you are so right. Social Security (0+ / 0-)

      is becoming a Ponzi scheme when the high wage earners being released from FICA, the cap, keeps becoming a larger and larger percentage of the pool.  We're not getting anywhere on Grannie's back. It is driving our good old days into the ground.

      guns are fun v. hey buddy, watch what you are doing -- which side are you on?

      by 88kathy on Sun Apr 14, 2013 at 07:24:28 AM PDT

      [ Parent ]

      •  In 1965 30 million workers made more than the (1+ / 0-)
        Recommended by:
        Clem Yeobright

        tax cap for SS. In 2013 only 8.4 million make more than the cap. The 1% were not sucking all of income gains in those days.

        The 3 legged stool of retirement is gone. And that was a defined benefit pension, SS, and savings. Now the only defined and secure retirement people have is SS. 401ks have, as predicted by critics, failed to provide a secure income retirement for working and middle class Americans.

  •  Tax interest, dividends and captical gains (0+ / 0-)

    Yes, the cap should be raised, but why restrict the tax to wages - why not include interest, dividends and capital gains?  Now in fairness that income should also be included as qualifying you for benefits, so if you are a rentier who lives on interest income you could draw benefits (you can't now) after paying into the system all your life.  But in fact extending the tax would have a trivial effect on most of the people who actually get a significant amount of income from non-wage/salary source, but could easily cover any projected shortfall in benefits.

  •  Making a reverse SS tax (0+ / 0-)

    I know this would never be accepted by any of the congress critters beholden to corporations, but if companies don't want to pay a decent wage, have them pay 100% of the social security tax on any income someone makes under the poverty wage or what might be considered a reasonable wage. Then pro-rate upwards and the more someone makes, the higher the percentage they pay. If someone makes millions, then perhaps they need to pay 100% (12.4% or whatever) after about 500K. This might be more of an incentive for corporations to pay a decent wage to their employees. Maybe apply this to companies with more than x number of employees (ie 1000)?

    •  Please elucidate. (0+ / 0-)

      X makes $5,000 a month now, $310 of that goes to FICA (leaving $4,690) and X pays income tax on $5,000, while the employer pays $310 in FICA from pre-tax funds.

      You propose that the entire $620 come from pre-tax money.  

      Do you think X will be making - and paying personal income tax on - $5,000 a month, or $4,690?

      How does this help? What does this help?

      Too late for the simple life, too early for android love slaves - Savio

      by Clem Yeobright on Sun Apr 14, 2013 at 09:04:24 AM PDT

      [ Parent ]

  •  I'm getting mixed messages here (1+ / 0-)
    Recommended by:
    Clem Yeobright

    The general atmosphere around Daily Kos for years was "There's nothing wrong with Social Security!  It has a surplus!"  I'd tell my father this, and he'd say he'd seen the reports that Social Security is in trouble.  So I come here and read this:

    Even though the population of Americans over 65 will grow by a third over the next decade, by 2035 Social Security's share of GDP is nevertheless forecast to increase slowly from just under to a little above five percent.

    ...

    As David Cay Johnston explained, on its current trajectory Social Security will only be able to pay out three-fourths of its mandated benefits beginning in 2033

    So... there IS something wrong with Social Security.  There IS a problem that needs to be addressed.  After all the hoopla that "Social Security should be left alone," it apparently does need to be "fixed."  So, what, were we sticking our heads in the sand for all these years?

    The scene on November 6, midnight: Barack Obama holds up newspaper reading "Romney defeats Obama" as he heads to give his second term acceptance speech.

    by alkatt on Sun Apr 14, 2013 at 08:44:57 AM PDT

    •  Isn't the debate more about how we adjust SS to (2+ / 0-)
      Recommended by:
      Clem Yeobright, MacJimi

      how work changes, and incomes change, and demographics change?

      We do have a program that is solvent until 2037ish. We should not address arising problems as though the program is facing disaster. It is not. Let's stay calm and carry on.

      Wanting to adjust the SS so that more people always benefit more, and the least number of people are discomforted the least in the economic circumstance we all live in is not, is not not wanting to so anything.

  •  Eliminate the salary/wage cap (0+ / 0-)

    Just eliminate the salary/wage cap. Keep the rate the same right up the income range.

    + add-in "carried interest" & other same year earned income.

    •  What about benefits? (0+ / 0-)

      Are you ready for $25,000/month SS checks to high earners?

      And are you sure you want to insure investment income? Traditionally, Social Security is wage insurance, not investment insurance.

      Too late for the simple life, too early for android love slaves - Savio

      by Clem Yeobright on Sun Apr 14, 2013 at 10:33:26 AM PDT

      [ Parent ]

  •  I don't buy that SS needs a "fix". (0+ / 0-)

    To use the word "fix" implies that there is a problem with SS.  There isn't.  It's a notion that's been pumped up by the politicians and compliant media to soften up the country to the idea of cutting it.

    Yes, raise the cap.  I agree with that.

    The biggest threat to SS are politicians who want to raid/destroy it.

    This includes Barack Obama.

    What's the use of electing more Democrats if they're not better Democrats? Elect BETTER Democrats and the MORE will take care of itself.

    by MacJimi on Sun Apr 14, 2013 at 10:38:33 AM PDT

  •  The Payroll Tax Fix (2+ / 0-)
    Recommended by:
    paradise50, AnthonyJKenn

    There is a better fix for Social Security than raising the payroll tax cap.  The best fix is to eliminate the cap.

    •  ...true that...welcome... (0+ / 0-)
      Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

      Ignorance is bliss only for the ignorant. The rest of us must suffer the consequences.

      by paradise50 on Sun Apr 14, 2013 at 03:24:49 PM PDT

      [ Parent ]

    •  I'd prefer that... (0+ / 0-)

      ...but only if we also make the FICA tax a tad more progressive by cutting the rate for lower levels(for employees and smaller businesses)...and using some additional general revenue to supplement and actually increase benefits.

      Enacting a guaranteed livable wage and Medicare for All, as well as a stronger and far less mean social welfare state would also help greatly. A combination of MMT/HPCS and traditional liberal redistribution (cutting the military budget, progressive taxation, targeted nationalization/trustbusting) should do the trick.

      The only missing element is a political movement willing to speak the truth and deliver the message.

  •  Raising the cap on SOCIAL SECURITY (0+ / 0-)

    will solve the funding problem long term and it might also cure cancer,but we all know it'll NEVER get though this bunch of idiots who currently occupy CONGRESS.

  •  Bright shiny object, isn't it? (0+ / 0-)

    Geez I would like to sit in on a poker game with the diarist and about a dozen commenters in this diary ...

    Too late for the simple life, too early for android love slaves - Savio

    by Clem Yeobright on Sun Apr 14, 2013 at 04:21:08 PM PDT

  •  Earned, not welfare (0+ / 0-)

    Do the figures related to increasing the income basis to the historic 90% (200K income) also factor in raising benefits based on that increase?

    My fear has always been that if Social Security becomes seen as "welfare", it loses its mass power. SS is based on  what you (and your employer) have put in, modestly skewed to poorer people.  It's an entitlement, in the old sense of the word. We earned it.  It'a not only not related to the deficit (some $2 trillion in surplus to take care of us baby-boomers)  but it is something the government should not have any say in.

  •  Raising the cap on payroll (0+ / 0-)

    taxes is not actually deficit reduction under the current budget rules.  If Social Security collects more money then it pays out that money is placed in a special treasury bond that is then counted towards the deficit.  Now this isn't to say that it would be bad or anything.  But an increase in pay under current circumstances would increase the top line deficit numbers in so far as, for example, the debt ceiling is concerned.

    Our virtues are usually only our vices in disguise. La Rochefoucauld

    by Parmenides on Tue Apr 16, 2013 at 11:38:00 AM PDT

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