Senators eye Social Security reforms as some in House GOP consider cuts

[Gunny]

I'm all for "cuts". Starting with Congressional pay and perks. Any three (wild guess) people on social security could live on one Congressman's pay/perks. No guessing who I think should put their money where their mouths are.

https://thehill.com/policy/finance/3...consider-cuts/

[fj1200]

It's a dumb idea to tie solving a long-term, some-day problem (SS insolvency) to a short-term crisis (debt limit negotiations). There was some hope in that piece that has a few Senators from both sides coming together with ideas that can lead to a passable solution; you know, how Congress used to work.

I bet I could come up with a passable law tomorrow if only some Senator would come asking.

[Kathianne]

It's a dumb idea to tie solving a long-term, some-day problem (SS insolvency) to a short-term crisis (debt limit negotiations). There was some hope in that piece that has a few Senators from both sides coming together with ideas that can lead to a passable solution; you know, how Congress used to work.

I bet I could come up with a passable law tomorrow if only some Senator would come asking.

Read this this a.m., very related:

https://www.wsj.com/articles/debt-ce...on_featst_pos1

...

A Democratic political aide told the Washington Post that one Republican debt-ceiling plan with partial spending, known as prioritization, “is just target practice for us.” Perhaps, but I’m not sure Republicans have to be the clay pigeons in this fight.


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The endgame is not in question. The debt ceiling will be raised. What happens between now and the June deadline is a messaging competition. Who will the public blame if the U.S. goes to the brink of default?


Democrats assume spending brinkmanship tags Republicans as willing to push grandma off the cliff—and only after the GOP has conducted several circular firing squads. Kevin McCarthy’s GOP nemesis, Rep. Andy Biggs, has already pushed for refusing to raise the ceiling. Why should this time be different?


Because it is different. Federal spending for most people normally runs as background noise. But the Democrats’ assumption that voters don’t notice spending may be wrong and for a familiar reason: the pandemic.


The pandemic put the federal government inside everyone’s head, and what the government did was spend, spend, spend money, money, money.


The spending rivers included a bipartisan Covid-relief bill of $2.2 trillion; the American Rescue Plan’s $1.9 trillion, and then a bipartisan infrastructure bill of $1 trillion. Mr. Biden’s 2023 budget proposal was for $5.7 trillion. In December he signed a $1.7 trillion spending bill.


But that’s not all.


Amid the traditional trillions, Democrats ostentatiously added a permanent spending commitment for climate and clean energy subsidies. And already that isn’t enough, as Al Gore’s rant and Mr. Kerry’s plea made clear in Davos...

The question at the center of this is, How indeed do we “control” spending? Conventional wisdom holds that trying to do anything about the Social Security or Medicare black holes is political suicide. Is it?


The Peterson Foundation’s Fiscal Confidence Index says 76% of respondents think deficit reduction should be one of Congress’s top three priorities. Other polls confirm that concern.


Automatic entitlement spending is about 63% of the federal budget. Medicare’s trust fund runs out of money in five years and Social Security’s in 2037.


Do grandma and grandpa, living in their Florida condos, really think, “I got mine, screw my children and grandchildren”? In fact, every other oldster one talks to today thinks his kids and grandkids are already screwed, one way or another. And that’s bipartisan. We may have reached a point where it’s possible to have a conversation about fiscal cliffs.


To repeat, the debt ceiling will be raised. Republicans shouldn’t get bogged down pitting program against program. But Republicans do have a rare moment of opportunity to frame the spending narrative.


The keyword isn’t “debt ceiling.” It’s the ceiling’s fantastic figure—about $31.4 trillion.

...

[fj1200]

Do grandma and grandpa, living in their Florida condos, really think, “I got mine, screw my children and grandchildren”?

I'm not sure I want to bet my political future on the answer being "no," at least in the manner of Republicans doing anything in lock step that can be easily demonized. It's gotta be done but if conversations we've had on this site with hard-charging, small-government, Constitution-loving citizens easily falling back on "mine" then it's a tough road.

[Kathianne]

I'm not sure I want to bet my political future on the answer being "no," at least in the manner of Republicans doing anything in lock step that can be easily demonized. It's gotta be done but if conversations we've had on this site with hard-charging, small-government, Constitution-loving citizens easily falling back on "mine" then it's a tough road.

I agree. I've paid into the system since I began working well over 50 years ago. I'm 'entitled' to the max thanks to my poor choice in spouse. So far I've chosen not to enroll. For same reason did not collect any covid monies-in my mind it's stealing from the future. For those that were stricken or because of draconian actions of local government, totally understand. That isn't most people though in those dire straits.

Ignoring my own philosophy, basic math says the system IS unsustainable, thus cannot be sustained. https://www.wsj.com/articles/byron-d...on_featst_pos2

...

Mr. Donalds told Ms. Reid that House Republicans plan to use their new majority to take a hard look at entitlement spending, noting that without action, “Social Security is going to be insolvent in 2035.” Ms. Reid, who is often wrong but seldom in doubt, shot back, “That’s not true!” When Mr. Donalds attempted to explain the math, Ms. Reid shook her head and repeatedly shouted over him, “That’s actually not true!”


Except it is true. A Congressional Research Service report from last year projected that “the combined Social Security trust funds will become depleted in 2035.” A separate Congressional Budget Office assessment released last month was even more dire. “In CBO’s projections, spending on Social Security exceeds revenues to the program in 2022 and increases relative to GDP over the next 75 years, while revenues remain stable. If combined, the program’s trust funds would be exhausted in 2033.”


To his credit, Mr. Donalds stood his ground. “Those are the facts. Should we not prepare for that?” he asked. Ms. Reid’s response was to accuse her guest of wanting to privatize Social Security and subject it to the “whims of the market.” Mr. Donalds said that he opposed Social Security privatization but added that if the entitlement had been subjected to market trends, it would be in much better shape: “If you look at the returns of the S&P 500 since 2006 until today, the growth rate of the S&P 500 would have more than taken care of Social Security, way more than the federal government has.”
...

The kindest and fairest remedy would take into account those truly dependent on SSI today. Come up with some system that pays back what people have paid in, while decreasing the amounts withheld from earnings. Where this could have been slowly phased in 50 years ago, the end game is racing towards us now.

[fj1200]

I agree. I've paid into the system since I began working well over 50 years ago. I'm 'entitled' to the max thanks to my poor choice in spouse. So far I've chosen not to enroll. For same reason did not collect any covid monies-in my mind it's stealing from the future. For those that were stricken or because of draconian actions of local government, totally understand. That isn't most people though in those dire straits.

Ignoring my own philosophy, basic math says the system IS unsustainable, thus cannot be sustained. https://www.wsj.com/articles/byron-d...on_featst_pos2

The kindest and fairest remedy would take into account those truly dependent on SSI today. Come up with some system that pays back what people have paid in, while decreasing the amounts withheld from earnings. Where this could have been slowly phased in 50 years ago, the end game is racing towards us now.

And with the way information is tribalized today it's not going to just be the Ms Reids of the world it's every knucklehead with a youtube channel that will spout the same garbage. How can we even start to discuss a solution when there is obstinant ignorance as to the facts. And these are government, bipartisan facts.

Anything going forward needs to recognize the realities of the needs of many and not the repayment of "paid in" because that's exactly why it's unsustainable. I think any Dem solution of just raising the income cap is, and should be, a non-starter because that just perpetuates the myth of a government retirement plan. There are many things wrong with SS as it stands (looking at you tax on entry-level jobs) but it's probably to much of a pipe-dream to fix more than one, if we fix any at all.

[Gunny]

It's a dumb idea to tie solving a long-term, some-day problem (SS insolvency) to a short-term crisis (debt limit negotiations). There was some hope in that piece that has a few Senators from both sides coming together with ideas that can lead to a passable solution; you know, how Congress used to work.

I bet I could come up with a passable law tomorrow if only some Senator would come asking.

I very much agree in regard to tying long-term problems to short-term crises.

Correct me if I'm wrong, but isn't it the House Republican't's that just amended House rules to one for one Bills? Now they want to tie something to the single issue of the debt ceiling?

There is so much waste in government I wouldn't doubt there's a simple fix for the SS problem. Not sure about your ideas, but I'd start with the Federal government's "pocket money", being our tax dollars.

[Gunny]

And with the way information is tribalized today it's not going to just be the Ms Reids of the world it's every knucklehead with a youtube channel that will spout the same garbage. How can we even start to discuss a solution when there is obstinant ignorance as to the facts. And these are government, bipartisan facts.

Anything going forward needs to recognize the realities of the needs of many and not the repayment of "paid in" because that's exactly why it's unsustainable. I think any Dem solution of just raising the income cap is, and should be, a non-starter because that just perpetuates the myth of a government retirement plan. There are many things wrong with SS as it stands (looking at you tax on entry-level jobs) but it's probably to much of a pipe-dream to fix more than one, if we fix any at all.

I disagree with your opinion on "mine" and "paid in". That has to be accounted for. Arbitrarily changing the system on a dime pulls the rug out from everyone who has already contributed and based their retirement on that plan. Again pointing out this is and was not anything voluntary.

While there may be many workable fixes for this issue, it has to include grandfathering people who are/were, for whatever reason, forced into a system that they're stuck with. Otherwise, you're just fixing one problem while creating another that is equal in size/scope to the original.

[Kathianne]

I just did a quick search on 'original purpose of social security.'

This group of lawyers appear not to have a dim view, though realistic of what's happening with SSI. If you read what's above what I'm about to quote, you'll see what I'm referring to. One thing that's there is something to effect: "Created towards the end of Depression..." 1935 was not end of recession, not really close. Just saying:

https://www.lawyers.com/legal-info/s...-it-works.html

...

Today, unemployment insurance isn't covered by the Social Security Act. Instead, it's handled by a joint state-federal program. But the Social Security Act now provides for Medicare, a health insurance program for those over 65 who've paid Medicare taxes. Disabled workers receiving SSDI can also get healthcare benefits through Medicare (after a waiting period).


What Else Does the Social Security Act Provide?
In addition to retirement insurance, disability insurance, and survivor's insurance, the Social Security Act and related laws also cover the following programs:


Supplemental Security Income (SSI)
special veterans benefits
public assistance and welfare services, including:
temporary assistance for needy families (TANF)
medical assistance
mother and child health services
child support enforcement
family and child welfare services
food stamps (SNAP), and
energy assistance.
The Future: Will Social Security Run Out of Money?
Each year, the trustees of the Social Security trust funds make projections about how long the trust funds will last. According to the most recent report from SSA officials (dated February 2022), the benefits paid out by the Social Security retirement program are now more than the amount paid into the trust fund (and the interest created by the trust fund) and will continue to be unless Congress changes the Social Security Act.


The year 2021 was the first year that Social Security paid more out of the trust fund than the total income that came into the trust fund. In other words, 2021 was the first year that the SSA had to use the trust fund to pay retirement benefits.


Social Security Retirement Shortfall
Because of the difference between the money coming in and the money going out of the Old-Age and Survivors Insurance (OASI) Trust Fund (which pays retirement and survivors benefits), the fund will run low on cash. The OASI is expected to continue to pay retirement benefits in full until 2034, when the trust fund is expected to run out. After that, retirement benefits will rely on continuing payroll tax income, which will cover only 77% of the scheduled benefits.


These projections are based on the current Social Security tax rates. The forecast would change if something is changed to increase the money going into the trust fund or to decrease the amounts being paid from the trust fund.


Disability Benefits Fund Projection
The health of the Disability Insurance (DI) trust fund has continued to improve since Congress passed legislation to address shortfalls in 2015. The combined effect of that legislation and a decrease in the number of disability applications over the past several years has improved the projections for the DI trust fund. It's currently projected to be able to pay all scheduled benefits for at least the next 75 years (the length of the SSA's projection period).


Addressing Social Security's Deficit
The shortfall in retirement funds Social Security is projected to face could be addressed in one of two ways:


raise more revenue, or
pay out less.
Currently, the Social Security payroll tax is 6.2% paid by the employer and 6.2% paid by the worker. But only the first $147,000 in income is taxed—neither you nor your employer pays Social Security tax on anything you earn above that payroll tax limit. While there have been suggestions to raise the payroll tax limit (or to apply the payroll tax to 90% of everyone's earnings), or to raise the retirement age to 70, it might take years before anything is done to shore up the trust fund.

[Gunny]

I just did a quick search on 'original purpose of social security.'

This group of lawyers appear not to have a dim view, though realistic of what's happening with SSI. If you read what's above what I'm about to quote, you'll see what I'm referring to. One thing that's there is something to effect: "Created towards the end of Depression..." 1935 was not end of recession, not really close. Just saying:

https://www.lawyers.com/legal-info/s...-it-works.html

I have read that list before, or a something similar. Hindsight's 20/20. I can honestly say that if if I could have foreseen today in 1976, I most assuredly would have tied my fortune to something other that the US Federal government. At the time, Federal government retirement was one of the few "guaranteed" retirements. The US Federal government would have to go bust to lose it.

I have since watched my military benefits eroded every time Congress wants to rework itself a deal to "save" money aka give itself a raise. Now they're eyeing social security. As they started selling in the 90s, military retirement is not to be considered stand-alone retirement, and social security the same. They are however supposed to be part of retirement.

It's not okay with me to take away something that has already been earned.

I am not sure how it is handled now, but the reality of what social security is really isn't hammered home when you start out in the work force. "Sign this if you want to work. It's your SS retirement that will be involuntarily removed by government with your each paycheck".

Maybe they ought to call it something besides retirement. Same with the military.

[fj1200]

I very much agree in regard to tying long-term problems to short-term crises.

Correct me if I'm wrong, but isn't it the House Republican't's that just amended House rules to one for one Bills? Now they want to tie something to the single issue of the debt ceiling?

There is so much waste in government I wouldn't doubt there's a simple fix for the SS problem. Not sure about your ideas, but I'd start with the Federal government's "pocket money", being our tax dollars.

I don't know about one-for-one. It's all political theater that is probably impossible to actually accomplish.

There's nowhere near enough waste in DC to cover future SS shortfalls.

I disagree with your opinion on "mine" and "paid in". That has to be accounted for. Arbitrarily changing the system on a dime pulls the rug out from everyone who has already contributed and based their retirement on that plan. Again pointing out this is and was not anything voluntary.

While there may be many workable fixes for this issue, it has to include grandfathering people who are/were, for whatever reason, forced into a system that they're stuck with. Otherwise, you're just fixing one problem while creating another that is equal in size/scope to the original.

Then there will be no fixing SS because people will whine about their "entitlements." Not to mention that those at the higher pay ranges are already not going to get what's been "paid in" and in 2035 or thereabouts depending on if projections are correct then there will be an automatic reduction of benefits. So the question becomes do we let some sort of planned reduction that was decided on probably 40 years ago occur or does it get fixed with the realities of today?

I'm sure that any fix that might happen, or one that I might could come up with, is not going to leave anyone destitute. If I'm not mistaken SS was never meant to be a retirement plan, more a welfare type system probably (without calling middle class people welfare queens of course ), but because government is the poster child for unintended consequences that is what many people have treated it as.

I see two possibilities; 1. The just-raise-taxes (Dem) plan of just eliminating the cap on SS taxes with no payout changes = the rich paying the bill, or
2. The not just-raise-taxes plan of limiting the payouts for those that are receiving the most but have other retirement assets = the rich getting the shaft.

Either way the rich take it on the chin. I'd rather we not perpetuate a horrible government program with perverse incentives and not destroy our global competitiveness by instituting a shadow 13% income tax hike. But that's me.

[Kathianne]

I don't know about one-for-one. It's all political theater that is probably impossible to actually accomplish.

There's nowhere near enough waste in DC to cover future SS shortfalls.



Then there will be no fixing SS because people will whine about their "entitlements." Not to mention that those at the higher pay ranges are already not going to get what's been "paid in" and in 2035 or thereabouts depending on if projections are correct then there will be an automatic reduction of benefits. So the question becomes do we let some sort of planned reduction that was decided on probably 40 years ago occur or does it get fixed with the realities of today?

I'm sure that any fix that might happen, or one that I might could come up with, is not going to leave anyone destitute. If I'm not mistaken SS was never meant to be a retirement plan, more a welfare type system probably (without calling middle class people welfare queens of course ), but because government is the poster child for unintended consequences that is what many people have treated it as.

I see two possibilities; 1. The just-raise-taxes (Dem) plan of just eliminating the cap on SS taxes with no payout changes = the rich paying the bill, or
2. The not just-raise-taxes plan of limiting the payouts for those that are receiving the most but have other retirement assets = the rich getting the shaft.

Either way the rich take it on the chin. I'd rather we not perpetuate a horrible government program with perverse incentives and not destroy our global competitiveness by instituting a shadow 13% income tax hike. But that's me.

I agree with ending the program for most citizens. Let people keep their money and invest themselves. More money from known sources into the economy. Incentives to save and invest. Some ending of propping up medical/insurance/pharmaceuticals by government. More efficient and likely more responsive medical community.

[Gunny]

I don't know about one-for-one. It's all political theater that is probably impossible to actually accomplish.

There's nowhere near enough waste in DC to cover future SS shortfalls.



Then there will be no fixing SS because people will whine about their "entitlements." Not to mention that those at the higher pay ranges are already not going to get what's been "paid in" and in 2035 or thereabouts depending on if projections are correct then there will be an automatic reduction of benefits. So the question becomes do we let some sort of planned reduction that was decided on probably 40 years ago occur or does it get fixed with the realities of today?

I'm sure that any fix that might happen, or one that I might could come up with, is not going to leave anyone destitute. If I'm not mistaken SS was never meant to be a retirement plan, more a welfare type system probably (without calling middle class people welfare queens of course ), but because government is the poster child for unintended consequences that is what many people have treated it as.

I see two possibilities; 1. The just-raise-taxes (Dem) plan of just eliminating the cap on SS taxes with no payout changes = the rich paying the bill, or
2. The not just-raise-taxes plan of limiting the payouts for those that are receiving the most but have other retirement assets = the rich getting the shaft.

Either way the rich take it on the chin. I'd rather we not perpetuate a horrible government program with perverse incentives and not destroy our global competitiveness by instituting a shadow 13% income tax hike. But that's me.

Accounting for the word "entitlement" being a dirty word nowadays, in the strictest definition of the actual word, one is "entitled" to what one has invested with the guarantee/expectation of a return. I am not saying anyone should get anything they are not due. But taking from those who have already earned what they are due is no less robbery than forcing the wealthy to foot the bill.

Unintended consequences? IMO, that social security is seen as a retirement plan is a purposeful lie by omission by the government. I never really knew what it was exactly until I researched it myself. Now, they force you to sign your kids up at birth. When I was 16 and getting a legit, taxable job, it was go down with your birth certificate, fill out the form and you get a card that represents the government helping itself to your pay that it is going to save for you for when you retire. That's the deal. It isn't okay to change the deal at the 11th hour.

Regardless, government could and should pay for any of these shortfalls from the money it already extorts from us. It isn't that the money isn't there. It's that the bureaucracy is mis-spending it on itself, mostly chasing its own conspiracy theories.

[fj1200]

I agree with ending the program for most citizens. Let people keep their money and invest themselves. More money from known sources into the economy. Incentives to save and invest. Some ending of propping up medical/insurance/pharmaceuticals by government. More efficient and likely more responsive medical community.

Are you moving into fixing Medicare too? That's its own nightmare.

[fj1200]

Accounting for the word "entitlement" being a dirty word nowadays, in the strictest definition of the actual word, one is "entitled" to what one has invested with the guarantee/expectation of a return. I am not saying anyone should get anything they are not due. But taking from those who have already earned what they are due is no less robbery than forcing the wealthy to foot the bill.

Unintended consequences? IMO, that social security is seen as a retirement plan is a purposeful lie by omission by the government. I never really knew what it was exactly until I researched it myself. Now, they force you to sign your kids up at birth. When I was 16 and getting a legit, taxable job, it was go down with your birth certificate, fill out the form and you get a card that represents the government helping itself to your pay that it is going to save for you for when you retire. That's the deal. It isn't okay to change the deal at the 11th hour.

Regardless, government could and should pay for any of these shortfalls from the money it already extorts from us. It isn't that the money isn't there. It's that the bureaucracy is mis-spending it on itself, mostly chasing its own conspiracy theories.

With all due respect I don't think any of that is possible.

There shouldn't be any guarantee or expectation of return with a government program. The rich are already footing the bill.

It's on track to get changed and is unsustainable.

No chance it could or should without spending nothing on everything but SS and Medicare. Federal spending projected, from 2018, prepandemic, which means it's worse now.