Republican leaders left Social Security untouched in their House budget this year, but a group of GOP lawmakers are looking to fill the gap themselves with legislation that would create a voluntary privatized version of the program.
Introduced by Rep. Pete Sessions (R-TX), who also chairs the House's campaign efforts at the NRCC, the "Savings Account For Every American Act" would allow people to immediately opt out of Social Security in favor of a private "S.A.F.E." account. Eventually the program would expand to let employers send their matching contribution to workers' Social Security to a "S.A.F.E." account as well.
"Our nation's Social Security Trust Fund is depleting at an alarming rate, and failure to implement immediate reforms endangers the ability of Americans to plan for their retirement with the options and certainty they deserve," ...
From from ending the "depletion" of the Social Security trust funds, this plan would completely deplete them quickly, probably in less than ten years because it would quickly become obvious that there would not be enough money available to pay Social Security benefits for more than a few years. Continuing to pay FICA taxes would be pointless because there would be no chance of future benefit payments. This plan could only work if Social Security were already fully funded but the authors of this plan are claiming that Social Security cannot be trusted because it is not fully funded!
I have a modest plan of my own for those who want to opt out of Social Security. Everything stays the same as now until a person reaches full retirement age. Once an individual reaches that age they could take back all of the FICA taxes they ever paid plus a generous imputed interest rate as a lump sum. In return, they and all others who might be eligible on their Social Security number would be permanently ineligible for benefits under both Titles II and XVI of the Social Security Act. Yes, I know, it's unworkable because few other than those who expect to die soon would take the deal. Also, it wouldn't be fair to allow a man to deprive a despised former wife of benefits on his account, for instance. However, it 's conceivable that one could come up with ways of dealing with these and other related issues. My "plan" comes a lot closer to working than the plan put forward by these few Republicans. I wonder how many people would take this deal and how quickly most of them would become destitute and homeless.
The Amish and others with similar religious beliefs can (and often do) opt out of Social Security. Granted these religious communities take care of their elderly and disabled. While this solution would not work for many, it does demonstrate that a person can opt of Social Security and still have his or her needs met in their elder years.
ReplyDeleteAlso, do not forget that SSI comes from the general fund, not FICA or SECA. If you opted out of Social Security, wasted the money in your SAFE account (or experienced some unexpected sizeable expense that drained the account), you would likely see your income drop low enough to qualify for SSI, providing a safety net (albeit not the most desireable one) for both income and medical care.
Rather than the S.A.F.E. plan it is the S.T.U.P.I.D. plan!!! They will never give up trying to eliminate the Social Security Programs.
ReplyDeleteA5:13 cites the Amish as an example that "a person can opt out of social security and still have his or her needs met in their elder years".
ReplyDeleteThe Amish community takes care of its own, whatever comes. Who is going to fulfill that function for anyone else? Don't count on your kids, unless you have exceptional children willing to sacrifice for you. Don't count on the stock market, because it's nothing but a variation of gambling rigged against the "little guy". Social security is a social insurance program which works as designed, to provide monetary help when earnings are lost due to death, retirement, and disability.
Query: how much does anyone get back from other insurance policies, say, on his/her house? Personally, in over 30 years, I've gotten nothing and I hope never to have to file a claim on my house --but I am glad to pay the premium to have the peace of mind.
While SS is supposed to be funded by payroll taxes, we know that only the current benefits are paid through payroll taxes.
ReplyDeleteThe excess payroll taxes and interest have already been spent, so, from a budget perspective, the trust fund has been depleted.
The budget perspective considers the actual cash flow the trust fund has on the budget. It recognizes the interest credited, the interest redeemed, and the principle redeemed has an immediate budget impact.
The more limited, less objective trust fund perspective considers the trust fund a source of wealth. But, that is only from an accounting perspective, not an actual outlay perspective, which is how our budget is base - on actual cash inflows and outflows.
Forr example, from the trust fund perspectrive Medicare Part D is full funded.
Don Levit