The Associated Press reports that House Republicans are proposing benefits cuts as a price for reopening the government. The article does not specify Social Security cuts but it's hard to imagine this proposal not including the chained CPI proposal to cut Social Security's Cost Of Living Adjustments (COLA).
13 comments:
Why would either party agree to any concessions to "reopen" the government. Most functions are already back in operation and it won't be long until those that are still closed are determined to be "essential"
Permenant cuts to COL in exchange for 6 weeks of the federal budget at sequester levels, who could say no?
Maybe because the Nuclear Regulatory Commission just furloughed most of its staff. The federal courts will start furloughing support staff late next week. Money for programs like WIC will soon run out. While some things have improved (for example, ODAR staff have been recalled and deemed "excepted"), most problems are still set to occur.
People: we all know Social Security has a $2.8 trillion trust fund- as in surplus. The only honest party here is the SSA which says S.S. can pay full benefits for at least 20 years
The federal government is about to
R O B. US.
ORGANIZED MASS RESISTANCE WILL BE NEEDED TO STOP THIS.
THE PRESIDENT HAS NO LOYALTY TO SOCIAL SECURITY. HE IS NOT A DEMOCRAT. HE IS NOT A PROGRESSIVE. HE WANTS TO CUT IT AND WILL DO SO UNLESS WE STOP HIM.
Not to cause any alarm, but it could involve more than Chained CPI. Why?
Because it is a long term measure to reduce program costs. The feds still have to deal with shortfalls of about $40-50B per year and increasing. Ya know, the well-forecast shortfalls associated with the boomers retirements that we paid extra into the trust fund to handle?
Of course, those working aren't getting paid. A promise of future payment doesn't pay a mortgage.
Anonymous stated we have a $2.8 trillion Social Security surplus which will last for 20 years.
It sounds like there is all this money in reserve waiting to be paid, with no budget ramifications for 20 years.
Is that what you are saying?
How do you reconcile your surplus theory with the other anonymous who stated the trust fund had $40-50 billion a year shortfalls, and they are increasing?
How can a surplus have a shortfall?
Don Levit
The SS trust fund is a fiction. The money is gone. Either taxes have to be increased or benefits cut. Or both. Obummer is a fraud, more fraudulent than the disability program...if that's possible.
Don Levit
Are you disagreeing with the SSA when they say that the trust fund can pay full benefits for 20 years?
Of course there are budget ramifications in paying back what is owed. And of course there is no money laying around for this use. The point is that the government has an obligation. And the SSA is expecting them to honor that obligation. Implicit in the word "bond" is obligation to repay and represent a claim on the treasury.
When I take out a car loan from my bank, I enter into a contract to repay the money plus interest. Those monthly payments may hurt my bottom line. The bank doesn't care how I raise the money, just that they are repaid. If I've been spending too much on groceries, its up to me to make an adjustment so I can repay the car loan. It's not the banks problem.
Repayment does not have to be a burden on successive generations. It's a question of priorities. Do we as a country want to continue spending massive amounts of money on the military, or do we want to have a strong safety net? Do those in power continue to strongly resist raising the FICA ceiling,
or do require the rich to pay back what enabled them to pay lower taxes?
I really don't see the point of your post other than to be argumentative.
I agree. Yeah, we get it--the money isn't "there" in the trust fund a la scrouge mcduck's gold coin room. As 4:55 astutely stated, it doesn't matter whether the cash is on hand or not, the money has been raised already (though spent on other things) and is obligated to be paid as benefits.
It would be out and out theft if benefits are cut or adjusted such that less of that money already collected and earmarked to go towards SS payments did not actually do so. That's what we're saying. But you're still really cool and smart for pointing out the "fiction" of the trust fund due to the fact that all that money isn't actually physically sitting somewhere ready to be spent right now.
I agree with the last 2 comments.
As my grandfather stated " "What you owe, you owe. What you own, you may not own."
He considered liabilities to be more important than assets, for others were depending on your paying back your liabilities. The money should have stayed in the trust fund, according to law, to be used exclusively for SS beneficiaries. The fact that the money was spent and Treasuries were issued as collateral, means the money must be paid back. And I do not mean "rolling over" the principal and interest. I mean paying it back. The suggestions offered of how to pay it back were very helpful. We do not have to wait for a budget surplus to do so. That may not happen again in our lifetimes.
Don Levit
Obama already stole $500 billion from Medicare and gave it to Obamacare. So why not take and not repay much, much more from SSA to pay for whatever Obama considers necessary and essential? After all, he is wise, full of hope and change. How come when they speak of entitlement reform, it is from Medicare and Social Security Title II - the "insurance" programs people have been paying for in order to receive earned benefits when they become eligible. However, little or nothing is said about reform for the unearned benefits programs such as SSI, welfare, Obamaphones, Medicaid, subsidized housing, food stamps, etc. Do not hurt them or expect responsible behavior, just add more and more people to these programs, increase dependency, and be sure their rights are protected. Then to top it off, let's legalize many millions of people illegally in the USA so they can get these needs based vs. earned based benefits! One more thing, be sure ineffective or no voting protections exist so efforts to turn around this increasing disaster will fail. Idiocracy rules !!!!!!!!!!!
Here's what I believe the feds are up to (your response is appreciated):
Over the past several years, well-forecast cash shortfalls in the neighborhood of $40-50B have been occuring in Social Security. These are associated with the start of the boomers retirements, the economy and increasing wealth inequality. Money from the general fund has made up the difference.
My belief is that the goal of the feds is to cut benefits in order to end these shortfalls. Once a money in equals money out balance is achieved and continued, the trust fund of $2.8T is never repaid. The treasuries held by the SSA are not defaulted on, but they're redeemed either. It's also not impossible that the feds may actually go beyond the break even point, such that FICA taxes are more than what is required to pay the reduced benefits.
Of course, Social Security has not yet been cut, and it's possible that it won't end up happening in the short term. However, that seems unlikely.
As it stands now, the money in the trust fund represented by the bonds it holds has been - borrowed. The day that Social Security cuts of any kind become law, that changes everything. The borrowed money truly becomes stolen money. The repercussions of that are truly unknown.
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