The Social Security Trustees Report has been released. Here's a summary from a Social Security press release:
- The asset reserves of the combined OASDI [Old Age, Survivors and Disability Insurance] Trust Funds increased by $23 billion in 2015 to a total of $2.81 trillion.
- The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning in 2020, the total cost of the program is projected to exceed income.
- The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034 – the same as projected last year. At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.
9 comments:
The easiest way to "fix" Social Security is to increase revenue, for example through an increase in the payroll tax or an increase in the cap (benefit cuts, in addition to being very unpopular, would take a long time to have a significant effect, since current beneficiaries and near-retirees would be protected, while revenue increases have an immediate effect). When the GOP comes out in favor of revenue increases, then I will believe that they think there is a problem.
The Trustees Report shows little change from last year (a slight improvement). The combined trust fund depletion date is still 2034, so we're a year closer to that. Still, that's 18 years away, so there's no need to do anything now. Ten years is plenty of time to phase in a payroll tax increase. There's only a rush if you want to cut benefits, but I think it's too late for that.
Why not make foreign workers pay ss tax if they are in another country working for a US company
@arijax - that's got to be the dumbest thing I've ever seen posted on this blog.
You might as well say "Why don't we make Russian oligarchs and Saudi monarchs pay ss tax"... In what world could the US legally impose an income-based tax on a non-resident non-citizen? How would we collect it? How could we enforce it?
A five step program to fix social security:
* increase the number of jobs (working people pay social security and medicare taxes)
* make it easier for self employed people and all businesses to be successful (if they have bigger net profits they pay more social security and medicare taxes and employ more people)
* incentive work by reducing taxes on earned income
* incentive work by deducting 25% (maybe more) of FICA taxes paid from any taxable income
* discourage businesses from outsourcing or transferring jobs outside of the USA via additional or increases in various taxes, fees, and duties (foreign workers do not pay social security or medicare taxes)
Some actions may be in effect for a specific period of time (two years, three years or ?) to provide a jump start to encourage action and they may be modified or extended based on success.
At his confab last Spring, former congressman Earl Pomeroy hit it right on the head when he said that nothing is done on the Hill until the last minute. In other words don't hold your breath or get worked up over the solutions being bandied about. In addition, draconian cuts to currently scheduled benefits is highly unlikely. Why? Imagine the elected life expectancy of a politician who screws over tens of millions of voting Social Security recipients.
Impose it on the company. Genius
1) capitalists won't create new jobs until it is in their economic interest to do so. This pretty much means there has to be more demand. Demand is almost entirely generated by direct spending. You want more jobs, have more people spending more money. Best way to do that is to give not-rich folks more money back (the wealthy by and large have maxed out their consumption and would not spend any additional dollars they were given--they would most likely passively invest it)
2) This is silly. You increase FICA at the expense of general revenues. I don't need to expound on this; it should be self-evident why this is a terrible idea.
3) This can be a huge part of the solution, but it really hinges on what your definition of "income" is and how the tax breaks would be structured.
4) Same as 3), though I am always skeptical of cutting from the revenue side of the equation. Cutting revenue has an immediate, actual effect on our budget whereas the promises of growth, etc. from cutting taxes have like 56,894,323,542,345 steps between the cut and the benefit, and the data from the last few decades seem to suggest cuts don't make GDP grow like gangbusters...
5) you start adding tariffs, etc. left and right and see what happens. We aren't the only big boy at the table anymore, we can't just dictate the economic terms of the world anymore.
Flat Tax on all spending 20% across the board. That will get all the people that work under the table. I know 2 people that haven't paid into SS for over 15 years.
Charles, it's true the trust fund (IOUs) went up $23 billion but it is just a matter of time before it starts going down. I look forward to the day the trust fund is gone and Social Security is a 'pay as you go' system.
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