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| Trust Funds Ratio -- Asset Reserves As Percentage Of Annual Cost |
The CRFB was formed by the late Pete Peterson, who spent a good part of his fortune campaigning against Social Security. This website displays the sort of tilt that one might expect. It uses the euphemism "Slow Benefit Growth" for dramatic cuts in benefits. The website projects that investing part of the Social Security trust funds into stocks and bonds would solve 22% of the long term funding problem. Sure, if you make assumptions that cannot be proven and you ignore the risks involved. While diverting trust fund assets to stocks and bonds remains a Wall Street pipe dream, otherwise even the right wing has pretty much given up on the idea. This website also includes a proposal that would absolutely gut Social Security disability that almost no one even on the right is calling for. On the other hand, the website ignores serious proposals for devoting estate tax revenues to the Social Security trust funds. Billionaires don't want anyone even thinking about estate taxes.
Still, it's a useful introduction to the issues involved.
1. Subject all wages to payroll tax.
ReplyDelete2. Cover newly-hired state and local workers.
3. Apply the payroll tax to cafeteria plans.
4. Increase retirement age to 69 then indexing to longevity.
5. Index COLA to CPI-E.
6. Calculate benefits based on highest 38 years.
7. Apply benefit formula to the highest 35 years.
That would make the programs fully solvent. Not sure how those last two options aren't contradictory.
Fun website.
I still suspect the insolvency is just a matter of baby boomers retiring while the workforce has not seen notable wage growth for the past 2 decades, and population growth not increasing at a rate of the baby boom, making the ratio of workers' taxable earnings to beneficiaries low in the short-term.
I wish they would add an option to stop taxing benefits. I get the logic of it and am not arguing the benefits can't be taxed, but it just seems counterproductive. Maybe even cut benefits to at equivalent degree that benefits are taxed, so net neutral. Just seems like a waste of time and effort to make disabled/retirees file taxes and IRS process taxes, when you could just find a way to cancel it out. I also imagine SSA must devote some sort of effort to this arrangement, so administrative costs might even go down slightly.
Even modest increases in rates (0.6% with tax on up to 90% of income and benefit reductions to the highest earners only) and reductions could easily solve this. Coming up with solutions isn't hard. Getting them PASSED is! Vote out 535! Vote out politicians and vote in people with integrity who want solutions!
ReplyDeleteFunny that Boomers think a tax increase is moderate when they wont be paying for it. Why wasnt it done when they were making thier highest wages.
ReplyDeleteCUT THE PAY TO BOOMERS!
You didnt take care of it when you should have now pay the price for your lack of foresight.
10:37 AM. First of all, I am NOT a boomer. Nor a Sooner. However, 0.6 % is 60 cents for every $100 you make. So, for someone that makes $100,000 a year, that would mean $600 a year or about $11.54 a week. That's pretty modest. So, what's YOUR solution? Or, are you just a troll?
ReplyDeleteIn 1983, multiple changes were made to Social Security including increasing the retirement age. Boomers were young then, and so they have been paying, their whole lives. Reagan's 1983 fix was supposed to last 30 years, and it is now 36 years later. Time for some tweaks, that's all.
ReplyDelete10:14's first two suggestions are right on. I don't think the retirement age needs to be raised. I am a boomer and I thought age 66 would never get here! Social Security isn't enough to live on so I'm still working. If our minds weren't so poisoned against immigration, we would accept that young immigrants would come here and do some of the work we don't want to do, i.e. construction, nursing care, farm work, etc. and pay into the system. That would help it too.
ReplyDeleteTim you dont even have a job, easy to give away my money when you are not earning any yourself.
ReplyDeleteI made my proposal, cut Boomer benefits now.
8:48 AM. I don't have a job because I am disabled. But, I still have a vote and I use it. As for your money... Don't worry about it. As soon of enough of us over 50 die, I'm sure those Millennials will vote in socialism.
ReplyDeleteTim, the programs you want to be on are Socialism!!!!
ReplyDelete