The Senate Budget Committee held a hearing yesterday on Social Security: A Discussion on the Facts and the Path Forward. It doesn’t look as if there is anything interesting coming out of this.
It’s not this Committee or the witnesses at the hearing but I’m always surprised at the number of policymakers and commentators who think that Social Security’s long term, perhaps now medium term, funding problems are some riddle that can be solved by some brilliant person with no one feeling pain. The reality is that you can cut benefits significantly or you can raise taxes significantly or some combination of the two. Even then Treasury will probably need to lend money to the Social Security trust funds for at least a few years. At this point Republicans want benefit cuts but want to find a way to make Democrats politically responsible for the cuts while Democrats want higher taxes but are worried about the backlash. Few, if any, are interested in compromise. I predict no benefit cuts nor tax increases; just Treasury funding for well into the future.
If the lowest paid beneficiaries (those who's benefits are below or at $1000/month) were to have their benefits cut by any percentage, we're gonna see an overwhelming amount of homeless disabled/retired people, especially when inflation by 2034 will have certainly risen, and the COLA seems to be a joke most of the time. The economy will have to shift for 21% deductions to even be livable for some. People will be suffering a lack of financial stability that will lead to all kinds of problems, not just housing. Those with serious mental health issues are certainly not going to stay at a baseline level. The ramifications for benefit cuts in those situations would be devastating. The economy in whole will suffer as well. Disabled/Retired people account for a lot of economic stability, when that is disrupted, the economy will certainly suffer the consequences as well. This affects every citizen, not just the disabled and retired. Apparently, it will take a full volume blow-horn in the faces of every individual elected official to explain the FULL devastating effects of this happening.
ReplyDeleteIt’s nice to be living in Fantasy Island. We are currently in debt at a tune of 39 trillion and going up. The reality is automatic across the board cuts are coming in 2032 or earlier of 24%. AI is only making matters worse and that’s our new reality.
ReplyDeleteIt's time the rich folk to kick in some of that "income" they get, based on what they are worth, not based on earned income as few have income as a lower class would know it, most borrow and live off that as it is not taxable that way.
DeleteHow can this Congress figure out the funding crises at SSA when TSA workers are not being paid? .
ReplyDeleteRaise the cap gradually until you get rid of it all together. The declining birth rate is making this an ongoing and growing problem. It was not helped by legitimating WEP/GPO.
ReplyDeleteWhere once just eliminating the cap with a concurrent cap on payments based on the original cap would have been enough. Not anymore. Republicans want to raise the retirement age. That, itself, is the same 24% cut. But, also not enough.
ReplyDeleteWhat everyone who seriously considers the issue knows is that it will take a combination of these two approaches. Nothing else now generates the funds needed.
Increasing the retirement age could be done with little harm if it was done over 36 years, one month for each year, combined with changes in the bend points, possibly doubling the first bend point, would probably work.
But, either way, it will take courage on both sides to get this done. Courage is sadly in very limited supply.
It only requires any of these undesirable approaches if you lack the imagination necessary to think up an alternative, which I guess the entirety of America does.
DeleteTo 3:27. OK, tell us one of those alternatives that you can imagine.
DeleteBoomers kicked the can on this for decades and decades. 50 years ago this would have been solved with a minor tax increase, 1-1.5%. Nope didnt happen. Cut the Boomer payments, time to pay the piper!!!
ReplyDeleteAnother rant from someone who thinks the problem is simple, and wants to blame one group.
DeleteNewsflash, it's not simple, and the solution needs to be complex.
Raise the cap to 500000 K over the next 3 years
ReplyDeleteWill AI robots be subject to a FICA tax? If not we are in big trouble!
ReplyDeleteExactly! All these “solutions” are useless.
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