Bernie Sanders Has An Amazingly Simple Idea To Fix Social Security For The Next 75 Years

[Playinghardball]

The 1% isn’t going to like this one


Found on the Facebook page of GOP : Greed. Oppression. Piety/MoveOn.org

[hedgehog]

1. IIRK, Obama made the same proposal during the 2008 campaign.

Then, the proposal was altered to allow a donut hole between $110,000 and $250,000 with contributions to be deducted on income over $250,000. The thinking was that some people making over $100,000 counted on the extra pay once they hit the ceiling.

[TheWraith]

14. There was also Obama's campaign pledge about taxes...

He said he wouldn't raise taxes on anyone making under $250,000 a year. So creating a "donut hole" and restarting contributions at above $250k covers that too.

[AnotherMcIntosh]

46. And, of course, he also pledged to end taxes for seniors making less than $50,000

plus a few other things.

[supraTruth]

96. BLOCKED BY CONS & U BLAME him?

U shouldN'T.

He needs VOTING help from the 99%, not just-out-of-work-people-trying-to-make-a-change.

[AnotherMcIntosh]

97. Right. It's all the fault of the obstructionist Republicans.

Even in the Senate, the Republicans obviously prevented Majority Leader Reid from calling for cloture votes under Senate Rule XXII.

Who knew that the Republicans could have so much power?

[Jakes Progress]

120. Of course their power is increased

by all of their friends who call themselves Democrats but vote for conservative policies. A D doesn't mean what it used to.

[robinlynne]

131. but who gave the blue dog Dems their power? Who let Lieberman remain on committees after he

left the party. Who did nothing to help the actual Dmocratic nominee against Lieberman?

(He is just one example of many.)

[Jakes Progress]

150. People who think a D means something anymore.

It doesn't.

Just because some calls themselves Democrat doesn't mean they are.

[annabanana]

129. Are you saying that the Repubs have NOT been abusing the filibuster?. . . n/t

[AnotherMcIntosh]

132. Do you believe that the Republicans prevented Reid from calling for cloture votes?

[hughee99]

2. If they have to pay in more, do you have to pay out more to them when they retire? n/t

[gratuitous]

8. Folks who pay in the maximum amount receive the maximum benefit

The advantage of not means testing social security benefits is that everyone participates, and everyone benefits to a greater or lesser degree. If wealthy folks were asked to pay in and were not paid benefits, social security would come to be perceived as some kind of "welfare" for indigent old people, and thus easier to whittle away.

This way, it's an earned benefit, not an entitlement, and even though wealthy people probably don't depend on that $1,000 a month the way non-wealthy people do, they get it anyway. I suppose if a wealthy person wanted to help social security remain solvent, they could simply decline their benefit and plow it back into the system to help fund it for people who need it more.

[hughee99]

45. So I guess what I'm wondering, is does the "maximum benefit" increase

to account for the fact that the maximum pay-in amount has increased?

[HiPointDem]

48. There's be no advantage in that. Thus pointless unless the intent is to turn SS into welfare &

turn the upper middle-class solidly against the program.

[hughee99]

66. Do you think that if you tell them SS is going to take more money

while they're working, but not pay them any more after they retire, they'd support it? Assuming you're defining upper middle class as those people who would be affected by raising the ceiling.

[HiPointDem]

67. I think it's a nice wedge issue for the free marketeers, and I think the majority of those who would

be affected would go for it. Especially after they're hit with a sudden more than doubling of their SS taxes.

[gratuitous]

64. A detail to be worked out, I suppose

But I'd be inclined to say no to an increase of the maximum benefit. The whole idea is to make the system more solvent than it presently is (which is a little silly, since it's fully funded for the next quarter century, a claim no other government program can make). We're just subjecting more income to social security withholding, ensuring a more equitable sharing of the cost of the most successful government program ever devised.

[HiPointDem]

65. Upper income workers already pay for the largest share of the program.

If total wage income = $100, and cap is at 90% of all wage income, and wage income is divided such that the bottom 33% gets 12%, the middle 33% gets 33%, and the top 33% gets 55%, that means:

Bottom pays 74 cents
Middle pays $2
Top pays $2.80 (with cap covering 90% of income in place).

Total collections = $5.54, with top 1/3 paying half.

Uncapped, top pays 3.41 = total collections of $6.15, with top 1/3 paying 55%.

The increase = a sudden doubling of their tax (as individuals), something very easy to see & get pissed about. And it's this segment of wage-earners that's the most politically active, has the most political pull, & is most likely to respond to the right-wing line about how high taxes are.

I believe in real life that the top 1/3 of wage earners actually make more than 55% of all income. They also pay income tax at a higher effective rate than the super-rich.

I think increasing their effective total tax rate more is a good way to destroy SS.

Solutions to non-existent problems always aimed at labor, never at capital.

[SoCalDem]

134. An elderly friend of mine called his SS..."Greens Fees"

He had a union pension, a military pension & so did his wife.. They both also had SS.. He said they were "making" almost 3 times what they did when they "worked"..

Their house & cars were paid off & they had zero debt.. They used their "extra money" to pay tuition for their grandkids & to travel.

[Major Nikon]

10. Yes, however...

The formula for calculating SS benefit pays less dollar for dollar the more you make. So higher income earners already pay more into the program for the benefit they receive.

[rfranklin]

13. And they might live to be 109 and beat the system...or you could die one month after you start...

It's a crap shoot!

[JDPriestly]

22. No. Keep the scale the same as it is today.

Most people who make over $111,000 per year save at least some of their discretionary money for retirement.

Social Security is the basis for retirement for everyone.

There is no need for the Social Security benefit to go up all that much as long as it keeps up with prices. The lower benefits need to be raised not the upper ones.

Some seniors receive only a few hundred dollars a month to live on from Social Security. That's really tough. It is not even enough for a subsistence life. They rely on things like food stamps and the meals at their local senior center.

Wealthy people do not need that kind of help.

But remember a person can be wealthy today and utterly impoverished tomorrow.

That's why we all need to protect the Social Security system. You may be riding high today, but who knows where you will be when you are 80?

[truedelphi]

30. And one other fact to consdier - which sector of the population

Is more likely to live to the age of 67 - the billionaire, with all the advantages that their ability to afford real health provides, or some low incomed person (which most Americans are these days.)

[AnotherMcIntosh]

50. Which sector is more likely to live to the age of 67? Those that return to Mexico, go to

Canada, or otherwise leave the country. They, or someone on their behalf, will cash SS checks way past the age of 67.

[HiPointDem]

52. Yes. Lower-income people get proportionally more if they live to collect, but they're more likely

not to than higher-income people -- and also to collect for a shorter period.

[Sirveri]

82. yes, however only 10 cents on the dollar. So it works out in the end.

[Scuba]

3. It would take five minutes if the Congress had any spine.

[rocktivity]

4. And if you delete the cap altogether

It could be solvent FOREVER. Plus, EVERYONE could pay a LOWER rate.


rocktivity

[supraTruth]

72. Yep.

[HiPointDem]

5. social security doesn't need that much fixing, berrnie. why do you want to give more money

to the feds so they can "borrow" it again?

[rustydog]

9. Alongwitht he fix, insert a provision making the use of the money raised solely for SS.

[Dokkie]

11. My thoughts exactly

I think 1st of all, we have to setup a mechanism that will prevent the govt from spending the SS surplus. Seeing as they have blown the $2.6+ trillion surplus and will have to double tax us again to refill it. I say we fix the leak 1st before pouring it more water

[TheWraith]

15. No. For crying out loud, do we have to go over this again?

The idea that the Social Security Trust Fund has been spent or "raided" or anything of the like is simply wrong.

[Dokkie]

19. wrong how?

What happened to the $2.6T collected? is it somewhere it can be drawn from or do we have to tax more for replenish the funds? or maybe just maybe the $2.6T was never there and the SS administration have been lying to us.

[JDPriestly]

23. The Secretary of the Treasury is responsible for it.

It is part of what we speak of as the national debt, and, yes, it has to be repaid.

The money was collected as FICA payments. It isn't really tax money. It was collected for a special fund.

Much of the money has been spent on military stuff. Cut back on the military and the Social Security funds will suddenly reappear.

Remember the pallets of cash in Iraq?

The military wastes incredible amounts of money. My husband likes to tell stories from his days in the military. They always did waste a lot of money.

[jeff47]

25. Wow are you wrong.

The money has not been "spent", any more than the money in your bank account has been "spent".

The money bought US government bonds. Those bonds have been paying interest and have been paid back to the Social Security administration as they mature. (And then used to buy more bonds)

Now that the Social Security administration is no longer buying bonds, we'll probably have to pay a slightly higher interest rate on newly-issued bonds. Currently, this is less than 2%. Not a problem.

But the money is not "spent", nor is there "double taxation". Nor a host of other RW talking points.

[truedelphi]

31. The idea that the money has been spent is not a RW idea.

Cynicism knows no party label.

My dad hammered on that topic, and he was a lil to the right of me.

My Teabagger neighbor thinks about the notion the funds are gone.
And so do many of my liberal and far to the left friends.

What helps us in our cynicism is the fact that the government officials themselves keep saying the money isn't there, that the Social Security checks come out of the General Fund, and not the Social Security Fund.

If you listen to my Congressman, Mike Thompson, (D) - he harps on this all the time. He brings the same phony baloney pie chart to the "meet and greet" local meetings, that Bill Maher uses. "Social Security very very bad - it comes out of the General Fund and is bankrupting our nation."

I have seen several devoted activists attend these meetings and try to tell him that his chart is wrong and that the Social Security monies are there. But he brushes aside these people, as he is a big important Congressman.

So maybe there is truth to that.

Gawd only knows, the government under two Administrations has allowed the Big Banks to take some Fifteen to Sixteen Trillions of dollars out of our pocket through Bernanke's satisfying his banking friends. (And when Grayson tried to find out where a mere 500 billion of this money went, Bernanke refused to say.)

So maybe they've raided Social Security too. We fight wars based on lies; we watch as our friends our foreclosed on, even though we know that 35 states banned foreclosures in the 1930's. So just why is it it impossible to believe that government officials would not steal Social Security funds away too?

[jeff47]

34. So the money in your bank account is gone then?

That money isn't actually in your bank at the moment. It's not sitting in their vault, electronic or physical.

Does that mean it's gone? No, you can withdraw it at any time.

Same with the Social Security trust fund. The only way it's "gone" is if the US Government decides to go bankrupt. And if that happens, the entire Social Security concept is moot anyway.

You, and anyone harping on this, are wrong. You, and anyone harping on this, is trying to convert Social Security into a 401k-like program. Even if you don't realize what you are doing.

[truedelphi]

137. People are speculating. We simply don't know.

Like I said, we have had under TWO ADMINISTRATIONS, the transfer of Sixteen trillions of dollars out of "our pocket" to Bernake's hand selected Too Big To Fail crowd.

We have had the government in its continual lies about the need for an invasive war on terrorism. Part of the lie worked in such an evil matter that even now, many people still believe that Iraq was somehow involved in the attacks on the pentagon and New York.

So excuse me if some of us are less than trusting about the workings of "our" government.

The Social Security money is legally mandated to be sitting in a fund, or to have that fund's monies be used to purchase government backed securities.

But please explain for me how it is that one entire wing of the Democratic party, "the blue dog" wing, that Hon. Mike Thompson so proudly proclaims is his moniker, can go around the USA and show that the Social Security monies come out of the General Fund.

Don't be mad at me - I have no power in this. My vote probably wasn't even counted in 2008.

Bill Maher has a lot more influence than I have. Thompson has a lot more influence than I have. So get on the phone to them! (Or to the Blue Dog Dem in your area.)

[jeff47]

138. Yes, we do know.

Bernake is in charge of the Federal Reserve. He has absolutely nothing to do with the Social Security trust fund, and no ability to transfer that money anywhere.

The Social Security trust fund can only be used to purchase one thing: special government bonds that are issued by the Treasury. Another entity which Bernake has no control over.

But this little conspiracy theory is great for the people who want to end Social Security. If Bernake's stolen all the money, you aren't going to raise a fuss when Ryan turns Social Security into a 401k.

But please explain for me how it is that one entire wing of the Democratic party, "the blue dog" wing, that Hon. Mike Thompson so proudly proclaims is his moniker, can go around the USA and show that the Social Security monies come out of the General Fund.

The concept of "lying" is new to you?

[truedelphi]

139. Wait a minute. Before I go on with this "debate"

I ask that you re-read every one of my posts in this topic on this matter.

Nowhere did I say that Bernanke was in charge of the Social Security monies.

I was instead, trying to portray a climate of the overall atmosphere of lies, deceit, treachery and what not that perturbs the thinking members of our population.

You seem to be willing to kill the messengers rather than to think about the climate that is created, and those at the top who are doing the creating.

None of the people I know of who have concerns are interested in creating the demise of Social Security.

Concern does not = willingness to kill a program.

Rather consider that when the Head of Treasury, one Tim Geithner, can refuse the governor of the state of California a requested loan of 20 billions of dollars, and tell that governor that to offer the loan would be to increase the deficit, (when in actuality it would keep people employed) one has to wonder. Yet Geithner never squawks about the fact that trillions of dollars were offered to his buddies at Goldman Sachs and AIG on account of Bernanke and his "digitalizing bank accounts" for the Too Big To Fail Crowd that "needed" Bailouts.

[jeff47]

141. So either you've decided to change your story, or you're not very good at making a point.

Ok, I'll quote you then:

Like I said, we have had under TWO ADMINISTRATIONS, the transfer of Sixteen trillions of dollars out of "our pocket" to Bernake's hand selected Too Big To Fail crowd.

We're talking about the Social Security trust fund. You are claiming Bernake gave trillions to cronies. Yet you aren't trying to claim the Social Security trust fund was stolen?

You now say Bernake has nothing to do with the trust fund. Well, then why'd you bring him up at all?

Here, let me continue our discussion about the Social Security trust fund:

Mars is the fourth planet from the Sun in the Solar System. Named after the Roman god of war, Mars, it is often described as the "Red Planet" as the iron oxide prevalent on its surface gives it a reddish appearance. Mars is a terrestrial planet with a thin atmosphere, having surface features reminiscent both of the impact craters of the Moon and the volcanoes, valleys, deserts, and polar ice caps of Earth.

I was instead, trying to portray a climate of the overall atmosphere of lies, deceit, treachery and what not that perturbs the thinking members of our population.

While claiming the Social Security trust fund has been stolen, or is otherwise "not there" or "can't be trusted". Thus propelling the propaganda of "the trust fund is broke" into liberal enclaves not reachable by Fox News.

Treasury, one Tim Geithner, can refuse the governor of the state of California a requested loan of 20 billions of dollars, and tell that governor that to offer the loan would be to increase the deficit, (when in actuality it would keep people employed) one has to wonder.

Because California's budget and the federal budget are exactly the same thing.

Oh wait...

[truedelphi]

151. You are intent on deliberately misportraying what I am saying.

Thank the Goddess for the "ignore" function!

life is just too damn short!

[JDPriestly]

152. I agree. I must have expressed myself very badly.

The money in the bonds is money borrowed. And the government uses the money in the bonds to fund its wars, etc.

But the money is there. It is just owed to Social Security as a bond-holder.

[zeemike]

49. The SS trust fund is in government bonds.

And those bonds must be paid in full...it is in the constitution.
If those bonds are no good then all the debt we have in bonds are no good.

[HiPointDem]

16. the problem isn't the government "spending" it -- the problem is collecting so much money over

& above what's needed to fund retirees in the first place.

[Dokkie]

20. Much money?

$2.6T sounds reasonable to me, doesnt seem to be much money when you are considering that the baby boomers are about to retire

[jeff47]

24. *facepalm*

After WWII, a large number of people were born. They were dubbed the "baby boom".

These "baby boomers" had much fewer children. Both subsequent generations are smaller than the baby boom generation. The baby boomers are also, shockingly enough, older than their children so they will retire before their children.

How, exactly, do you expect to pay Social Security to these baby boomers? You're either slashing benefits to baby boomers, or taxes have to go through the roof as each "Generation X" and "Generation Y" taxpayer has to support multiple "baby boomers". Or you build up a surplus before they retire and use that money to pay for it. Since "Generation X" and "Generation Y" and "Millennials" do not form an upside-down pyramid in terms of size, they will not suffer the same problem.

You can either collect a larger surplus that sits in a vault, or you can invest a smaller surplus in something that pays interest. However, such investment must be utterly rock-solid or you risk being unable to fund retirees. So they bought US bonds. The only way those would not be repaid is if the US government was going out of business, which means Social Security is moot.

What happens now that they have to "cash out"? Not much. The Social Security administration accepted slightly below-market interest rates, so we'll pay a touch more on our debt as bonds are sold to "real" investors instead of the Social Security administration. It does not require a "double taxation". Nor is the surplus "gone".

[HiPointDem]

32. gee, thanks for the history & finance lesson. not. The way you pay for it is with the increased

productivity & ergo higher wages of every generation.

Gen A has 10 members who produce $10 of value each = $100 & are taxed at 5% = $5.

Gen B has 20 members, $20 of value each = $400 x 5% = $20.

Gen C has 20 members, $30 of value each = $600 x .5% = $30.



Instead, what the Reagan admin did was increase SS taxes on all workers (not just boomers, but on Gen Xers, their parents, & every subsequent generation) to build up a surplus five times bigger than the 1-year cushion the TF historically kept.

Gen A = 10 members paying $5

Gen B = 20 members paying 6.2% = $25 ($5 of which = surplus)

Gen C = 20 paying $37 ($7 of which = surplus)

So $12, or about 11% of collections are borrowed into the general budget.

Interest is paid on the borrowing, increasing federal deficit and taking money away from other programs.

Meanwhile, consumer spending drops 1.2%, consumer borrowing increases to maintain the same living standard, and income taxes on capital are reduced.

Then it comes time to repay and the feds plead poverty: "OOOOh, we're so poor, we need to cut your benefits or raise your SS taxes to cover the difference!"

They reduce benefits or raise SS taxes & workers and retirees lose a second time.

Tell me where the bloody "benefit" in your little scheme is.

[jeff47]

40. Once again, you are completely wrong.

Social Security worked because the "over-65" people were vastly outnumbered by workers. And this continued right up until the baby boomers had fewer kids.

Now, the baby boom generation is too large and "Generation X" and "Generation Y" is too small for "increase productivity" to fund Social Security directly without benefit cuts or massive tax hikes. Enter the Greenspan Commission and the creation of the trust fund.

Then it comes time to repay and the feds plead poverty: "OOOOh, we're so poor, we need to cut your benefits or raise your SS taxes to cover the difference!"

No, that's what hacks like Paul Ryan are trying to claim so that they can actually steal the money. Claiming the trust fund doesn't exist is fantastic ammunition for them. I hope they sent you a thank-you card for laying all that groundwork.

Btw, the trust fund's still there. Right now, interest is covering the gap between tax receipts and payments.

Tell me where the bloody "benefit" in your little scheme is.

The fact that baby boomers can actually collect Social Security is considered by most people to be a benefit.

[HiPointDem]

42. Bullshit. BY 1965 ratio of workers to beneficiaries was already 4 to 1.

Repeating that canard about the "vast" numbers of workers supporting each retiree in the past without factoring in productivity *is* parroting the right-wing talking points.


What does productivity growth mean for the future of Social Security?

In order to get an accurate picture of who is contributing to Social Security and how much, first we must measure the right thing.

Social Security solvency is not just about the number of people contributing to the system, but about how much they are contributing. Because of productivity growth, workers today are more than twice as productive as they were a generation ago. So, 16 workers from 1955 are are much less efficient than 16 workers today, rendering any comparisons moot.

Social Security already weathered a much more dramatic change in the worker-to-retiree ratio when it went from 18-to-1 in 1950 to 4-to-1 in 1965 without collapsing. Compared to that change in just 15 years, the far less dramatic change from today’s 3-to-1 ratio to 2080s 2-to-1 ratio is less daunting. To understand why, we have to look at the bigger picture.

The Social Security Trustees conservatively project that productivity gains will slow to 1.6% per year by 2013 and beyond. Even that amount of growth generates 91% more output per hour by 2045, as shown in Figure 2. In other words, the total output of American workers (measured in gross domestic product, or GDP) will grow from $84,152 per worker today to $156,285 per worker (in today’s 2004 dollars) by 2045. Even when that growth is spread among 8% more people per worker, it would raise GDP per capita. Future workers will be so much more productive that they will be in a position to support Social Security and still be better off than today’s workers.

http://www.epi.org/publication/ib208/

[jeff47]

136. So you agree with me then?

Thanks!

Oh wait, you are going to bicker about "vast" not being "vast" enough. Despite 4-to-1 being quite ample to support retirees.

Btw....your productivity argument only works in theoretical-land today. Productivity gains are supposed to "trickle down" to workers. They should get paid more as their productivity increases. And that was the case up until about 1980. Since then productivity gains have not "trickled down" to workers. A worker in 1980 got the same inflation-adjusted pay as a worker today, despite the much higher productivity of a worker today.

The fact that productivity is higher today should mean workers have more money, and thus can support more Social Security recipients. But workers are not getting any more money. The "bonus" from productivity has been paid out only to top earners. With the cap on the Social Security tax, top earners are not paying more Social Security taxes.

Productivity gains can't solve the funding problem because "regular" workers aren't making any more money, and top earners are already well over the cap for the tax.

Our options were to tax the rich more, or build up a trust fund. Since the commission to solve this was appointed by Reagan and chaired by Greenspan, taxing the rich was not going to happen. So, trust fund.

[HiPointDem]

144. I disagree that the problem is the number of workers per retiree. That's a red herring.

I agree that if workers don't share in productivity gains, SS won't work.

I disagree that maintaining a bloated TF or changing the structure of the program so that all wage income is taxed is a solution.

Thirty years ago SS tax rates were raised above then-current needs in order to create a growing surplus, supposedly in order to prefund the baby boom's retirement, because they were such a large generation and their children's generation would be smaller.

The rhetoric then was that this "fix" would "save SS forever".

Now the boomers are starting to retire, and, far from being a secure source of retirement income, we are told the program is in "crisis," that it's going "bankrupt," that program cuts are needed, that adjustments in COLA and retirement ages are needed, that we must increase taxes on labor even more.

IOW, reducing our own consumption for 30 years in order to prefund SS didn't eliminate the problem. And it won't eliminate it if we do it again.

Because the real problem isn't the amount of money in the TF, it's the fact that capital is taking an increasing share of all income, and is using its power to rachet down labor's share even more and take away any security that labor as a class has.

Taxing all wage income increases political opposition to SS, increasing support for its destruction. The segment being hit is the segment whose total tax rate is already higher than that of the super-rich pushing this "solution" and already most attentive to demagoguing on "high taxes" and how they, the productive of society, support the unproductive masses. They already pay a majority of SS taxes; this proposal turns it into an overwhelming majority, destroying the basis for any claim that workers pay for their own benefits.

A bloated TF also 1) allows elites to tax workers today above today's needs and reduce benefits tomorrow, pocketing the difference, and provides further fodder to demagogue SS.

personally, i'd rather fight on my feet than be pushed into the dust bit by bit, as has been happening over the last 30 years.

I'd rather publicize how the program actually works and what's really going on than sign onto a phony "solution" approved by the very elites that are killing us bit by bit -- that just sets the stage for further bloodletting.

My personal preference.

[jeff47]

18. Math. You do not understand it. (nt)

[Dokkie]

21. what Math?

I am confused

[jeff47]

26. This part

Seeing as they have blown the $2.6+ trillion surplus and will have to double tax us again to refill it.

You could not be more wrong if you were getting your accounting information from RedState.

[Dokkie]

44. Since you seem to be very

knowledgeable about SS and govt finance, how does a govt(who has been running yearly deficits for decades) pay out the bond holders? There is no money in the bank, in fact the balance sheet is in the red, so do we borrow, ta double) or conjure up the money.

[Selatius]

99. The General Fund is running massive deficits, but the SS Trust Fund is a separate fund.

The two are considered separate funds legally speaking, and this was done by design under Franklin Roosevelt. He correctly assumed that if SS were entirely dependent upon the General Fund for support that it would fall under constant attack by the Republicans.

Also, the SS Trust Fund is funded through payroll taxes, while the General Fund is supported by the federal income tax on wages. So you have two distinct funds that are supported by different revenue mechanisms.

The only place you could link the two is in the area of bonds. Since the SS Trust Fund is comprised of a special series of non-marketable US Treasury bonds, the interest that has to be paid on those bonds comes out of the General Fund, but the interest the General Fund has to pay for those special series bonds is really miniscule compared to other large items in the General Fund, such as the Pentagon or the interest on the bonds that the General Fund itself (not Social Security) has taken out to support deficit spending. Now, those bonds that the General Fund takes out, those are the ones that you and I could buy on the market.

[jeff47]

135. There's multiple options

The Social Security trust fund won't be buying more general fund bonds. So that funding (for the general fund) will come from issuing bonds to other people. The Social Security trust fund will get it's money as the bonds mature, just like anyone else who buys bonds from the general fund.

There's a few other options, like simply printing money, or slashing benefits. But those all have big issues. Since we're selling bonds well below 2%, there's no reason to go for any other option.

You've done a great job absorbing the propaganda of "Social Security is broke".

[MerryBlooms]

6. Love the Bernie. Mercy, I wish we had a few hundred of his clones serving.

k&r

[Romulox]

7. Oh, they've got a ready-made answer to that one--it makes the program WELFARE if the rich have to

pay SS at the same rate as everyone else.

[HiPointDem]

17. "the rich" don't pay for social security. workers pay for it.

[Romulox]

27. The graphic in the OP refers to "billionaires". That's "rich" by anyone's standards.

Do you wish to take up the "it's WELFARE if we tax income above $110,000 without concurrently larger payouts" argument?

If not, I fail to see your point.

[HiPointDem]

35. SS taxes aren't paid on income from capital. Most (all) billionaires get theirs from capital income,

not wage income.

How many times do you have to hear it to process it?

[Romulox]

51. I understand that. This thread is about removing the cap SS withholding on incomes in excess of

$110,000. All of this would've been clear to you if you had glanced at the OP before responding.

"How many times do you have to hear it to process it?"

Are you responding to a particular point I have made? I never made any claims about "income from capital", so it's not clear what argument of mine you think you are refuting.

[HiPointDem]

55. So why are you talking about billionaires, and the op talking about "the 1%, as if those are the

people this proposal will hit?

Neither Gates nor Buffet, for example, would pay a dime more in SS if this were to pass.

[Romulox]

58. The word "billionaire" was BERNIE SANDER's. Will you PLEASE read the OP before attempting

to continue this "discussion"?

[HiPointDem]

62. Bernie knows better, which makes me wonder about his motivations as well. All these "solutions"

are based on the media-generated assumption that SS has a big problem that needs to be fixed immediately.

It doesn't. I question all "solutions" based on the erroneous assumption, especially ones that create false beliefs in the public's mind like "billionaires" will be taxed.

[joshcryer]

71. Most workers aren't in the top 5% which this proposal would fix.

[HiPointDem]

76. For the person who speaks of the "5%", in 2009 the 5% started at $154K, the 10% at $112K.

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

Top 10% takes 43% of all income, & assuming wage earning top 10%-ers take the equivalent % of wage income (probably not the case, but IRS doesn't break it down in an accessible way), that means this bracket pays 1/3 of all SS taxes.

[joshcryer]

147. So wait, you respond to yourself, to a post I made?

That's fucking rich, especially when you claim I'm on your ignore.

Who cares if the top bracket pays more SS? Frankly I think that the top brackets should pay a shitload more.

[AnotherMcIntosh]

54. Of course, it would be welfare if some of the funds were used to finance the bail-outs for the

super-rich.

[HiPointDem]

57. as they were the last time around.

[MindMover]

12. Betcha Alan didn't come up with that idea.....

[progress2k12nbynd]

28. I thought Social Security taxes were paid as a % of income

How in the world can an equal percentage from $110,000 and $1,000,000,000 be the same amount?? Something's wrong with that math.

[harun]

33. 110K is the cap.

Any dollar made over that, not one penny of it has to go to SS.

[HiPointDem]

37. No SS taxes are paid on *any* income from *capital*, under or over the cap. Millionaires &

billionaires don't make their money on their *wages*, they make their money on their *capital*.

[Romulox]

56. So what? That's a lousy argument against lifting the cap. nt

[HiPointDem]

59. It's a good argument against the pretense being made in this thread that raising the cap would hit

"billionaires" and the "1%", though.

Those people don't take their pay in wages.

[harun]

77. Good luck trying to teach people there is a difference between taxing wealth

and taxing income.

People are conditioned their whole lives to only consider income tax.

[HiPointDem]

78. capital income is income, not wealth.

[harun]

79. Didn't say it wasn't.

[HiPointDem]

81. not sure what your point is, then.

[Romulox]

89. That it won't fix the entire problem in one fell swoop is ALSO a lousy argument... nt

[HiPointDem]

92. who said anything about "not fixing the entire problem in one fell swoop"? i deny that there is

any such problem that necessitates ANYTHING being done now at all.

[AnotherMcIntosh]

60. SS taxes are NOT paid as a % of income. They are paid as a % of net earnings, up to a cap.

From the govenment's web site:

Net earnings for Social Security are your gross earnings from your trade or business, minus all of your allowable business deductions and depreciation. Some income doesn't count for Social Security. Don't include the following in figuring your net earnings:

•Dividends from shares of stock and interest on bonds, unless you receive them as a dealer in stocks and securities.

•Interest from loans, unless your business is lending money.

•Rentals from real estate, unless you are a real estate dealer or regularly provide services mostly for the convenience of the occupant.

•Income received from a limited partnership.

http://www.ssa.gov/retire2/netearns.htm

The offspring of the super-rich can receiving millions of dollars in income without ever paying Social Security taxes so long as the income that they receive does not qualify under the applicable definition as net earnings. All they have to do is never work for a living. They can do that.

[HiPointDem]

63. The "business" % of SS is considered part of employee compensation. It can be deducted from

the business's income taxes. Workers pay *all* SS taxes, they just don't see feel the "business's" half.

[WI_DEM]

29. This is just common sense and should be done.

[penndragon69]

36. Sorry, it makes too much sense.

So it will never happen.

[Dokkie]

41. Not necessarily

Does it mean there should be absolutely no caps? and will they receive an increased return proportional to their increased donations? cos you really don't want to turn SS into a welfare program for the right to bash. These are some of the kinks you have to work out 1st before going ahead with this.

[HiPointDem]

38. The 1% will love it, because it increases taxes on workers, creating another surplus which can

be borrowed into the general budget & fund another round of income tax cuts for them!

Capitalists don't pay SS taxes, workers do.

[Romulox]

53. LOL. I *knew* it. You are against lifting the cap, and are using all sorts of obfuscatory tactics

LOL at your concern for "workers" making more than $110,000. Poor dears!

[HiPointDem]

61. The cap is lifted every year. This proposal isn't about lifting the cap, it's about putting more

cash into the TF slush fund and incidentally turning SS into a more politically vulnerable program in which those who don't need the benefits finance the bulk of it.

You may or may not be sincere, but when you talk about "billionaires" as if they were the ones who'd be impacted, I wonder.

[Romulox]

90. Bernie Sanders mentioned "billionaires". Your continuing misdirections are failing to sway anyone...

What a ridiculous string of posts you've put together. Just off the wall.

[HiPointDem]

91. and you repeated it. name-calling doesn't help your misdirection.

[Romulox]

124. You can't unilaterally change the Original Topic by shear power of ridiculousness, though. nt

[Selatius]

100. The cap isn't lifted. It only adjusts for inflation and not one point higher than that.

When people speak of lifting the cap, they mean lifting the current nominal cap, which is roughly 110,000, to something higher, such as 150,000.

If you raised it to 150,000, most of us posting right here on this message board, including myself, would be long dead before the Social Security Trust Fund is depleted entirely.

[HiPointDem]

103. It's supposed to be set to cover 90% of total wages. In that sense, it justadjusts for inflation.

But as the increases can be smaller or larger than the inflation rate, in that sense, it doesn't.

In 2009, $112,000 was the cutoff for the top 10%.

The SS Trust Fund is SUPPOSED to be depleted, more or less. That was the Reagan rationale for overtaxing workers, so they could build up a nice big surplus to pay for the boomers' supposed "bulge".

Not to continue to maintain that huge surplus into infinity.

SS isn't supposed to come out of the trust fund, and historically didn't. It came out of workers' checks & was transferred to other workers.

[Selatius]

106. True, SS was a pay-as-you-go system prior to Reagan, but if the goal ...

is to return Social Security back to the pay-as-you-go system it once was, I was not aware of that, and I am not aware of a large movement on the left to turn SS back into that form.

The main emphasis has been and will continue to be preventing Republicans from completely sacking the trust fund before the Boomers die out. One way they've tried has been wanting to divert the payroll taxes from SS into private accounts, and that way the trust fund would surely deplete long before the Boomers died off.

[HiPointDem]

107. The purpose of the trust fund, as originally stated, was to build up a surplus for the "special

case" of the baby boom. The surplus created was to be drawn down as they retired.

It doesn't require a movement to turn it back, only for people to stop buying into the fraudulent crisis rhetoric and all the phony solutions to a non-existent problem put forth by the 1 percenters.

I don't know what you mean by "the republicans sacking the trust fund". The republicans want to sack the entire social security system, and giving them more surplus money to build the TF higher and higher = putting more money in for them to steal.

[Selatius]

108. Bush wanted to divert payroll taxes into private accounts in his failed attempt.

He wanted to divert half the payroll tax payments going to Social Security into private accounts, immediately. This would've made Social Security dip into the 2.5 trillion trust fund, immediately, making the surplus disappear about 20 years sooner than forecast. Then, with half the payments going into private accounts and no surplus left, benefits would have to be gutted.

[HiPointDem]

109. Now please explain how having a lot of t-bills in the TF will prevent future presidents from

proposing the same thing?

Having a huge surplus doesn't prevent privatization. It makes it jucier.

[Selatius]

112. But it defeats the Greenspan Commission goal of having a temporary surplus.

If the goal of Social Security after the Commission is to build up a surplus for the Baby Boomers, then what is the point if that surplus is squandered before they can even collect it?

This is a temporary goal we're speaking about, isn't it? Then after the Boomers die out the goal is to go back to pay-as-you-go like it once was, isn't that right?

[HiPointDem]

116. The greenspan commission no longer exists. It came into existence circa 1982 in order to

recommend that SS taxes be raised in order to create a growing surplus for 50 years, supposedly in order to prefund the boomers' retirement.

The surplus still exists. More than doubling the cap level will increase it.

I don't understand what you're talking about when you say "what is the point....collect it?"

I thought we were talking about the wisdom of raising the cap to $250K.

[Selatius]

118. At this point, I honestly think we're talking past each other.

Neither of us want Social Security to be demolished, but you seem to want a form of Social Security that hasn't existed since before 1983.

If that is the case, we're aiming for two different forms of Social Security. Your objection seems to stem from the fact that you fear the Social Security Trust Fund will, in effect, make Social Security that much more enticing for Republicans to attack.

Am I getting that part right?

[HiPointDem]

119. You want workers to continue being taxed more than the cost of providing social security, in

order that the surplus can be used to fund the general budget - & incidentally, fund income tax cuts for millionaires + force workers to, in effect, pay higher rates of income tax, thus reducing the remaining progressivity in the income tax?

What is your objection to returning to the original & quite solid design of the SS program?

The surplus is a slush fund for all kinds of duplicity. Forcing the PO to overfund their health care is how they're destroying the PO, forcing private sector workers to overfund pensions is how they set them up to be stolen, and its the same story here.

Overfunding ss is pointless and makes no actuarial sense. The trust fund doesn't pay for anything. Payments to retirees are always made out of current production, not past production. It's impossible for it to be otherwise. The rest is smoke and mirrors.

You didn't answer *my* question. How does taxing workers and putting it into the TF in order to be borrowed into the general budget *prevent* things like private accounts?

When you answer my question i'll answer yours.

[Selatius]

121. Well, when you put it that way, I have no objection to going back to pay-as-you-go.

But my understanding of SS as it currently is, is that it can't be co-mingled into the General Fund by law.

When SS payroll taxes takes in more than is spent on current beneficiaries, I am of the understanding that the sum is used to buy special series Treasury bonds that are non-marketable and can only be held by SS and redeemed at the Treasury.

The bonds pay interest until maturity, and the payment of that interest comes from the General Fund, so it does indirectly impact deficits and surpluses the General Fund may have at the time.

When SS goes and redeems those Treasury bonds, the Treasury will hand SS cash in exchange for the matured bonds, and the cash goes to retirees.

I was of the understanding that under the original Social Security Act, funds meant for Social Security can't be used for the General Fund, and I was of the understanding that this remained true even after the recommendations made by the Greenspan Commission were enacted into law.

However, if that is all incorrect, then what you are saying is that every time SS payroll taxes collects more than is spent out, the sum isn't used to buy Treasury bonds but instead used to fund whatever program in the General Fund that Congress wishes, is that right?

[HiPointDem]

122. OK, i see why we're talking past each other. No, by law when surplus SS taxes are collected,

they have to be borrowed into the general fund in exchange for US Treasuries.

Another way to put it would be to say "invested in US treasuries". same thing.

It's been that way since day one. Nothing has changed. That was the original design of the program.

Buying US treasuries = putting money into the general budget.

[Romulox]

127. I've been arguing finance with someone who uses "borrow" and "lent" interchangeably???

"they have to be borrowed into the general fund..."

[HiPointDem]

140. yes, you linguistic prodigy, you.

http://www.google.com/#q=%22borrowed%20into%22&nfpr=1&ei=F9THT6WpCc_ygge5-uTuDQ&sqi=2&start=0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=7f809d5d5a7ddd9a&biw=1015&bih=498

[Romulox]

143. It's not that "borrowed" isn't a word--it's that it's not a synonym for "lent".

[HiPointDem]

145. the phrase googled was "borrowed into." You're the semantic whiz, I'm sure you'll figure out

the difference between a verb standing alone and a verb-preposition combination at some point.

[Romulox]

146. It's idiomatic English, at best. Cringeworthy, at worst. nt

[HiPointDem]

149. The fact that you're not familiar with it doesn't make it idiomatic.

loan words borrowed into english include "teepee" and "sukiyaki".

money is borrowed into existence.

The money was borrowed into the general fund and spent by our legislators like drunken sailors.


it just means you're not as much of a grammar expert as you might think.

[Romulox]

125. She doesn't WANT the cap lifted. She is very "concerned" for workers making more than $110,000. nt

[joshcryer]

69. Yep. Defending the top 5%. Really the top 1.5%. It's crazy, to be sure.

[Romulox]

126. "Big tent".

[DLevine]

39. K&R. n/t

[closeupready]

43. Silly man. The path to insolvency is PRECISELY the agenda.

Just kidding; love Sanders, and I'm sure he understands this better than I do.

Glad to see him continuing to speak truth to power. K&R.

[TBF]

47. Bernie has a lot of good ideas -

but he's a "socialist"

[obxhead]

68. We don't need to raise the cap on SS taxes.

It needs to be eliminated completely.

Make $3 billion a year? Good, you can pay SS taxes on every fucking penny of it.

[HiPointDem]

70. someone making $3 billion isn't getting it from wage income. ergo, they don't pay SS taxes on it.

[Selatius]

101. True, but a chunk of it is likely in the form of a salary.

If that billionaire had an office salary of 20,000,000, then the discussion would revolve around whether all of that 20,000,000 would be subject to taxation, or just the first 110,000.

To be frank, I would only favor a cap increase to about 150,000. I'll even break for 200,000 but not much higher. The point of the cap goes back to FDR himself. He reasoned that if there was no cap on Social Security, then it would look awfully funny to working class people for Social Security to cut monthly checks in the tens of thousands or even larger to millionaires in retirement when the point of Social Security was to guarantee security in old age to working class people and the working poor, the ones who are in real danger of dying in old age from hunger and homelessness.

By that point alone, those millionaires don't need to be getting checks of that caliber because Social Security would simply be redundant to them.

[HiPointDem]

102. Show me anyone who gets $20 million in salary. If you look into those big numbers publicized in

the media, the bulk is generally stock options & similar things.

Not wages.

[Selatius]

105. Not necessarily true.

20,000,000 was a figure I threw out.

A real bona fide example, one from the big banks:

Lloyd Blankfein, the CEO and Chairman of the Board of Goldman Sachs. In 2006, his total compensation for the year was 54,400,000. Of that, 27,300,000 was pure cash. The rest was in the form of stock options and stocks. The following year, he made 53,900,000, of which 600,000 being his base salary, cash bonus of 26,900,000, stocks granted worth 15,500,000, and stock options granted worth 10,400,000.

http://en.wikipedia.org/wiki/Lloyd_Blankfein

[HiPointDem]

110. OK, let's say blankfein is the exception that proves the rule, since i'm too lazy to research the

ins and outs of his compensation.

If he & the corp had to pay 15.3 in fica on it, plus regular income taxes, do you think they'd structure his bonus package the same way?

his regular wage income was $600K.

rich people have the advantage of being able to structure their income sources in the most tax-advantageous way possible. imo, if blankfein took that big of a cash bonus, there was a tax advantage of some kind in doing it that way.

[Selatius]

113. As far as the reasons for Blankfein taking the cash bonus, that's speculative and beyond the scope.

The fact of the matter is you asked for one example in the original query.

[HiPointDem]

114. of course it's speculation, i said as much. thanks for the one example. but you didn't answer

my question about whether blankfein would restructure his compensation if he & his corp had to send 15.3 of it to SS right off the bat.

[Selatius]

115. That's still speculative.

Who knows the answer to that one? Because nobody in Blankfein's position prepares their taxes as if there is no FICA cap on earned income.

Also, I believed I prefaced my original remarks by stating that I never entertained the idea of totally removing the cap, merely bumping it up to 150,000. I don't know why I would have to answer somebody else's hypothetical.

[HiPointDem]

117. i think we all know that people in blankfein's position prepare their taxes with the goal of paying

the least amount possible.

why $150? why not $250 or uncap the entire thing?

what's the justification for $150? how much revenue would it raise & why do you want to do it now?

[Romulox]

128. Yet another LOUSY *excuse* not to apply the same SS withholding on *all wages*.

You don't want any trust fund amassed, as you outline above.

Quit with the phoney-baloney excuses--there is no fairness or logical argument to protect high wage earners from Social Security withholding equal to everyone else.

[supraTruth]

73. Let the media & politicians know that WE know.

http://www.democraticunderground.com/1002742525

Twitter TODAY (& tomorrow & the next day...etc.):

#CongressToDoList

#WHChat

@PressSec

@CBSTweet

@CBSNews

@ABC

@johnboehner

@SenBillNelson

@alfranken

@CNBC

@ChrisVanHollen

@RepBecerra

@Clyburn

@NancyPelosi

@SenatorReid

@USProgressives

@repdavidscott

@RepBarbaraLee

@billmaher

@CourtReagan

@LizClaman

@MelissaAFrancis

@beckyquickcnbc

@TheJuanWilliams

@larry_kudlow

@FBNStossel

@marthamaccallum

@davidaxelrod

@trish_regan

@DianeSawyer

@mitchellreports

@whitehouse

@Eugene_Robinson

@edshow

@BarackObama

@ariannahuff

@maddow

@Lawrence

add your own list

[HiPointDem]

74. what do we know?

[supraTruth]

95. WE KNOW:

http://www.democraticunderground.com/1002742525

[roamer65]

75. Here's a proposal that the 1 pct REALLY won't like.

Make the first $40K of income completely tax free. All taxes should not kick in until after $40K.

Increase the tax rates on those who make $1 million or more to 50%, no deductions.

[WHEN CRABS ROAR]

80. It would be a far better fix than relying on the stock market.

Another plus would be everyone putting in the same percent. that would make it fair regardless of income.

[abelenkpe]

83. I'm cool with that

Don't mind paying more.

[WinniSkipper]

84. Will never pass

A lot of the people he is talking about hitting are self employed (consultants, etc) who already pay 2x as employee/owner

[cstanleytech]

86. The real question is would this actually work? nt

[Nye Bevan]

87. Raising the tax cap without raising the benefits cap would be the quickest way to end SS

as we know it. The reason SS has survived so long in its present form is that everyone contributes to the program, and everyone receives from the program, and what you receive is tied to what you contribute. As soon as there are people contributing many times more than others but not receiving more benefits, SS will start to be perceived as just another welfare program. And we know what tends to happen to welfare programs.

[CK_John]

88. Bernie means nothing without a party. He just another decision challenged

independent.

[unkachuck]

93. K&R....sounds like a plan to me, thanks Bernie....n/t

[pansypoo53219]

94. DUH! i have been saying this for years. I ALSO BLAME THIS ON GREENSPAN.

kill the cap + lower the % on all.

[progressoid]

98. This idea has been around for a long time.

It needs to gain traction.

[AnotherMcIntosh]

104. Why not increase Social Security taxes by increasing the cap? Ronald Reagan did that (and more).

1. Reagan was a serial tax raiser. ... As president, Reagan “raised taxes in seven of his eight years in office,” including four times in just two years. As former GOP Senator Alan Simpson, who called Reagan “a dear friend,” told NPR, “Ronald Reagan raised taxes 11 times in his administration — I was there.” “Reagan was never afraid to raise taxes,” said historian Douglas Brinkley, who edited Reagan’s memoir. Reagan the anti-tax zealot is “false mythology,” Brinkley said.
http://thinkprogress.org/politics/2011/02/05/142288/reagan-centennial/

[krispos42]

111. Remove the cap and lower the percentage

The wealthy have chosen to no longer fund pensions or 401(k) for the workers that make them rich, so they have to pay this way instead.

[The Wizard]

123. The wealthy elites

have enough spare cash to bribe enough of the Congress to ensure they never pay their fair share. There should be cap on campaign spending and an outright ban on third party advocates from buying political ads and the subsequent favors attached thereto.

[RC]

130. Why is not anyone looking at getting our Living-Wage-Jobs back into this country?

With the loss of our Living-Wage-Jobs, the amount of money that Social Security has gone down enough to give credence to the fact that Social Security is in trouble.
Add to that, that these same people will draw Social Security on a formula based on their highest salary and yes, Social Security will implode somewhere down the line.

The fix for almost every single one of our economic problems is to get our Living-Wage-Jobs back into this country, Re-regulate business back to pre 1980 somewhere, and rebuild our crumbling infrastructure. The middle Class is what drives the economy. Without a strong Middle Class, as we had up till bu$h put in place the agenda to have it chopped it off at the knees, there can be no recovery worth the name. Anything else is just diddling with the symptoms. Heaven knows, we are great for that, because people get rich at it - at our expense.

[AnotherMcIntosh]

133. Why? Because they are now working on another wage-lowering, anti-union, "free trade" agreement.

The Senators and Representatives cannot get access to the details, although over 400 lobbyists (the "A-team lobbyists) can and have.

Neither Obama nor Rmoney have said that they will oppose this. The MSM is not giving signifigant coverage to it. No nationally known politician has publicly made it known that they will oppose it, if they will.

Some are calling the proposed "free-trade" agreement as NAFTA on steriods.

When today's economic condition is compared to what they will be like after this so-called free-trade agreement is signed, these may be the good-old days.

[HiPointDem]

142. Why aren't you publicizing that, then, instead of drumming up support for more taxation on labor

in order to build up a bigger TF surplus that can be stolen in the next round and sets the stage for the absolute destruction of the program?

What you're basically saying is: This is all we can do, they won't let us do anything else.

The reason this "solution" is being promoted is that it provides a means for capital to covertly steal more from labor.

It doesn't save SS at all.

[a kennedy]

148. kicking this baby.....

Love Bernie....