General Discussion

dkf

(37,305 posts)

72. I don't think you understand the significance of the solvency of the SS fund.

Tue Jan 8, 2013, 01:14 PM

Jan 2013

By law SS gets paid with FICA payroll funds and is not paid with general funds. It can be paid with general funds if it is budgeted similar to how we funded the payroll tax holiday.

The day the funds are depleted, payments are estimated to decrease 75% because that is what the receipts will cover. Bringing it up to 100% will then become a general budget issue subject to annual squabbles over funding or may not be covered at all. Moreover the receipts are estimated to be able to cover less and less of promised payments over time.

Too many retirees compared to workers...either payroll taxes need to be increased or benefits cut.

Chained CPI and other efforts to contain SS outlays extends the period until the SS cliff is hit.

So the solvency of the SS fund is not necessarily the solvency of the US Govt. Of course if the US is insolvent then all bets are off.

Edit history

Please sign in to view edit histories.

Recommendations

0 members have recommended this reply (displayed in chronological order):

77 replies

= new reply since forum marked as read

Highlight:

Elementary Social Security. [View all] kentuck Jan 2013 OP

That's it, isn't it? That's why they hate it. LisaLynne Jan 2013 #1

Maybe you need to re-read a definition of insolvency. dkf Jan 2013 #2

The argument is that it is "no big deal" that younger workers won't collect in full. Romulox Jan 2013 #4

Well if a 25% cut is fine, then sure. dkf Jan 2013 #6

Bingo democrattotheend Jan 2013 #24

I don't see people saying they "don't care"... kentuck Jan 2013 #39

Which Democrats are advocating for even a small change in social security? dkf Jan 2013 #55

From some people, yes democrattotheend Jan 2013 #58

There will be plenty in the trust fund if we increase the amount of income subject to payroll taxes. JDPriestly Jan 2013 #54

Indeed... kentuck Jan 2013 #5

The fund would have whatever the FICA tax can generate. dkf Jan 2013 #8

It has never been a savings plan... kentuck Jan 2013 #11

It was created as an insurance plan that had hardly any paid beneficiaries at the time. dkf Jan 2013 #22

That may be true... kentuck Jan 2013 #25

They are supposed to put their money into the stock market or some other type of dkf Jan 2013 #31

This is an illusion... kentuck Jan 2013 #34

Again, you are kind of making the point why you might want to change it. dkf Jan 2013 #37

If you have ever been without food or shelter... kentuck Jan 2013 #41

If we want to talk about investment how's that $4 spent for the elderly and disabled for $1 for kids dkf Jan 2013 #47

What are you talking about? kentuck Jan 2013 #49

Our priorities are that the elderly and disabled are 4x as important as our kids as evidenced by our dkf Jan 2013 #56

Good idea on raising the cap. I oppose a chained CPI. JDPriestly Jan 2013 #63

dkf, many of the baby boomers have 401(K)s and other pension plans that invest in the JDPriestly Jan 2013 #60

It not only had fewer paid beneficiaries, it had fewer paying into it. JDPriestly Jan 2013 #59

Here is a more complete picture. dkf Jan 2013 #61

Major changes were made during the Eisenhower administration. JDPriestly Jan 2013 #69

What do you mean by equalizing the payout based on FICA contributions? democrattotheend Jan 2013 #27

That is how the program actually works. dkf Jan 2013 #33

Not sure I follow democrattotheend Jan 2013 #35

Yes you got it. dkf Jan 2013 #40

What level of benefit do you think you were promised, dkf? JDPriestly Jan 2013 #57

I don't think you understand the significance of the solvency of the SS fund. dkf Jan 2013 #72

You did not answer my question. JDPriestly Jan 2013 #73

You can check online for the estimate. But really SS isn't guaranteed. dkf Jan 2013 #75

Also, as I stated... kentuck Jan 2013 #7

You really want to argue a 25% cut is insignificant when people are devastated by 2% payroll taxes? dkf Jan 2013 #10

I did not say it was insignificant but... kentuck Jan 2013 #13

And it gets worse every year. dkf Jan 2013 #18

What promises made?? kentuck Jan 2013 #26

In writing based on the formulas used to calculate benefits. dkf Jan 2013 #44

How would they fund minimal living expenses for the elderly if they did not have the Social Security JDPriestly Jan 2013 #64

Who is proposing cutting it to 0%? democrattotheend Jan 2013 #36

Simpson Bowles proposed changing the bend points to make it more progressive. dkf Jan 2013 #45

"if Democrats didn't have a 'cold dead hands' approach." JDPriestly Jan 2013 #65

I'm talking about Democratic politicians. dkf Jan 2013 #70

When the economy improves as it will, more money will flow into the trust fund. JDPriestly Jan 2013 #74

Yikes. This is a BAD argument. "Only" a 25% cut for me is no large matter? Really? nt Romulox Jan 2013 #14

Would you prefer a 100% cut? kentuck Jan 2013 #19

As a millenial, that gives me little comfort democrattotheend Jan 2013 #32

I hope your mother lives to be 105. kentuck Jan 2013 #38

I think it would be cut 14% in 2036 if nothing is done democrattotheend Jan 2013 #42

"How did you go from 25 years to 60 years?" kentuck Jan 2013 #43

My mom is 55 now democrattotheend Jan 2013 #53

Don't worry. There is no crisis in Social Security. This is just Republican wishful thinking. JDPriestly Jan 2013 #66

Thanks for your comments, JDP.. kentuck Jan 2013 #67

That is not what the SS trustees say. former9thward Jan 2013 #76

Long-term, we need to raise the cap. JDPriestly Jan 2013 #77

So raise the cap and the trust fund balloons. JDPriestly Jan 2013 #52

It thought the extra funds were for the baby boomers Mojorabbit Jan 2013 #62

This message was self-deleted by its author truebluegreen Jan 2013 #71

Wages have been *stagnant* for over 30 years. People keep on talking about cases for SS that Romulox Jan 2013 #3

If you have 120 million people paying into the fund, instead of 130 million...? kentuck Jan 2013 #9

Right, but what we used to define as "full employment" may not be again achieved any time soon. Romulox Jan 2013 #12

Yes, we will need to adapt to new economic realities. kentuck Jan 2013 #16

You are very pessimistic. Just wait. Those of us who have lived a long time JDPriestly Jan 2013 #68

What do you think "broke" means? dkf Jan 2013 #15

If you were to be overcome by the outcome of your income...? kentuck Jan 2013 #17

And you have just made the argument for why Social Security needs to be changed. dkf Jan 2013 #20

It depends on your definition of "changed"... kentuck Jan 2013 #21

Anything with the word "change" is different from "leave it alone". dkf Jan 2013 #23

Many of us baby boomers are going to die off sooner than most peope think.. kentuck Jan 2013 #29

The only thing wrong with Social Security is that the Republicans didn't create it liberal N proud Jan 2013 #28

Well said! kentuck Jan 2013 #30

Well as long as you are not around when the trust funds deplete you may get your wish. dkf Jan 2013 #46

It's lasted for 75 years. kentuck Jan 2013 #48

Yep, that's part of the rethug plan. alberg Jan 2013 #50

You pay into the fund, I pay into the fund liberal N proud Jan 2013 #51