As I stated before, they will employ the same strategy they did in 1983 when SS went into the red. I see a slight rise in the retirement age, some slight changes in the computation of benefits as suggested by Fred Thompson, and some tinkering with the COLA formula and taxation rates for those at the higher end of the economic ladder. The Dems will not do anything that hurts those at the bottom of the ladder in terms of taxation. SS is actually much easier to solve than Medicare, at least for the short term. The Dems will kick the can down the road rather than make the hard decisions.
It will only seem “fair” to the libs to “means test” Social Security with a higher tax on benefits. They have done it TWICE before. Why do you think it impossible to do this, now, with the most liberal government we have ever had?
With only one third of the 50 million Americans receiving benefits now paying taxes on them, the Dems can make some slight changes, but they are never going to tax all of the benefits. It would be polticial suicide. And remember, starting next year, one milliion Americans a year will be added to the SS rolls.
I am far more worried about Medicare/Medicaid. The Train Wreck Ahead Medicare is rolling toward disaster, and there is no easy way to fix it.
Why only make the upper income a little upset with you? Why not “go for gold” and make ALL of the SS benefit taxable?
(Notice, I do not advocate for this solution, but it does seem the easiest, most efficient way to “means test” a program that can not continue to pay out the same benefits.)
Look at it this way, which is more likely:
1.) an actual cut in SS benefit amounts?
or
2.) Simply taxing the SS benefit?
Obviously, it is much easier to simply TAX the benefit.
As it stands today, even “tax free” municipal bond interest is added into the formula for considering the taxation level of SS benefits.
Also, the lower income folks pay NO TAXES now. It would be fairly easy to simply treat SS benefits as income, without even impacting the “poor” -— if nothing else, the “floor” for “free” SS benefits could remain the same, or rise slightly.
Another point which the libs don't like to address:
The “earned income credit” was first devised as a way to reimburse the working poor for their “payroll taxes” -— which is really awful, in practice:
The “poor” might pay virtually NOTHING into SS, yet they are often likely to receive all of their benefits tax free!