The Sneaky Way They Plan on Cutting Social Security Benefits

EPJ ^ | 7-8-2011

[blam]

The Sneaky Way They Plan on Cutting Social Security Benefits

July 8, 2011

Talk of changing the way the CPI is calculated is now part of on going talks on how to deal with the debt expansion. Reuters explains bluntly what is going on:

President Barack Obama and lawmakers are considering cutting Social Security and increasing revenue by changing the way the government measures inflation.

Four senior congressional aides said lawmakers are discussing using an alternative yardstick to gauge inflation, known as the “chained consumer price index,” to determine annual cost-of-living adjustments for millions of Americans. How much of an impact will the change in the method of calculating CPI have on Social Security?

It could result in cutting Social Security by $112 billion over 10 years, raising taxes by $60 billion and cutting pension and veterans’ disability payments by $24 billion, according to estimates by the nonpartisan Congressional Budget Office and the Joint Committee on Taxation.

According to Reuters:

Advocates say the change is needed because the government’s current measure of inflation overstates how quickly prices rise. Got that? In May, the annualized core CPI came in at 2.4% and the government debt negotiators think this is too high a number.

Senator Tom Coburn of Oklahoma goes one better, he says:

There hasn’t been any economist anywhere that says we shouldn’t do that, [change the way inflation is measured] Earth to Couburn, start with John Williams at Shadow Stats, if you are looking for some one who thinks the CPI measure has been manipulated downward enough already and read up on the last manipulation of the CPI, which was inspired by President Richard Nixon.

Coburn continues with this outrageous remark:

We need a CPI that truly reflects what’s happening in the economy, not what’s good for the politicians.

Bottom line: D.C. politicians are attempting every way possible to raise revenue and cut expenditures, even if it is on the back of the elderly. They will lie and say things with a straight face, even if a quick trip to the supermarket confirms the absurdity of the statements made by politicians like Coburn.

[Boston Blackie]

Remarkable statement .... Don't blame my generation for this problem. I had money confiscated from my pay for over 50 years under a plan that was instituted before I was born.

I dislike the situation more than you do because I WAS robbed .... Even if the system was sustainable I would not break even.

I have despised SS since my first paycheck.

[Texas Fossil]

People 55 and above need not worry.

I will be 64 in December. I am worried and angry. And I vote.

[Grammy]

"The notion that an employee's pay would have automatically been 6% higher absent the employer's SS contribution is quite a stretch."

Actually, people like me and Mr G, who are self employed, have been picking up the whole amount, so my income would have been 12% higher. And the amount is actually 15.6% now, for SS and medicare. 15.6% times 40 years would be quite a nice nest egg, thankyouverymuch.

[rabscuttle385]

I had money confiscated from my pay for over 50 years under a plan that was instituted before I was born.

Just because it was instituted before you were born doesn't negate the fact that you had far more chances than members of my generation to neuter and dismantle the program.

I have despised SS since my first paycheck.

Good, we do agree on something.

[KarlInOhio]

They haven't because of the way the CPI is calculated (no consideration for the increase in the cost of Food or Fuel)

No. If anything the inclusion of fuel and food are the cause of the 0% SS COLA in 2010 and 2011. The SS COLA is calculated from the average CPI (I think CPI-W specifically) in July, August and September. In 2008 that was when gasoline, natural gas and food prices were spiking and gasoline hit $4 for the first time. The CPI was very high in those three months compared to 2007 so the COLA in January 2009 was 5.8%. Soon after the summer of 2008 those prices dropped (with gas hitting $1.419 on Christmas day 2008 where I lived). The third quarter CPI dropped from 2008 to 2009 so the COLA was 0% (it would have been negative except they don't allow that). Then by 2010 the CPI had raised some, but it wasn't back up to 2008 levels. So once again no COLA. Right now the CPI-W is about 3% above the 2008 levels and going up fast.

If SS had used the fourth quarter rather than third quarter CPI then the COLA would have been about 1.5% each for 2009, 2010 and 2011 because the mid-2008 spike would have been missed.

[Wolfie]

Well said. The fact is, we wanted those things they funded by stealing from social security, and let it go on for decades.

[Atlas Sneezed]

How about cutting Social Security and medicare benefits... FOR ALL THE FRIGGING ILLEGAL ALIENS.

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And then for the 60-somethings who are perfectly capable of working, and can still look forward to an extended retirement. And for those who have saved enough that the payment is a pittance anyway (repay them with an accumulated estate tax credit).

This cutting can be decided after adopting a plan that ensures annual solvency by floating the retirement age. The impatient 60-somethings can lobby against the illegals, cheats, and wealthy retirees to see how many extra months of retirement they can win in Congress.

But SS must not drag down our nation with added borrowing, as it is doing now.

[achilles2000]

Here we go again.

There is no real “trust fund”;there never was a trust fund, nor was a trust fund ever intended; the “lockbox” never had a lock, nor was it meant to have a lock. Consequently, we never have, and are not, “paying into” anything, and we certainly aren’t making “contributions” (who could possibly repeat that with a straight face?).

All of this language has been used by the successors of FDR as rhetorical camouflage for programs that are intergenerational theft. They are immoral and unconstitutional, but we can no more expect to get our tax money back that has been squandered on SS, etc. than we can expect to get our money back that has been squandered in other immoral and unconstitutional programs.

I’ve probably paid withholding for as long or nearly as long as anyone here. The hard truth is that it is money down a rathole just like virtually everything else we pay in taxes. The “old age programs”, which have always been ponzi schemes, have always been heading for the cliff. People have been pointing that out since FDR’s day. The trouble is that people just didn’t want to listen.

Now the game of musical chairs is coming top an end, and we (older conservatives) are probably going to be among those left standing. The best thing to do is to stop stealing from the young. The fact that we were stolen from doesn’t justify our doing the same thing.

Most people who have been receiving SS, etc. for any length of time have received vastly more than they ever paid in withholding taxes because of demographics (that is part of the ponzi scheme element of the programs). That isn’t true for those approaching “retirement” age now.

From watching people on these threads, it is apparent that FDR succeeded in creating a raging sense of entitlement, even among some conservatives. He and his cronies knew that most people like getting government checks. This is why these programs have never been seriously challenged even though they are transparent frauds.

There is no point in endless postings about “solutions” that will keep these programs as they are. We can’t defy economic reality. Moreover, although we have been robbed by prior generations, we need to admit that these “programs” are stealing from our children and grandchildren.

[Starstruck]

Well now its your generation’s turn to dismantle the system. How are you doing with that?

[Atlas Sneezed]

You have two choices:

1. Accept less, perhaps even drastically less in Social Security and other government benefits.

2. Get nothing - either through hyperinflation, or through drastic financial duress.

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I’m waiting for a political leader to explain this.

It’s basically the golden goose theory. The beneficiaries are strangling the golden goose. Also known as the “tragedy of the commons” or “overfishing.”

[Atlas Sneezed]

I will be 64 in December. I am worried and angry. And I vote.

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If you knew that those younger workers whose earnings was funding your SS check would all be retiring at 70 to enjoy the same level of real benefits you’re getting, would you be willing to support a plan that had you retiring at 70?

[algernonpj]

The CPI per the BLS is “The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services”.

Originally the CPI was designed to measure the cost of a fixed basket of goods, i.e. comparing apple to apples. The rationale behind this was to use a set standard to accurately measure return on investment in relation to inflation, and to accurately measure the standard of living one can afford on a given income in relation to inflation.

The CPI is important because it is used by the Federal Reserve to justify its money printing policies, to set the interest rate on inflation-adjusted bonds known as TIPS, and by the federal government to calculate cost-of-living adjustments (COLA) for the entitlement programs (e.g., Social Security). The more inflation is understated, the higher the inflation-adjusted rate of GDP growth that gets reported. In addition, the CPI influences interest rates, the stock market, and a host of salary and pension negotiations each year.

In addition to separating out the cost of food and energy to create core inflation, there are several biases understating inflation that have been built into the CPI.

Through the introduction of hedonics, the substitution effect, quality adjustments, intervention analysis, and geometric weighting, which are soft metrics that are open to political manipulation and can be used to artificially lower inflation, the CPI has changed from measuring inflation in relation to a set standard of living to measuring inflation in relation to a declining standard of living.

There are far better ways to deal with entitlements! One example no freebies for anchor babies, illegal aliens, brand new immigrants. and their extended families. This drain alone has cost billions upon billions for many years.

An obscene amount is spent on these freebies. Per Fair, using the completely outdated number of 13 million illegals, they cost US tax payers a net total of $100 Billion per year; using the still conservative number of 30 million illegals, the net cost 1s $ 231 Billion per year. That $31 Billion is split into $ 66.99 Billion at the Federal level, and 195.5 at the state and local level. AND these figure do not include the costs of brand new immigrants on the dole!

How about we add no bailouts of TBTF financial institutions. Another is to fold all government employees into SS and have them to contribute to their health insurance and retirement. Then there is that alphabet soup of agencies tied to the executive branch. etc. etc. ... ...

A more realistic chart of inflation:

[meyer]

And then for the 60-somethings who are perfectly capable of working, and can still look forward to an extended retirement. And for those who have saved enough that the payment is a pittance anyway (repay them with an accumulated estate tax credit).

Izzat you, Lindsay?

Here's the deal - benefits should be paid out pro rata based on what was paid into the system by the individual and his/her employer over their working years. No more, no less. You redistributionists that think that because somebody took the care to save for old age shouldn't get a benefit but somehow, the deadbeat high school dropout democrat base that paid little into the system over the years should get a benefit are basically liberals.

The problem with SS, besides the fact that it shouldn't exist in the first place, is that the benefit isn't tightly based on the contribution. If you've accumulated 100,000 in contributions over your working years, then your benefit should reflect that amount based on actuary tables and your chosen retirement age. There is NO logical reason that someone that never paid into the system should get ANY benefit, including SSI and disability. There is also no logical reason that anybody that's paid in all their life should get screwed because they had the sense to save for their own future instead of squandering their income away over the years.

[italianquaker]

I just want what was taken from me

[jimt]

Bottom line: D.C. politicians are attempting every way possible to raise revenue and cut expenditures, even if it is on the back of the elderly.

This is unadulterated bullshit.

Eliminate the Department of Education. Cut the EPA's budget by 90%. Stop giving federal "grants" to pressure groups. Stop studying cow flatulence. Deport the f'n illegals. Stop paying for anchor babies. Ad nauseum.

There are thousands of areas that could and should be cut first. The pols are pulling their standard old trick of making sure any "cuts" are first made where it hurts the public the most.

Disgusting.

[DannyTN]

"There are far too many “other” areas which can be cut....S.S. is not the Gov.s money it’s the peoples money who paid into it. Let them cut all the fraud and waste first..."

That's what I think. It's this kind of stuff that caused the republicans to be thrown out of power last time after they tried to cut medicaid arbitrarily while going on a spending spree with everything else.

I don't think we need to cut S.S.. We need to cut the wasteful government programs. And we need to stop immigration and raise import tariffs until the unemployment rate goes down.

Full employment will solve a lot of problems.

[Texas Fossil]

Supporting? I don’t ever remember being given a choice.

The only path out of this mess is to DownSize DC!

Eliminate entire departments beginning with the U.S. Department of Education and it SWAT team with it. Gut the EPA, HS, HHS, EEOC and the rest of the unconstitutional alphabet soup agencies. Let the States take over whatever is worth keeping and let them decide what it is willing to fund, not DC.

Restore our freedoms and jail the criminals who did this to us.

Free men do not have to ask permission. Not to DC nor some Global Scam.

[algernonpj]

http://www.freerepublic.com/focus/news/2745493/posts?page=52#52

[Boston Blackie]

Just because it was instituted before you were born doesn't negate the fact that you had far more chances than members of my generation to neuter and dismantle the program.

I have missed 2 primary elections in my voting life.I voted FOR one person for president ,RR, and every other presidential election I voted AGAINST a candidate.

Sadly I have had to vote the same way for statewide offices. For you to blame me for social security is no different then Al Sharpton blaming me for slavery.

The dem's game plan is working ... Race warfare, class warfare, generational warfare etc, divide and conquer. Now lets see what Rino the republican party puts up against the avowed socialists in the next election.

[Atlas Sneezed]

The notion that an employee’s pay would have automatically been 6% higher absent the employer’s SS contribution is quite a stretch.

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Unless you understand common sense economics and believe that employers set wages in a free market.

Thanks for the leftist talking point.