How Congress 'Extends the Life' of Social Security

American Thinker ^ | 05/08/2019 | Jon Hall

[SeekAndFind]

On April 22, the trustees for Social Security issued their annual reports, and the situation for the huge transfer program is unsustainable, the same as it’s been for years. The government tells us yet again that the program is running out of money. The danger here is that Americans have been hearing these dire predictions for so long now that they’ll no longer take them seriously.

April 23 on Fox News’ Special Report, Bret Baier reported on the trustees’ reports and discussed them with his panel. Panelist Charles Hurt opined that the financial difficulties of the big transfer programs are a “slow-rolling catastrophe,” and added this: “The fact remains that they're going insolvent.” If Social Security were a private sector enterprise, it’d long ago have been declared insolvent.

Although no link was provided, Baier surely got his information from the Social Security Administration’s A Summary of the 2019 Annual Reports or from Treasury’s April 22 press release, both of which say: “Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for the first time since 1982, and to remain higher throughout the projection period.” What we should note here is the parenthetical “including interest.”

What the quote is referring to is OASDI, i.e. the combined trust fund operations of both Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI). But the program for old timers (OASI) is already under water in that income from its dedicated tax, the payroll tax, isn’t enough to pay benefits.

To confirm that refer to Table II.B1. -- Summary of 2018 Trust Fund Financial Operations

[babble-on]

either collect more taxes or pay less benefits.

That’s the only two ways, other than combining the two.

[SeekAndFind]

B. TRUST FUND FINANCIAL OPERATIONS IN 2018

Table II.B1 shows the income, cost, and asset reserves for the OASI, the DI, and the combined OASI and DI Trust Funds in calendar year 2018.

Table II.B1.—Summary of 2018 Trust Fund Financial Operations

[In billions]

		OASI	DI	OASDI
Asset reserves at the end of 2017		$2,820.3	$71.5	$2,891.8
Total income in 2018		831.0	172.3	1,003.4
	Net payroll tax contributions	715.9	169.2	885.1
	Interest	80.7	2.6	83.3
	Taxation of benefits	34.5	.5	35.0
	Reimbursement from General Fund of the Treasury	a	a	a
Total cost in 2018		853.5	146.8	1,000.2
	Benefit payments	844.9	143.7	988.6
	Administrative expenses	3.8	2.9	6.7
	Railroad Retirement financial interchange	4.8	.2	4.9
Net increase in asset reserves in 2018		-22.4	25.6	3.1
Asset reserves at the end of 2018		2,797.9	97.1	2,894.9

[ealgeone]

STOP PAYING FOLKS WHO HAVEN'T HAD THEIR PAY TAKEN FROM THEM!!

NO BENEFITS TO ILLEGALS.

[SeekAndFind]

Table II.B2.—Payroll Tax Contribution Rates for 2018

[In percent]

	OASI	DI	OASDI
Payroll tax contribution rate for employees	5.015	1.185	6.20
Payroll tax contribution rate for employers	5.015	1.185	6.20
Payroll tax contribution rate for self-employed persons	10.030	2.370	12.40

[Buckeye McFrog]

Ultimately two things will be done.

1) The cap on FICA taxes will be lifted and that tax will be paid on every penny of income.

2) A Tobin tax on Wall Street transactions will be imposed and that money put into SS.

Both will be wildly popular with most of the population.
Sorry to break that to you, guys.

[SeekAndFind]

RE: STOP PAYING FOLKS WHO HAVEN’T HAD THEIR PAY TAKEN FROM THEM!! NO BENEFITS TO ILLEGALS.

How about this -— STOP CONGRESS FROM RAIDING THE SOCIAL SECURITY TRUST FUND AND PUTTING IN WORHTLESS IOU’s TO FUND CURRENT EXPENSES.

[ealgeone]

+1

[babble-on]

Even popping the cap will only help some, because they will have to increase those benefits to higher earners as well.

The FICA tax is flat, but the benefits are very progressive. Lower income people get a much better return on their FICA “contributions” than higher income people do.

[OIFVeteran]

Your both misinformed. Illegals cannot draw social security. The only people that can draw SS benefits without paying into it are; spouses, widows, children under 18 or who have not graduated high school who are survivors of a person that paid into the system.

Social security has never been raided. The law was written, from the beginning, stating all excess funds were to be placed in the general fund and a special interest bearing bond was then given to the social security trust fund.

I thought the same things you guys did but then had a buddy I served with got a job at social security and told me I was wrong about those two things(and others). Like you guys probably don’t believe me I didn’t believe him. So I researched it myself and he was right. I think as conservatives we should have the correct facts when we discuss the issue so I encourage you to research it yourself. I recommend reading the original social security act of 1935. You can find it online.

[antidemoncrat]

Here is how to make it last forever. Take all government workers off their cushy retirement pensions and put them all under social security.

[rhombus10]

If what you write is true (and I have no reason to doubt you), then the struggling system is in even more trouble than I thought. This is not reassuring.

[1Old Pro]

either collect more taxes or pay less benefits. That’s the only two ways, other than combining the two.

The third way is also the solution, begin privatizing, allow individuals to invest their portion in a variety of diversified investments including a fixed account.

[FLT-bird]

The easiest solution would be to push the retirement age from 67 to 70. Which makes sense given that when it started, life expectancy was only about 65 which was the retirement age. Medical advances have opened up a big gap that was only partially closed by raising the retirement age to 67. Also, lots of people are in much better health for longer than they used to be and a lot fewer jobs now involve backbreaking manual labor.

[central_va]

The easiest solution would be to push the retirement age from 67 to 70.

Bite your tongue. Screw that. I look at SS as a tax break and nothing more. Why should 65+ be paying taxes?

[OIFVeteran]

There’s currently a maximum benefit amount so they could just raise that some. I saw one proposal that advocated getting rid of the limit, making a minimum insured amount of $1500 (currently the average SS payment is around $1200) and a max amount of double that.

I didn’t check their numbers but they claimed that they did and this would make SS solvent over the course of the baby boomers retirement. It supposedly would also eventually lower the deficit.

I like this plan for several reasons. First when social security was originally passed it was suppose to be one leg of a three legged stool. The other two legs were your own retirement and your companies retirement plan. Well most companies no longer have a retirement plan (I consider 401ks as your own savings for retirement). So an increase in the amount of SS makes up for this somewhat.

Before I get flamed about not being a conservative, I look at social security like our military or roads. We all pay for it and we all receive the benefit to one degree or another. Now I believe social security should have been created by passing a constitutional amendment, not slipped in as a tax, but it is what it is.

As far as claims of soaking the rich, well yes it does. But considering most of the rich are flaming liberals let them put their money where their mouth is and help out the middle and poor classes. Them and the country club Republicans that seem to be as socially liberal as them.

[central_va]

When is welfare and EBT going to run out of money?

[SeekAndFind]

RE: Take all government workers off their cushy retirement pensions and put them all under social security.

Question: Do these government workers on pensions STILL receive social security?

[1Old Pro]

The solution is privatization. As usual government screwed up this government program.

[OIFVeteran]

I did a lot of research on this. Found out I was badly misinformed. Very humbling. It also turned me into a supporter of Social Security. I think it is a great program that has kept a lot of Americans out of poverty and allows people to retire and age with dignity, instead of having to rely on charity from their family or strangers.