Maybe It's Time To Cut The Federal Government In Half

Forbes ^ | May 9, 2019 | Nathan Lewis

[OIFVeteran]

I refuse to believe it’s useless to try. Conservative/Republicans are suppose to be the adults. We can still be the party of fiscal responsibility by paying for the programs that the majority of Americans say they want.

Social Security would be the easiest place to start. Lift the cap on the amount of income subject to the social security tax and place a cap on the maximum benefit amount allowed. We would have to reach across the aisle to do this, and fight the country club republicans, but I believe it is politically doable.

I saw one proposal that suggested this on top of making a minimum insured amount of $1500.00.(right now the average social security retirement amount is about $1200.00.) Then having a maximum insured amount of $3000.00. The numbers they ran showed by enacting this plan Social Security would remain solvent for the entire baby boomers generation and then start supplying a surplus to the budget like it did for most of it’s existence.

What we are doing now won’t work. The cut taxes and spend philosophy Republicans have had since Reagan has exploded the debt way worse than any tax and spend President the democrats ever put into office. Hell, Obama even took a page from this playbook by lowering the social security tax while he was in office.

We need to do something or we will eventually hit a crisis or have an economic collapse.

[Brilliant]

Until now the biggest problem with increasing social security taxes was that social security was running a surplus and the surplus money was just being used to fund new spending in the general budget anyway. So there was no point in increasing taxes. It would just increase funding in the general budget anyway. Starting next year the social security trust fund will start running a deficit. However the trustees say that it is pretty much impossible to design a tax system that would fund the full benefits after 2034. We can cut the benefits by 25% and the current taxes will be sufficient for the foreseeable future. So again there is no point in taking on the divisive issue.

[OIFVeteran]

No politician is gong to let benefits get cut by 25%, it is political suicide.

The surplus was always put into the general fund since the law was first passed. It’s one of the main reasons our deficit, debt, and income tax has been so low.

Do you have a link to where the trustees have said there is no tax system that would fund the full benefits after 2034? I have done a lot of research on this and never heard that. In fact in previous reports they have said without increasing taxes or reducing benefits social security can still pay 75% of benefits.(which will never happen as I stated previously).

[Brilliant]

That makes sense in the abstract but what it ignores is that it’s literally impossible to increase taxes enough to avoid cutting benefits by that amount according to the trustees. Maybe you can delay it for a few years but that is the best you can do and it would require a massive increase in taxes even to do that.

[Brilliant]

From the standpoint of the GOP they tried to fix social security several times and got nothing for it because the Dems just demagogued it. Reagan raised taxes in a compromise that was intended to fix the shortfall permanently. The Dems ran against the tax increase in the next election, regained the majority and then increased the benefits so that we were right back to square one. There is no point in the GOP trying to fix this. If it is to be “fixed” then the heavy lifting will have to come from the Dems. They don’t seem inclined to do it. They are still demagoguing it. In fact they are proposing to increase benefits at a time when we don’t have the money to pay the existing benefits.