Graham: Reduce benefits for wealthy seniors

Charleston City Paper ^ | 2011-01-02 | Greg Hambrick

[rabscuttle385]

Seniors should be older before the receive Social Security and wealthy Americans should receive less benefits across the board, says Sen. Lindsey Graham, R-S.C.

He made the argument in an interview on Sunday's Meet the Press, but it's a position Graham has advocated for on the stump in South Carolina, including a 2009 stop at The Citadel with Sen. John McCain, R-Ariz.

"What I'm going to do is challenge this country to make some hard decisions," Graham said at the time, telling the crowd of cadets, Tea Partiers, and Graham supporters that they shouldn't give Congress a pass on the tough stuff.

[abb]

See post #440. There’s a good place to start. Again, more taxes are a non-starter. Empirical data suggest that government will only waste any increase in revenue. I am a much better steward of my capital than government at any level.

[justlurking]

if SS were used ONLY to pay retirement benefits and ONLY in a quantity previously funded by what that INDIVIDUAL has paid in, then there's plenty of money in the program.

I wish that it was. Even the currently legislated benefits don't match the actual value of the contributions (plus interest) unless you live to about age 120.

If they're going to stop paying out selectively, then they should start with all the other payouts that they now provide (surviving spouse, disability, etc.) and reduce outlays to those that paid so little into the system in their productive years that they are essentially collecting welfare.

There's nothing wrong with survivor payments as long as it's done on an actuarially sound basis. Traditional defined-benefit pension plans have that option: you just have to specify it when you start receiving benefits.

The monthly benefit is then calculated based on BOTH the age of the pensioner and the spouse, and set accordingly to reflect the average life expectancy of both.

[kindred]

[In the very short future, if nothing changes, the US will only collect 35% in taxes of what it spends. Look at the charts and tell me how we make up the 65% in either spending cuts or increased tax revenue?]

It is so simple. The governmdent needs to spend less and the best start is to downsize government by downsizing the bureraucrats, politicians, government unions and politicians and other worthless thieves therein, and then taking the low tax revenue there in and living within the federal budget.
I never hear the lousy pols suggest paycuts or smaller government or replacing worthless evil government agencys that do nothing but steal money with real private captalist companies that actually work for a living.

[palmer]

Wealthy seniors should be forced to take a buyout equal to the amount of money they put in over the years, plus a reasonable amount of interest.

LOL! I presume you realize the money's gone, been spent a long time ago. We don't have the money to give back, never mind interest.

[al_again2010]

It is so simple. The governmdent needs to spend less and the best start is to downsize government by downsizing the bureraucrats, politicians, government unions and politicians and other worthless thieves therein, and then taking the low tax revenue there in and living within the federal budget. I never hear the lousy pols suggest paycuts or smaller government or replacing worthless evil government agencys that do nothing but steal money with real private captalist companies that actually work for a living.

Now we are getting somewhere! Do you realize that what you are proposing does not make a dent in the problem???

Entitlement spending and the military took up 82% of the budget in 2010 yet we only collected 55% of the taxes required to cover costs (That is 45% deficit spending). So if you are able to cut 50% of the 'other' spending, that accounts for 9% reduction in spending and we would still have 36% deficit spending. Now take in to account the fact that medicare and social security costs are set to explode, you we will be at 50%+ deficit spending in 5-10 years.

Do you see that it is not a simple solution and that drastic cuts are required now?

[palmer]

Lots of ridiculous posts on this thread (not yours). There’s no money left, we have borrowed to the hilt and that free ride will end at some point. But some people are arguing over whether someone should get some “entitlement” or not? Our options are pretty simple: inflate or default. We will probably do some of both, some people won’t get their “entitlement” and those that do will get it in worthless dollars.

[al_again2010]

See post #440. There’s a good place to start. Again, more taxes are a non-starter. Empirical data suggest that government will only waste any increase in revenue. I am a much better steward of my capital than government at any level.

You are being obtuse and you know it! You only generalize but can't define anything specific to cut - you make the politicians proud!

[sauropod]

How can means testing work when you must "contribute" to SS in the form of OASDI taxes?

"Means testing" in that case means "outright theft."

Explain THAT!

[justlurking]

Look, you might as well face facts and accept that your wallet has been picked. Trying to get it back by robbing someone else isn’t exactly a reasonable approach.

I'm OK with that. But, what I don't like is that I'm the only one that has to live with the consequences.

I've made a lot of sacrifices over the past 30 years to invest in IRA's, 401(k)'s, and taxable investments to be sure that I can retire at a standard of living somewhere close to what I have now.

My neighbor earned approximately the same salary all this time, but he blew everything on new cars, boats, vacations, etc. He doesn't have anything left except a few hundred in his checking account.

Graham is essentially advocating that I should get shafted so that my neighbor can get his full benefit. I've been the responsible one, and I'm the one be penalized. That's wrong, no matter how you slice it.

You want to reduce Social Security's obligations? Fine. Do it across the board. Current projections are that existing taxes will only fund about 75% of legislated benefits after about 2040. Start reducing benefits for EVERYONE now, year by year until it meets that milestone. Keep going and reduce it to zero, while simultaneously ramping up a fully-funded private alternative.

But, targeting a specific group of people without sufficient political power to stop it is class warfare.

[al_again2010]

Inflation does not solve the problem as the benefits are tied to COLA. This needs to be fixed and the inflation can be used to cure.

There is still a way to solve this problem without resorting to massive inflation or default but, as you can see here, everyone would rather kick the can down the road rather than face reality. When the US defaults, then our seniors will know real pain. And unfortunately we will all get what we deserve for not taking care of this problem!

It will be quite the sight to see that in 10 years Canada will lock it's borders to prevent US citizens from immigrating! This day is coming.

[al_again2010]

I'm OK with that. But, what I don't like is that I'm the only one that has to live with the consequences. I've made a lot of sacrifices over the past 30 years to invest in IRA's, 401(k)'s, and taxable investments to be sure that I can retire at a standard of living somewhere close to what I have now. My neighbor earned approximately the same salary all this time, but he blew everything on new cars, boats, vacations, etc. He doesn't have anything left except a few hundred in his checking account. Graham is essentially advocating that I should get shafted so that my neighbor can get his full benefit. I've been the responsible one, and I'm the one be penalized. That's wrong, no matter how you slice it. You want to reduce Social Security's obligations? Fine. Do it across the board. Current projections are that existing taxes will only fund about 75% of legislated benefits after about 2040. Start reducing benefits for EVERYONE now, year by year until it meets that milestone. Keep going and reduce it to zero, while simultaneously ramping up a fully-funded private alternative. But, targeting a specific group of people without sufficient political power to stop it is class warfare.

I appreciate your frustration with the situation and agree we need across the board cuts. I do not believe there is the will to get this done and the problem and solution will only get much more difficult. The end result is that, if you are under 65, your 401k, IRA, etc.. will be significantly devalued and/or worthless in 10 years. MY advice to you, pull out your funds, buy a big boat and go on a very nice vacation!

Or we could get serious and start fixing the problem now!

[palmer]

We’ve been kicking the can for a while. They could untie the inflation indexing by indexing it to government warehouse cheese or stuff from the dollar store. Current seniors might not be too bad off in general, but the next generation who have spent down the 401k during unemployment is going to be completely screwed.

[abb]

You are being obtuse and you know it!

Not hardly. You're the one suggesting that producers need to yet again bear the burden while skirting the issue allowing non-producers first pull at the tit. Not a solution at all, I suggest. Are you perchance a government employee?

[verity]

Another member of Sniffy the Stalker troglodytes joins the party.

[justlurking]

OK. Let's start with a 25% across the board cut tomorrow for both SS and Medicare...the add 5% cuts every year for the next five years.

I would vote for that. According to current projections, Social Security taxes will fund only about 75% of legislated benefits about 2040 (when the phantom "trust fund" is exhausted). So, that would immediately put it on an actuarially sound footing.

However, that cut really has to be "across-the-board". Everyone gets the same reduction, with no exceptions.

Since that's politically impossible, I'll counter with something like 2% per year, for the next 50 years. that means that the people starting in the workforce today will not receive any Social Security benefits, and they will know it.

Replace it with a mandatory participation in a private retirement plan.

When the benefits drop low enough that FICA and Medicare taxes result in a surplus, gradually reduce the tax rates until they disappear altogether.

This is a far better solution than targeting a group of voters that don't have enough political power to stop it. When that turns out to be inadequate, who is going to be next?

[BykrBayb]

You just hate that FReepers know what you’ve posted, don’t you? If it bothers you that much, why don’t you ask the mods to delete your posts? Don’t blame those of us who just happened to read them.

[verity]

Have you challenged other posters on this thread who concur with Graham's proposal?

Of course not because you and Sniffy are stalkers.

[al_again2010]

You have yet to define what cuts you would make to address the looming 65% deficit spending. And you can infer that this small business owner is a government employee all you want it does not change any of the facts I have stated!

Your refusal to directly answer any of my questions is very telling as to the weakness of your position!

[meyer]

There's nothing wrong with survivor payments as long as it's done on an actuarially sound basis. Traditional defined-benefit pension plans have that option: you just have to specify it when you start receiving benefits.

The monthly benefit is then calculated based on BOTH the age of the pensioner and the spouse, and set accordingly to reflect the average life expectancy of both.

I agree. I think I mentioned that in another, later post buried somewhere in this thread. But it's a long, long thread.

In the meantime, it seems that a couple more marxists have joined the discussion. "From each according to his abilities; to each according to his needs" seems to be the new RINO mantra. How progressive...

[drbuzzard]

>What makes you think the dems will allow the SS plan to become a poverty program? They’d demagogue it to death.

Yes, this is certainly true, and certainly a justified claim based on prior experience. We are likely hosed.

Unless the voting populace suddenly grows up and learns that free lunches don’t really exist, we are in for a heap of trouble. We’ve been having ‘free’ lunches for a long time now, and the bill is about to come due.

>You still haven’t told me how far down the economic ladder this would have to go prevent economic disaster.

Probably the whole system will have to be cut back. Everyone is likely to feel the pain. To be quite honest, I can’t imagine the system really working for anyone beyond the destitute, because otherwise the numbers are just too large.