Medicare tax already has no income cap, and that model is what should be done for FICA. Cutting benefits would end up costing the government in other ways, and means testing is simply unfair and pulling the rug. First, eliminate the cap, then consider increasing eligibility to 65 rather than 62, leaving a rate hike for all as last resort.
I think means testing is fine, so long as benefits are cut for only those who really don't need it. But I'm not sure about raising the retirement age, because the physical jobs take a heavier toll on people's bodies and health, and they need an earlier retirement.
Actually there is already a measure of flexibility with the retirement age. The numbers are not fixed in stone. If someone encounters some physical challenge or the employer goes out of business, one can receive SS early at a lower rate, and if they outlive the difference they can return to the better rate. Diminished income also enables Medicaid and other compensations.
"Need" is irrelevant. The "official date" is established for actuarial purposes and the beneficiary (or beneficiary's family) makes the determination which over time does not affect the arithmetic. For example I had the option of delaying my SS benefit in return for a larger monthly amount which would begin later.
(Part of the confusion of this discussion is that few people have any idea how actuarial numbers apply to both retirement and insurance plans. Which is why when I was at GSU one of the most prestigious studies in the business school was actuarial science. It's probably something connected with computers now but in the early Seventies it was actuarial science.)
I've been waiting for this morning's Regular Order. I have not yet read Jamie's report but Heather Cox Richardson's Letter from an American is a must-read summation of the corruption of this administration.
--> Congress passed federal securities laws and banking regulation in the 1930s after it became clear that a small group of wealthy investors had manipulated the markets and misused bank funds. Pressure to clean up Wall Street came from entrepreneurs and small investors, who knew they could not do business or make gains in the market if the system was rigged against them. A healthy economy depended on a level playing field for everyone.
Now, it appears, we are watching the dismantling of those protections and not only the long-term skewing of our system toward the very wealthy, but also a dramatic skewing in real time. On Saturday, Trump began selling access to his social media posts to Wall Street trading firms milliseconds before they go public, permitting them to buy and sell with insider information. The cost for this service, according to Marina Dunbar of The Guardian, is up to $100,000 a month.
For “saving” Social Security, a good first step would be to eliminate the employer side only cap of $184K. That would bring in more revenue without increasing the future payout to the employee (since their cap stayed in place). A second step would be to have adequate staffing to root out fraud. Eliminating fraud is the the most cost effective way to increase revenue/reduce expenses of this (and other programs, especially the IRS). On a much smaller scale, another step would be for Trump to quit pardoning (and wiping out the restitution part of their sentence) to tax cheats, especially those that stole their employee withholdings for social security and Medicare.
Regarding Social Security one of the best-kept secrets in America is the cap on Social Security taxes for upper-income Americans as noted in the three options:
* Eliminating the payroll tax cap (now at $184,500).
* Raising the retirement age.
* Limiting benefits for wealthy seniors
Perhaps Jamie knows why but I see no reason why that "tax cap" should not simply be raised, not eliminated.
I was blessed in my working life to reach that cap a few times and until then I had no idea what it really means. It means Social Security is not only for the benefit of the millions of working people feeding the kitty, it also means that every year when someone reaches that threshold there will be no further FICA deductions for the remainder of that calendar year. When I received my regular pay and bonus checks the usual deductions (state and local income taxes, group insurance, retirement account, etc.) would not include FICA deductions until the following January when the next tax year started.
The first time I noticed that I realized none of the cafeteria staff had any idea that my exemption even existed. Most of them did not earn enough to afford the company group insurance yet they were the beating heart of the business. From that day on I never forgot how privileged I was to have hit that income level so I do not understand why that income cap cannot be increased to feed the Social Security a little more to keep it financially secure.
Later those approaching official retirement can receive a smaller income for "early" access. And likewise delaying that benefit can result in a higher monthly check -- but those choices are at the end of the trail since all benefits stop when life ends. (The actuarial arithmetic works out the details but that's a different conversation. "Limiting benefits for wealthy seniors" is a different subject but FICA income is chicken feed for most compared with other assets.)
The plan was to build up a trust fund, and then spend it. That's what we're doing now. we don't need 2.8 trillion in bonds and we should continue to cash them in as planned. The main problem is income inequality and if wages had kept pace with productivity we wouldn't have any problem at all. Raise the minimum wage. And raise taxes on billionaires while you're at it.
SS/Medicare funding will not get reformed until the last possible moment. That seems to have become the Congressional game plan on most contentious issues.
I find it startling that the Senate is looking into regulating the compensation of a few highly skilled young athletes but won’t address the minimum wage that effects almost every American at some point in their life.
There's another option to increase revenues in Social Security to pay for the benefits for Baby Boomers and older seniors. Increasing the US population by admitting more working age immigrants. The Trump Administration and Congressional Republican and voters' policy agenda of mass deportation and reducing legal immigration is designed and is doing the opposite to reduce the population of workers through forced detention-deportation, coerced self-deportation and a hostile environment for foreign college, master's and doctoral stydents. The US has lost more than one million people. They're overwhelmingly working age adults.
Flashback to my 1994 economics class when to professor told us the SS fund would be insolvent by 2032. The senior members of Congress have kicked the can for decades, and now every solution is bad. The boomers leading committees won't take their lumps for letting this happen. They left their genx kids to fend for themselves in youth, and they'll make them do it in old age.
Remove the cap altogether, leave the age test and reduce benefits for seniors with income > $500K.
Cute that Congressfolk have their own little cubbies to put electronics into. I hope there's a cop who hands them back out after meetings. I wouldn't trust most Congressfolk to only grab their own devices.
I would strongly oppose raising the retirement age. I've spent fifty years working my ass off, working my fingers to the bone (literally, I have bony fingers and no ass). Raise the cap some and eliminate benefits to the extremely wealthy; the rich need to understand that without the less fortunate, they wouldn't be so well off. It's the very least the wealthy can do to support who can't afford basic necessities.
"Representative Edwards engaged in conduct towards Staffer 1 or Staffer 2 that was highly unprofessional, made the women feel uncomfortable, and/or gave the appearance of a sexual or romantic advance" - I don't understand this. This would make him a fairly mainstream Republican politician by 2026 standards. Make no sense that he would not continue in Congress, his voters would be happy to see him continue.
Medicare tax already has no income cap, and that model is what should be done for FICA. Cutting benefits would end up costing the government in other ways, and means testing is simply unfair and pulling the rug. First, eliminate the cap, then consider increasing eligibility to 65 rather than 62, leaving a rate hike for all as last resort.
I think means testing is fine, so long as benefits are cut for only those who really don't need it. But I'm not sure about raising the retirement age, because the physical jobs take a heavier toll on people's bodies and health, and they need an earlier retirement.
Actually there is already a measure of flexibility with the retirement age. The numbers are not fixed in stone. If someone encounters some physical challenge or the employer goes out of business, one can receive SS early at a lower rate, and if they outlive the difference they can return to the better rate. Diminished income also enables Medicaid and other compensations.
Who decides what the "need" is and isn't?
"Need" is irrelevant. The "official date" is established for actuarial purposes and the beneficiary (or beneficiary's family) makes the determination which over time does not affect the arithmetic. For example I had the option of delaying my SS benefit in return for a larger monthly amount which would begin later.
(Part of the confusion of this discussion is that few people have any idea how actuarial numbers apply to both retirement and insurance plans. Which is why when I was at GSU one of the most prestigious studies in the business school was actuarial science. It's probably something connected with computers now but in the early Seventies it was actuarial science.)
I've been waiting for this morning's Regular Order. I have not yet read Jamie's report but Heather Cox Richardson's Letter from an American is a must-read summation of the corruption of this administration.
--> Congress passed federal securities laws and banking regulation in the 1930s after it became clear that a small group of wealthy investors had manipulated the markets and misused bank funds. Pressure to clean up Wall Street came from entrepreneurs and small investors, who knew they could not do business or make gains in the market if the system was rigged against them. A healthy economy depended on a level playing field for everyone.
Now, it appears, we are watching the dismantling of those protections and not only the long-term skewing of our system toward the very wealthy, but also a dramatic skewing in real time. On Saturday, Trump began selling access to his social media posts to Wall Street trading firms milliseconds before they go public, permitting them to buy and sell with insider information. The cost for this service, according to Marina Dunbar of The Guardian, is up to $100,000 a month.
For “saving” Social Security, a good first step would be to eliminate the employer side only cap of $184K. That would bring in more revenue without increasing the future payout to the employee (since their cap stayed in place). A second step would be to have adequate staffing to root out fraud. Eliminating fraud is the the most cost effective way to increase revenue/reduce expenses of this (and other programs, especially the IRS). On a much smaller scale, another step would be for Trump to quit pardoning (and wiping out the restitution part of their sentence) to tax cheats, especially those that stole their employee withholdings for social security and Medicare.
Regarding Social Security one of the best-kept secrets in America is the cap on Social Security taxes for upper-income Americans as noted in the three options:
* Eliminating the payroll tax cap (now at $184,500).
* Raising the retirement age.
* Limiting benefits for wealthy seniors
Perhaps Jamie knows why but I see no reason why that "tax cap" should not simply be raised, not eliminated.
I was blessed in my working life to reach that cap a few times and until then I had no idea what it really means. It means Social Security is not only for the benefit of the millions of working people feeding the kitty, it also means that every year when someone reaches that threshold there will be no further FICA deductions for the remainder of that calendar year. When I received my regular pay and bonus checks the usual deductions (state and local income taxes, group insurance, retirement account, etc.) would not include FICA deductions until the following January when the next tax year started.
The first time I noticed that I realized none of the cafeteria staff had any idea that my exemption even existed. Most of them did not earn enough to afford the company group insurance yet they were the beating heart of the business. From that day on I never forgot how privileged I was to have hit that income level so I do not understand why that income cap cannot be increased to feed the Social Security a little more to keep it financially secure.
Later those approaching official retirement can receive a smaller income for "early" access. And likewise delaying that benefit can result in a higher monthly check -- but those choices are at the end of the trail since all benefits stop when life ends. (The actuarial arithmetic works out the details but that's a different conversation. "Limiting benefits for wealthy seniors" is a different subject but FICA income is chicken feed for most compared with other assets.)
I like your ideas, but sadly, few people have near as much empathy as you do.
Empathy has little or nothing to do with it. The arithmetic is pretty straightforward. See my reply to Brad W above.
The plan was to build up a trust fund, and then spend it. That's what we're doing now. we don't need 2.8 trillion in bonds and we should continue to cash them in as planned. The main problem is income inequality and if wages had kept pace with productivity we wouldn't have any problem at all. Raise the minimum wage. And raise taxes on billionaires while you're at it.
SS/Medicare funding will not get reformed until the last possible moment. That seems to have become the Congressional game plan on most contentious issues.
I find it startling that the Senate is looking into regulating the compensation of a few highly skilled young athletes but won’t address the minimum wage that effects almost every American at some point in their life.
There's another option to increase revenues in Social Security to pay for the benefits for Baby Boomers and older seniors. Increasing the US population by admitting more working age immigrants. The Trump Administration and Congressional Republican and voters' policy agenda of mass deportation and reducing legal immigration is designed and is doing the opposite to reduce the population of workers through forced detention-deportation, coerced self-deportation and a hostile environment for foreign college, master's and doctoral stydents. The US has lost more than one million people. They're overwhelmingly working age adults.
Flashback to my 1994 economics class when to professor told us the SS fund would be insolvent by 2032. The senior members of Congress have kicked the can for decades, and now every solution is bad. The boomers leading committees won't take their lumps for letting this happen. They left their genx kids to fend for themselves in youth, and they'll make them do it in old age.
Eliminating the payroll tax cap has always seemed like a no-brainer to me. It should have been done already.
I would vote for all three. Raise the cap to $300,000. Raise the age by 2 years. Limit benefits for seniors earning over $500,000.
Eliminate the payroll tax cap.
Remove the cap altogether, leave the age test and reduce benefits for seniors with income > $500K.
Cute that Congressfolk have their own little cubbies to put electronics into. I hope there's a cop who hands them back out after meetings. I wouldn't trust most Congressfolk to only grab their own devices.
I would strongly oppose raising the retirement age. I've spent fifty years working my ass off, working my fingers to the bone (literally, I have bony fingers and no ass). Raise the cap some and eliminate benefits to the extremely wealthy; the rich need to understand that without the less fortunate, they wouldn't be so well off. It's the very least the wealthy can do to support who can't afford basic necessities.
On SS, Removing the cap goes a long way. Further, something needs to be done to address comp in stock against which the recipients "borrow".
"Representative Edwards engaged in conduct towards Staffer 1 or Staffer 2 that was highly unprofessional, made the women feel uncomfortable, and/or gave the appearance of a sexual or romantic advance" - I don't understand this. This would make him a fairly mainstream Republican politician by 2026 standards. Make no sense that he would not continue in Congress, his voters would be happy to see him continue.