Understanding Social Security
Before we get started, I would like to know how you feel about Social Security. If you would rather not take the poll, just skip it.
How do you feel about Social Secuity?
Social Security is one of the Most Successful Social Programs
Over the years, corporations have destroyed retirement dreams by eliminating defined benefit pension plans. But social security continues to pay full benefits. Today the program is under attack from Wall Street, the Republican Party, and even some Democrats. They want the dismantling of Social Security to begin in the very near future.
Social Security should not be privatized as some people in congress are proposing. The benefits should not be cut and the retirement age should not be raised. The program has paid every nickel it has owed to every eligible American.
Social Security, Established 75 Years Ago
Before Social Security, half of the elderly lived in poverty. Today, we have a lot of people who are still in poverty, but that number is nowhere near 50 percent as it was before. That number today is less than 10 percent. Social Security provides dignified support for those in need of care.
Misinformation About Social Security
There is a ton of misinformation that is floating around about social security. That includes, the program is in crisis; going bankrupt, and the trust fund contains piles of worthless IOU's. Congress is proposing the following:
- Privatizing the system
- Lowering costs of living adjustments
- Cutting benefits
- Weaning everyone off of the program except current retirees
- Increasing retirement age to 69
- Reducing benefits to future retirees who make as little as $42,000.00 per year.
You can read my hub on political spin for more information about how politicians spin the facts.
Social Security, the Facts
- 2037 - The year when social security will not be able to pay 100% of benefits, but will able to pay out 78%
- 2.6 Trillion - The amount currently in the Social Security Trust Fund
- 4 Trillion - The amount Social Security is projected to grow by 2023
Social Security invests in U;S. Treasury bonds that are backed by the full faith and credit of the U.S. government. The program has not contributed one penny to the deficit because it is funded by payroll taxes.
Here a link to Frequently Asked Questions about the Trust Fund.
Why do they Want to Change Social Security?
There is a huge influence by Wall Street to privatize Social Security because it stands to make billions in profits by exploiting the novice investor. The "Less Government Movement" does not feel the necessity to provide retirement benefits to the elderly or those with disabilities.
Just think about your 401K or retirement program and how it fared during the financial melt down. Just think if your social security fund would have been invested in Wall Street. It is important to note that Social Security is not an investment, it is an insurance.
Social Security is not Bankrupt
Contrary to popular belief, Social Security is not bankrupt. In fact, Social Security does not need to be saved until 2037 when there will be a 22% gap in what is taken in and what will be paid out. Here are two numbers you need to know:
- $106,800.00 - Annual pay cap, where if you earn that amount or more, social security payments are no longer withdrawn from your paycheck
- 6.2% - The tax on payroll to cover social security. If self-employed, it's 12.4%. The tax is known as FICA (Federal Insurance Contribution Act)
Senator Bernie Sanders' Proposal
Senator Bernie Sanders of Vermont proposes, by removing the $106,800.00 cap, this will then capture the super rich who can reach that cap in a blink of an eye. That means, the super rich will pay into the program for the full year instead of up to the $106,800.00 cap. This will accumulate more money in the fund. Removing the cap would make Social Security solvent until 2085, as calculated by the non-partisan Congressional Budget Office (CBO). And, it won't affect those who's annual pay never reaches the cap.
This is a very simple solution to save Social Security and requires very little legislation. Please contact your congressman on this issue to save Social Security. To find contact information, please click on the link below.
eMail from Bernie Sanders 8/16/2012
In these highly volatile economic times, when millions of Americans lost their life savings in the 2008 Wall Street crash, it is important to remember that since its inception, through good economic times and bad, Social Security has paid every penny owed to every eligible beneficiary.
Despite Wall Street and right-wing misinformation, Social Security, which is funded by the payroll tax, does not contribute to the deficit. In fact, the Social Security Trust Fund today, according to the Social Security Administration, has a $2.7 trillion surplus and can pay 100 percent of all benefits owed to every eligible American for the next 21 years. Further, unlike the huge commissions paid out to Wall Street firms, Social Security is run with very modest administrative costs.
Despite Social Security's popularity and overwhelming success, we are now in the midst of a fierce and well-financed attack against Social Security. Pete Peterson, the Wall Street billionaire, has pledged $1 billion of his resources to cut Social Security and other programs of enormous importance to the American people. Other billionaires and Wall Street representatives are also working hard to weaken or destroy Social Security and endanger the well-being of millions of Americans. We must not allow their effort to succeed.
Let us never forget that the current deficit of $1 trillion was primarily caused by two unpaid-for wars and tax breaks for the rich. These policies were strongly supported by "deficit hawks." The deficit is also related to a major decline in revenue as a result of the Wall Street-created recession. The deficit is a serious issue, but we must not move toward deficit reduction on the backs of the elderly, the children, the sick and the poor. This would not only be immoral, it is bad economic policy. At a time when the wealthiest people in this country are doing phenomenally well and their effective tax rate is the lowest in decades, the top 1 percent must begin paying their fair share of taxes. At a time when large corporations are enjoying record-breaking profits, we have got to eliminate the huge corporate loopholes which result in a massive loss of federal revenue. At a time when we have tripled military spending since 1997, we must take a hard look at a bloated and wasteful Defense Department.
House Budget Committee Chairman Paul Ryan has been a proponent of privatizing the retirement program by putting seniors' savings into risky Wall Street investments. Even before tapping Ryan as his running mate, Republican presidential nominee Mitt Romney said he wants to begin the process of privatizing Social Security. He also would gradually increase the retirement age to 68 or 69. And he favors slowing the growth of benefits for persons with "higher incomes." Under a plan floated by Romney's allies on Capitol Hill -- Sens. Lindsey Graham (R-S.C.), Rand Paul (R-Ky.) and Mike Lee (R-Utah) -- someone making about $45,000 a year today who retires in 2050 would receive 32 percent less in annual Social Security benefits than under the current formula. By that definition, the top 60 percent of all wage earners would be considered "higher income."
President Barack Obama, meanwhile, was a staunch defender of Social Security in his 2008 campaign. So far this year, however, Obama has refused to stand behind his four-year-old opposition to cuts. In fact, the president has signaled that he may be open to lowering benefits by changing how they are calculated. In my view, it is long past time that the president told the American people in no uncertain terms, as he did in 2008, that he will not cut Social Security on his watch.
To keep Social Security's finances sound in the future I have introduced legislation -- identical to a proposal that Obama advocated in 2008 -- to apply the payroll tax on incomes above $250,000 a year. Under current law, only earnings up to $110,100 are taxed. The Center for Economic Policy and Research has estimated that applying the Social Security payroll tax on income above $250,000 would only impact the wealthiest 1.4 percent of wage earners.
Those who want to cut Social Security benefits are looking at a number of proposals. One of the most talked about ideas is moving toward a so-called "chained-CPI," which would not only impact seniors, but also military retirees and those who receive benefits from the Department of Veterans Affairs. The "chained-CPI" approach changes how the Consumer Price Index is calculated, so that a person 65 years old today would earn $560 a year less in Social Security benefits once they turn 75. Benefits would be cut by nearly $1,000 a year once they turn 85. Instead, I have proposed legislation to base Social Security cost-of-living adjustments on a Consumer Price Index for the Elderly, a measure that would increase benefits because it would take into account the real-life impact of rising health care costs and prescription drug expenses paid by seniors.
While we often take Social Security for granted, we must not forget that Social Security today is providing dignity and security to tens of millions of Americans. It is a program that is working and working well. We must stand up today, on the 77th anniversary of this enormously important program. We must pledge to continue the fight against the right-wing Republicans, some Democrats and their wealthy backers who want to destroy the program.
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