Social Security Reform 2016 -What Is It and Where Do the Candidates Stand

Posted by Tina

Social Security reform has been a hot button issue for several decades. Everyone acknowledges that the system cannot sustain itself and is adding to our national debt. The problem grows worse year by year. As the very large baby boomer generation starts to blossom into a full blown bouquet the need for reform will become more apparent. The baby boom was followed by generations that chose to have fewer children so that generations that followed will bear a larger burden than their parents and grandparents did…fewer workers for each SS recipient.

Reforms have been supported and legislation proposed by democrats and republicans in Congress over the decades. See examples here for plans sponsored or co-sponsored by democrats. Many of the plans suggest taking a portion of employee contributions and investing them in a private personal account just as government employees can invest. Some suggest this as an optional reform. Other proposals include raising the age of retirement and making adjustments to the percentage that higher earners pay. Follow the link to read summaries of various proposals.

Four of the reasons I believe that SS reform never gets done are, 1. The issue isn’t supported by radical progressives who are wedded to dependency and redistribution, 2. Reform has been trashed politically to demean and defeat republicans in election years, 3. Reform will never get done unless democrats get the credit, and 4. Republicans failed to do as they promised to pass reform legislation when they had the majority in Congress.

An example of democrat duplicity on the issue comes from the transition from the Clinton era to the George w. Bush era and can be found in a quote from an article posted at National Review January 14, 2005 and, re-posted by Freedomworks:

In September, Vice President Al Gore went to the Capitol for a Social Security pep rally with congressional Democrats, including House Minority Leader Richard Gephardt, Sen. Edward Kennedy, Sen. Barbara Boxer, and others. Gore said that in coming years–by 2032–“Social Security faces a serious fiscal crisis.” Everyone in the group stayed remarkably on-message as they warned that the future was dire: “Save Social Security first,” said Gore, “Save Social Security first,” said Gephardt, “Save Social Security first,” said Kennedy, “Save Social Security first,” said Boxer.

Today, some of those same lawmakers are leading the opposition to President Bush’s initiative and no longer fear a crisis in Social Security.

Michael D. Tanner of CATO explains and unravels some of the inaccuracies and myths surrounding this issue. The article is well worth a read. He also informs a bit about the current presidential candidates’ positions:

With the exception of Donald Trump and Mike Huckabee, all the GOP candidates favor some type of Social Security reform that will reduce future benefits, although only Ted Cruz actively seeks to revive President George W. Bush’s plan for personal accounts. The Democratic presidential candidates, meanwhile, not only oppose any cuts to future Social Security benefits but are flirting with various benefit expansions.

As the election gets closer I hope we will hear more from the top candidates on this issue. Americans need and want solutions that work and we’ve grown weary of games and lies. This issue is important to many of us because it affects our children and grandchildren. It’s about time the boomer generation gave some thought to their future and our debt.

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6 Responses to Social Security Reform 2016 -What Is It and Where Do the Candidates Stand

  1. Dewster says:

    OMG!

    1) Social Security does not directly add to the National Debt. That is spin. They do move money around for peter to pay paul but that is not the failure of the program.

    “ocial Security is a self-funded program that is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084, which basically equals full benefits, once inflation is accounted for. There is no threat of the program running out of money any time soon. We could make it solvent far into the future if we simply raised the payroll tax cap — meaning that income above $106,000 would be taxed just like income below that amount is. It does not add to the deficit nor take funds from the general treasury.”

    Tina stop cashing your check and railing to pull up the ladder behind you.

    It is the Koch goal to get rid of all social safty nets.

    • Chris says:

      Not sure where you got that quote, Dewey, but I have to agree with it. There is no reason for the cap to exist, and eliminating it is the solution.

      • dewster says:

        Bernie Sanders has spoken on this for years. He has been on the radio every Friday for about 11 years. I watch congress as well. I noticed him during a heated debate in congress on this.

        I left out link because of bias when names are mentioned. facts are facts.

        Time we discuss issues without party or names.

        Bottom Line He is correct on this.

        I guess the question is do we support social security. It is on the Koch doctrine to abolish Social Security. GW boasted he was going to use his political capital to do just that. In the end Americans voted to keep it because they like the program.

        This fight has been going on since FDR. History is really telling and when you connect those dots it all becomes clear.

        We must remember the past to navigate the future.

        more: http://www.sanders.senate.gov/newsroom/must-read/on-social-security

  2. Tina says:

    I notice Dewey’s quote materialized out of thin air.

    The following information from Pew Research is from 2013. The national debt has grown from the reported $16.74 trillion to over $18 trillion since then, held in check in part by the sequester cuts in the growth of government. I’m assuming some of the other figures have changed also. Still, this offers an overall view of the burgeoning problem:

    Though U.S. government debt is perhaps the most widely held class of security in the world, as of the end of September 28.4% of the debt (about $4.76 trillion) was owed to another arm of the federal government itself. The single biggest creditor, in fact, are Social Security’s two trust funds, which together held $2.76 trillion in special non-traded Treasury securities (16.5% of the total debt). (Social Security revenues exceeded benefit payments for many years; the surplus was required by law to be invested in Treasuries.) Another big holder: the Federal Reserve system, which collectively held nearly $2.1 trillion worth of Treasuries (12.4% of the total debt) as of last week. (The Fed’s holdings are included in the “debt held by public” category.)…In fiscal 2013, which ended Sept. 30, net interest payments on the debt totaled $222.75 billion, or 6.23% of all federal outlays. (The government paid out an estimated $420.6 billion in interest, but that included interest credited to Social Security and other government trust funds

    As if $222.75 billion in interest was a good thing because it was interest credited to SS!

    Federalbudget.com:

    SOCIAL SECURITY

    is not part of the Federal Budget (General Fund). It is a separate account from the General Fund, and has its own source of income (“Payroll Tax”). Social Security payments go in the Social Security Trust Fund (SSTF), and should NOT be counted as general revenue. The SSTF is supposed to be used to pay benefits. But, the Government is under NO OBLIGATION to pay Social Security benefits, and has even borrowed substantially from the SSTF for general operations!

    As of August 2010, there is less being paid into the Social Security Trust Fund than is being paid out to beneficiaries. Social Security is now using its “surplus”.

    Other Government agencies borrowed from that trust fund, and now have to pay it back. But they already spent it! So how will they pay it back? Through bailouts and taxes. Here is a “must read” about the problem. Your payroll taxes are going into a bottomless hole!

    Links within the blockquote above go to a great 2010 article at American Thinker, here and a site comparing the situation with SS to Bernie Madoff’s Ponzi scheme, here

    Geez, Dewey, SS has been run like one big Ponzi scheme! It’s “solvency” is achieved with accounting gimmicks!

    The fed has finally begun to raise interest rates…imagine the interest on that debt rising too, tra la!

    Future generations will have to produce a he77 of a lot to sustain this scheme, not to mention the entire cost of the big government albatross.

    There has never been a serious plan to eliminate SS except maybe on demand from the people! Dewey is spinning his usual crapola!

    Dewey, I would willingly give up whatever portion of my SS a reform bill called for IF it meant my kids and grand-kids could have the option of putting a portion of their SS taxes into an annuity or other safe instrument that would offer a better return on their money, create sustainability within the SS program, means test and allow those who have already paid into the system to remain on the present system, and stem the tide of our growing debt.

    Your characterization of the reform plans that have been proposed is totally off base and shows your ignorance as well as your slavish partisan devotion to big government controlling progressive spin.

    There is no reason for government to manage and control “safety nets” when it has been shown time and again that private safety nets do a better job for less money.

    What you progressives want is the money, power, votes, and control that these programs buy!

    anyone interested in actually learning about possible results from reform ideas can go here and here:

    As a quiet example of how privatizing Social Security works in the real world, Chile’s 30-year experiment is succeeding beyond expectations. Instead of running huge deficits to fund the old “PayGo” system, private savings now exceed 50 percent of the country’s Gross Domestic Product.

    Prior to May 1, 1981, the Chilean system required contributions from workers and was clearly in grave financial trouble. Instead of nibbling around the edges to shore up the program for another few years, José Piñera, Secretary of Labor and Pensions under Augusto Pinochet, decided to do a major overhaul of the system:

    We knew that cosmetic changes — increasing the retirement age, increasing taxes — would not be enough. We understood that the pay-as-you-go system had a fundamental flaw, one rooted in a false conception of how human beings behave. That flaw was lack of a link between what people put into their pension program and what they take out….

    So we decided to go in the other direction, to link benefits to contributions. The money that a worker pays into the system goes into an account that is owned by the worker.

    The system still required contributions of 10 percent of salary, but the money was deposited in any one of an array of private investment companies. Upon retirement, the worker had a number of options, including purchasing an annuity for life. Along the way he could track the performance of his account, and increase his contribution (up to 20 percent) if he wanted to retire earlier, or increase his payout at retirement.

    How well has the system performed? John Tierney, a writer for the New York Times, went to visit Pablo Serra, a former classmate and friend in Santiago a few years ago, and they compared notes on how well their respective retirement programs were doing. Tierney brought along his latest statement from Social Security, while his friend brought up his retirement plan on his computer. It turned out that they both had been contributing about the same amount of money, so the comparison was apt, and startling, said Tierney:

    Pablo could retire in 10 years, at age 62, with an annual pension of $55,000. That would be more than triple the $18,000 I can expect from Social Security at that age. OR

    Pablo could retire at age 65 with an annual pension of $70,000. That would almost triple the $25,000 pension promised [to me] by Social Security starting a year later, at age 66. OR

    Pablo could retire at age 65 with an annual pension of $53,000 and [in addition receive] a one-time cash payment of $223,000.

    Tierney wrote that Pablo said “I’m very happy with my account.” Tierney suggested that, upon retirement, Pablo could not only retire nicely, but be able to buy himself a vacation home at the shore or in the country. Pablo laughed it off, and Tierney wrote: “I’m trying to look on the bright side. Maybe my Social Security check will cover the airfare to visit him.”

    According to Investors Business Daily, the average annual rate of return for Chilean workers over the last 30 years has exceeded 9% annually, after inflation, whereas “U. S. Social Security pays a 1% to 2% (theoretical) rate of return, and even less for new workers.” (continues)

    And before you yammer on about stock market crashes and the like please note the number of lefties who slam Wall Street while their 401K’s and other pension plans are doing quite well invested in the stock market. The stock market has it’s ups and downs but since it’s beginning it has always moved higher.

  3. dewster says:

    Tina there is much propaganda against social security because it is on the agenda to abolish it. I posted David Koch’s VP Platform did not not read it?

    The fascists have been against it since it was born, They hate every thing in the New Deal and have railed it since. Bottom Line the new Deal saved us and created a middle class. That pissed them off.

    have you ever read the Powell Memo?

  4. dewster says:

    Here are just a few excerpts of the Libertarian Party platform that David Koch ran on in 1980:

    •“We urge the repeal of federal campaign finance laws, and the immediate abolition of the despotic Federal Election Commission.”

    •“We favor the abolition of Medicare and Medicaid programs.”

    •“We oppose any compulsory insurance or tax-supported plan to provide health services, including those which finance abortion services.”

    •“We also favor the deregulation of the medical insurance industry.”

    •“We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive Social Security system. Pending that repeal, participation in Social Security should be made voluntary.”

    •“We propose the abolition of the governmental Postal Service. The present system, in addition to being inefficient, encourages governmental surveillance of private correspondence. Pending abolition, we call for an end to the monopoly system and for allowing free competition in all aspects of postal service.”

    •“We oppose all personal and corporate income taxation, including capital gains taxes.”

    •“We support the eventual repeal of all taxation.”

    That is the GOP Platform for their Master. Why did John Boehner go to David Koch to ask him to tell his politicians to help resolve the budget crisis? Because they answer to to Koch’s and friends, not the people.

    You are blind to who really controls congress.

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