Posts Tagged Social Security Administration
Duped by Congressional Lies
Jun 13, 2012
Some of the responses to my column last week, titled “Immoral Beyond Redemption,” prove that Americans have been hoodwinked by Congress. Some readers protested my counting Social Security among government handout programs that can be described as Congress’ taking what belongs to one American and giving to another, to whom it doesn’t belong — legalized theft. They argued that they worked for 45 years and paid into Social Security and that the money they now receive is theirs. These people have been duped and shouldn’t be held totally accountable for such a belief. Let’s look at it.
The Social Security pamphlet of 1936 read, “Beginning November 24, 1936, the United States Government will set up a Social Security account for you. … The checks will come to you as a right.” (http://www.ssa.gov/history/ssb36.html). Americans were led to believe that Social Security was like a retirement account and that money placed in it was, in fact, their property. Shortly after the Social Security Act’s passage, it was challenged in the U.S. Supreme Court, in Helvering v. Davis (1937). The court held that Social Security was not an insurance program, saying, “The proceeds of both employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.” In a 1960 case, Flemming v. Nestor, the Supreme Court said, “To engraft upon Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands.”
Decades after Americans were duped into thinking that the money taken from them was theirs, the Social Security Administration belatedly and quietly tried to clean up its history of deception. Its website (http://www.ssa.gov/history/nestor.html) explains, “Entitlement to Social Security benefits is not (a) contractual right.” It adds: “There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. … Congress clearly had no such limitation in mind when crafting the law.” The Social Security Administration’s explanation fails to mention that it was the SSA itself that created the lie that “the checks will come to you as a right.”
Here’s my question to those who protest that their Social Security checks are not handouts: Seeing as Congress has not “set up a Social Security account for you” containing your 45 years’ worth of Social Security contributions, where does the money you receive come from? I promise you it is not Santa Claus or the tooth fairy. The only way Congress can give one American a dollar is to first take it from some other American. Congress takes the earnings of a person who’s currently in the workforce to give to a Social Security recipient. The sad fact of business is that Social Security recipients want their monthly check and couldn’t care less about who has to pay. That’s a vision shared by thieves who want something; the heck with who has to pay for it.
Then there’s the fairness issue that we’re so enamored with today. It turns out that half the federal budget is spent on programs primarily serving senior citizens, such as Social Security, Medicare and Medicaid. But let’s look at a few comparisons between younger Americans and older Americans. More than 80 percent of those older than 65 are homeowners, and 66 percent of them have no mortgage. Homeownership is at 40 percent for those younger than 35, and only 12 percent own their home free and clear of a mortgage. The average net worth of people older than 65 is about $230,000, whereas that of those younger than 35 is $10,000. There’s nothing complicated about this; older people have been around longer. But what standard of fairness justifies taxing the earnings of workers who are less wealthy in order to pass them on to retirees who are far wealthier? There’s no justification, but there’s an explanation. Those older than 65 vote in greater numbers and have the ear of congressmen.
- Face It: Social Security Is a Handout (lewrockwell.com)
- Face It: Social Security Is a Handout (txwclp.org)
- Walter Williams has a message for the greedy geezers (nj.com)
- TurboTax – Video: Social Security Tax – Who Is Exempt? (turbotax.intuit.com)
- Your Social Security Statement is Now Online (answers.iquote.com)
- How Social Security Income is Taxed (turbotax.intuit.com)
- Social Security Websites (socialsecurityhome.com)
- SSN Validator (programmableweb.com)
- If Assisting the Economically Deprived is Immoral Then Jesus Was a Pimp (woodgatesview.com)
- Hirono, Case differ on Social Security issue (staradvertiser.com)
May 20, 2012, 9:51 PM
Entitlement Reform For the Entitled
IF nothing is done about entitlement spending, and if our current tax breaks continue, then by 2025, tax revenue will be able to pay for Medicare, Medicaid, Social Security, interest on the debt and nothing else. The rest — defense, medical research, highways, education, energy — will have to be financed by deficits. Social Security’s funding is predicted to run short in 2033, Medicare’s trust fund in 2024.
Like much else in Washington, there is little bipartisan agreement on what to do about it. When it comes to Social Security and Medicare, Republicans emphasize cuts and privatization, while Democrats strongly oppose both approaches. Neither side was able to embrace the 2010 bipartisan Simpson-Bowles plan, which proposed lowering Social Security’s cost-of-living adjustments, increasing the taxable maximum income and raising the eligibility age to 69 by 2075.
But here is a better bipartisan reform: Graduated eligibility. Instead of having a fixed age at which people can get Social Security and Medicare, we should link the age of eligibility to lifetime wealth. The richer you are, the older you would have to be to be eligible for Social Security and Medicare.
Here’s how it would work. People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.
In all income brackets, those choosing to retire later than the standard age would still receive higher Social Security benefits, called delayed-retirement credits. For those choosing to retire earlier and accept reduced benefits, on the other hand, nothing would change in the lower bracket, while the minimum age would increase in the two higher income brackets. And wealthier older people would have the choice of buying into Medicare at age 65, though they would have to pay for it before the age of 70.
Demographic changes since Social Security was first enacted are a good argument for raising the retirement age. In 1935, a man who reached the age of 65 was likely to live almost 13 more years (and a woman, almost 15). But today, Americans who reach 65 are likely to live nearly 19 more years.
But graduated eligibility also accounts for the fact that the rich live longer than the poor, and that the longevity gap is increasing. In 2007, the Social Security Administration did a study of mortality and income. Among 65-year-old men born in 1922, those with income in the top half lived an average of 2.2 years longer than those in the bottom half. But among 65-year-old men born in 1941, those with income in the top half were projected to live an average of 5.3 years longer. Thus, requiring wealthier Americans to wait five more years to claim Social Security and Medicare has the effect of giving an average rich and an average poor person nearly the same number of years of benefits.
This reform also combines several important values. The main reason Social Security and Medicare have such strong public support is that they are universal benefits; they are not just for the poor. With graduated eligibility, all Americans will still get benefits, regardless of income; the only thing that changes is when. And because the rich, on average, would live longer and get the same number of years of benefits as those in lower income brackets, the plan should appeal to those who still feel strongly that everyone should pay their fair share.
It also makes practical sense. Americans in the bottom half of the income distribution are more likely to have jobs in manual labor, which is more physically difficult for older people to perform. White-collar workers in the upper bracket don’t face the same physical demands. And their greater earnings mean they should be able to save more to support themselves longer.
Graduated eligibility should be based on lifetime earnings instead of any particular year’s income, which can be quite volatile. It would be administratively simple to determine each citizen’s lifetime earnings, because the Social Security Administration already has all this data. And this measure would have the benefit of encouraging personal responsibility; people making more than the median income would have an incentive to save. Anyone who earned a lot at one time but frittered it away would have to continue working longer.
Either in the lame duck Congressional session after the election or in 2013, there will surely be debate about a deal to address taxes and the deficit. Graduated eligibility should be on the table. It would not completely close the shortfall of the trust funds, but it would put Social Security and Medicare on a stronger financial footing, while reaffirming their universal nature and reflecting the fortunate fact that Americans are living longer.
- Entitlement Reform For the Entitled (opinionator.blogs.nytimes.com)
- Ezekiel Emmanuel Doesn’t Like Social Security and Medicare (businessinsider.com)
- The Ryan Budget Avoids Hard Choices – Room for Debate – NYTimes.com (mbcalyn.com)
- Trustees say Medicare, Social Security funds running out quickly – The Hill’s Healthwatch (mbcalyn.com)
- Meet Pete Peterson, Architect of Social Security and Medicare Cuts (crooksandliars.com)
- Go Online to Read Social Security Statements, But Do So Carefully, Allsup Says (prweb.com)
- Social Security and You: Help with prescription expenses (mysanantonio.com)
- Check Your Future Social Security Payouts With New Online Tool | The Exchange – Yahoo! Finance (lennyesq.wordpress.com)
- That Which is Unsustainable Will Go Away: Medicare (businessinsider.com)
- Take Time for 3-Step Benefits Checkup (money.usnews.com)
- “Can you fix my Windows 95 computer?”: How to troll a tech support scammer | Ars Technica
- Layer 8: Hypersonic test aircraft pealed apart after 3 minutes of sustained Mach 20 speed
- Teen's invention could charge your phone in 20 seconds - NBC News.com
- Measuring Poverty
- Congressman Who Gets Millions In Farm Subsidies Denounces Food Stamps As Stealing 'Other People's Money' | ThinkProgress
- Joke of the Day
- Graduation and the Job Market
- A Comparison of The Great Depression and The Great Recession | Scoop News
- Did someone say "Scandal" ?!