Wednesday, June 22, 2022

Sid Salter: The Uncertain Future of Social Security Program

 Stop the presses: Democrats and Republicans disagree over the future of what used to be called “the third rail” of American politics – the Social Security program. Water is also wet…

But in assessing Social Security, there is a very short-term fiscal cliff approaching that does not allow the usual partisan wrangling to continue to manifest itself in gridlock and inaction,

 

In 2020, Social Security provided retirement, disability and survivor benefits to some 416,500 Mississippians with monthly benefits averaging $1,420 per month or $17,161 annually. That means that Social Security injects $7.147 billion into Mississippi’s economy — more than the state-funded portion of the state budget.

 

The Social Security Trustees Report projects that the 86-year-old program can only meet its obligations to retirees until 2035 — after which Congress must either shore up the program’s finances or see benefit reductions of between 21% to 27%.

 

Those dire numbers were posted before $5-per-gallon gas prices became a national reality and inflation soared to north of 8.6% - impacting the price of everything including food, fuel, and health care. Prescription drug prices are up 35% since 2014 and up 2.5% since the beginning of the Covid-19 pandemic.

 

One simple set of facts bodes ominously for Social Security and Medicare and government officials seeking to solve these challenges. Doing nothing is neither a strategy nor an option.

 

First, Social Security and Medicare constitute north of 41% of all federal expenditures. Second, the senior demographic of those eligible for the programs are growing and science is helping them live longer. Third, in 1950 there were 120 workers paying into the program for every one retired worker drawing a pension. By 2035, it is projected that there will be only 2.3 workers paying into the program for each retiree drawing a pension.

 

So, what are the current alternatives on the table? Vermont Independent U.S. Sen. Bernie Sanders, along with more than 15 Democratic co-sponsors that include Massachusetts Democratic U.S. Sen. Elizabeth Warren, recently introduced the Social Security Expansion Act which claims it would extend program solvency for 75 years and increase benefits by $2,400 a year by removing the present income “cap” on current program funding rules.

 

SmartAsset.com financial analyst Christine Williams points out: “Taxable Social Security earnings are currently capped at $147,000 for the year, but this new legislation could tap individuals earning more than $250,000 and subject them to a further 6.2% in payroll taxes. The bill additionally proposes increased taxes on investors and businesses.”

 

Sanders offered this assessment to financial journalist Brian Anderson on June 17: “Our job must be to expand Social Security so that every senior citizen in America can retire with the dignity they deserve and every person with a disability can live with the security they need. And we will do that by demanding that the wealthiest people in America finally pay their fair share of taxes.

 

“It is absurd that a billionaire in America today pays the same amount of Social Security taxes as someone making $147,000 a year. It is time to scrap the cap, expand benefits, and fully fund Social Security. I am very proud that the Social Security Administration has estimated that our legislation to expand Social Security benefits by $2,400 a year will fully fund Social Security for the next 75 years by applying the payroll tax on all income—including capital gains—above $250,000 a year,” Sander said.

 

Republican U.S. Sen Mitt Romney, R-Utah, responded by saying the proposal had “no chance whatsoever of receiving a single Republican vote in either House.

 

GOP U.S. Sen. Lindsey Graham, R- South Carolina, was more pointed in his reaction to Sanders: “To get out of this mess, people like me are going to have to take a little less and pay a little more in. We’re going to have to adjust the age one more time like Ronald Reagan and Tip O’Neil did. There is a bipartisan way forward, but you describe problems which your answer is always the government. It’s always socialism.”

 

Will Congress scrap the income cap to raise money while raising the retirement age to save money – or will it be a more Draconian plan? What’s sure is that change is coming sooner than later.


Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com

35 comments:

Anonymous said...

Nothing in life is guaranteed.
There is no guarantee that the current US Government will even survive this century.

Anonymous said...

“Social Security”. A plan implemented by FDR who idolized Joe Stalin. It’s a farce and basically a ponzie scheme in my opinion. Most of you won’t agree with that but, there have been many people denied payments yet there have been some who have been rewarded and not worthy of anything to do that. Just my opinion. It’s like Union Dues. You pay in for a group to make a living off of your dues and get very little in return. Labor Unions are Socialist/Communist in their beginnings also so far an American to join one doesn’t make sense but most say it’s to keep “the man” straight. Getting back to Social Security, I know some people really depend on it in their older years and that’s understandable but to let the government “use” it to operate off of is senseless. This was a “socialist” ideology that was bound to run out sooner or later and some of us have realized we will never see the money at all.

Anonymous said...

Who needs Social Security when you have PERS and the 13th check.

Anonymous said...

It’s amazing how entitlement programs, such as welfare, foreign aid, all the pork programs NEVER seem to be on the brink of going broke!!! However, something we have paid into that was supposedly earmarked for us is always going broke!

Anonymous said...

I'll be checked out by 2035. Good luck to the rest of Ya'll.

Anonymous said...


What’s sure is that change is coming sooner than later.

No changes will be made to PERS until it stands on the brink.

Trim smartly now or accept the total butch cut later.

That is your choice retirees.

Anonymous said...

The business lobbying to fight the “cap” will be intense. The solution to funding social security and Medicare could be to NOT require businesses to match the 6.2% increase and to remove the “cap” on all income. So…there is no increase cost to businesses, and individuals who earn more than $147,000 will never miss the added tax. Just saying…

Anonymous said...

The money is needed for Ukraine and for the many corrupt programs that the dems and RINOs are creating.

Anonymous said...

Nothing to do with this article,but I just read the Clarion ledger for the first time in a while. The visit MS article just makes me wonder(mad) if we will ever again see any newsprint publish the truth about what us really going on. “Jackson is a premier destination”
Implies the convention center is doing well . All is great the capital city. As always nothing to back any of this up no investigating if any of this is true just print away…

Anonymous said...

Scrap the whole thing and cut a prorated check to everyone who paid in.

Anonymous said...

Social Security will be a sacrificial lamb to the extreme party politics we now have unless we come to our senses, and soon. Both sides insist on catering to their own far-right or far-left loyalists who don't care if the country falls to hell as long as the other guy is defeated. There MUST be changes to increase social security funding while at the same time making it more streamlined and efficient. Some can give more and some can take less. That's a fact, we should deal with it, but before anyone compromises, we'll overwhelm the system so we can blame our opponents. In times past the country put differences aside and came together in times of war. We had better realize that the economic issues we face in the near future are the equivalent of war.

Anonymous said...

It all started when the crooked self-service bastards in WDC tapped into the Social Security TRUST FUND to balance the budget so they looked good. Most of those crooks are now retired living on our dime.

Anonymous said...

Changing the age as our life expectancy drops is a very bad idea.

Raising the cap is also ridiculous. Those who make 150000 will need that cap as for many their earnings will plateau.

I wish there would be a major tax reform so I wouldn't have to pay for every housekeeper,groundskeeper, round of golf, house payment and furniture , automobile and it's maintenance and gas of every CEO and his upper management. There's a reason Elon Musk pays less than 1% income. He personal paycheck is deliberately small.

There needs until then to be a different scale entirely for those making over $1 million a year in profit AND/OR income. They should pay in at a higher rate not receive a cap until they retire or sell their business/corporation/partnership. At that point, there would be a 1 time payment on any bonuses.

We ought to be united in demanding those we elect to stop legalizing what once was a crime and to criminalize tailoring laws to enrich their deep pocket donors and themselves.

Worse now, is these fools thought they could control and continue to control their " crazies" as they know they are dumb,gullible or as corrupt as they are. They really haven't studied the part about who is executed after coups or revolutions. They eat their young and old.






Anonymous said...

Or, you can supplement income the way they do in Canton. Take it from CMU, and pay related people premiums on non existent “tornado” insurance policies. Also, request fraudulent mileage reimbursement

Anonymous said...

@9:27am - Thanks for stopping by Tucker.

Anonymous said...

"Franklin Roosevelt idolized Joseph Stalin"

Where do you people come up with this shit?

Unknown said...

8:36 FDR did not idolize Stalin. Your statement is idiotic.

9:26 Interesting proposal, except I don't see any reason to limit a business's contribution. If they think a person is worth a salary of $10 million a year they also think that person is worth $10.62 million per year.

The problem with Sanders proposal is including capital gains.

Anonymous said...

Q: "Who needs Social Security when you have PERS and the 13th check.

June 22, 2022 at 8:43 AM"

A: Everybody who paid SS taxes and lived long enough to qualify for benefits.

If you think people shouldn't be able to collect SS plus some other retirement, then don't tax them the SS premiums.

Anonymous said...

Now who could have possibly seen that coming. Gather a bunch of money together for a certain reason then let politicians dip their hands in the cookie jar and it goes broke. Surprise Surprise Surprise

Who's the RINO? said...

Is Sid now on Michael Guest's persona non grata shit list since he's touting Bernie Sanders?

Real conservatives Michael want to know.

Anonymous said...

"Who needs Social Security when you have PERS and the 13th check."

Some retirees will need both.

Especially considering the ones that were in the annual $29k to $36k range.

Their PERS retirement check will not be much. They will definitely need the help of social security

Anonymous said...

There's been too many people for a long time now... the purge will continue.

Anonymous said...

Many people are collecting social security checks that never paid a cent in to the fund. That needs to stop immediately.

Anonymous said...

If you really believe there are too many people, you can always volunteer to take one for the team. Now, how strong do you believe it?

Anonymous said...

12:36
https://www.aarp.org/retirement/social-security/questions-answers/collecting-benefits-without-paying-into-social-security.html

Anonymous said...

Seeing that Salters has never had a REAL job...his opinion is worthless.

Anonymous said...

FDR actually got the idea for a national pension fund from my uncle Upton Sinclair, not Joseph Stalin. Sinclair proposed creating a pension fund for Californians as part of his candidacy for governor in 1934. FDR commandeered the idea and pushed a national SS program through congress that same year. Sinclair was a true socialist as well as a muckraking journalist. He almost won the election. Some say he would have won if he hadn’t deferred his pension idea to FDR.

Anonymous said...

It is indeed absurd that there's a cap on contributions (earnings) and nobody, NOBODY, has ever bothered to explain that.

Meanwhile, Sid has nothing to worry about as long as MSU allows him to benefit from the PERS teat.

Anonymous said...

Heraldo Gibbert on Super-Squawk claims it's a lie that congress taps the SS fund for other purposes. He's unfamiliar with Kennedy and Moynihan.

Anonymous said...

"It is indeed absurd that there's a cap on contributions (earnings) and nobody, NOBODY, has ever bothered to explain that. "

They explained it when it was started. There is a cap on how much you can receive from SS, so it is only fair there is a cap on how much you can be forced to put into the program. The wealthy put far more into the program than they will likely receive, and most people get out much more than they put in, especially when you compare 2022 payments to what they put in when they started working 50 to75 years ago.

Anonymous said...

As other’s have said. This “article” is mighty rich coming from a man who’s never done an honest days work his entire life.

Anonymous said...

@2:47 PM, Pimpin’ ain’t easy.

Anonymous said...

I saw my Dad, who worked as a self employed professional engineer to age 96 (Ninety-Six) pay taxes on his social security "benefits" as they were considered part of his taxable income for what, 31 years?

I lost a sister to cancer at age 70. She got 5 years worth of her lifetime "benefits".

I lost another sister to cancer 2 months after she became 62. She never received a DIME of her "benefits". Poof. Gone. All that was stashed away by Uncle Sam FOR her later on, gone. Used to "benefit" somebody else.

I've got just a few more years til I'm 62. You can bet I'll be singing like Janice Joplin IF I make it to my 62nd birthday. "Get it while you can, honey, get it while you can". IF I live to be 67 1/2 and regret the reduction I took, so be it. At least I got me somes.....

Anonymous said...

The 13th check is a 3% COLA. Some years it’s above the rate of inflation and other years it’s not. Inflation was over 8% this past year which is not close to covering last years 3% COLA.

Anonymous said...

The article left out a very key component. It mentions that social security is currently only deducted on wages up to $147,000. This is true. It also mentions that Bernie Sanders and Elizabeth Warren want to make high earners "pay their fair share" by deducting social security on all wages. So if you make $400,000, you would have social security deductions based upon $400,000, not $147,000. There is some potential merit to this.

What the article DOESN'T MENTION is that when social security benefits are calculated using past salary data, it also currently uses $147,000 as an income cap. That keeps someone who made millions annually from drawing an enormous amount of social security. So my point being, high wage earners are not 'beating the system" or "avoiding paying their fair share". When they finally retire and can draw benefits, their past annual earnings used for calculation of benefits will never be more than $147,000 annually. So they are only drawing benefits based upon what they paid in.


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