Social Security under siege
Published November 16, 2015
by Dr. Ada Fisher, Republican National Committeewoman, published in Salisbury Post, November 15, 2015.
The political debates are totally dishonest in regard to Social Security. Ponzi scheme or not, the problem is the funds were moved from a private account to the general Treasury during the Lyndon B. Johnson Administration, thereby allowing them to be tapped without transparency for everything — from the Vietnam War to educational program funding to pork barrel mysteries. As such, IOUs were reportedly given the Treasury for citizen retirement supplemental monies while spend-hungry congressmen never intended repayment of this debt.
First, Social Security should be maintained in that elusive “Lock Box” discussed by then-candidate Al Gore with no access by the Treasury to its bounty except future payment of recipients. As such, 5 percent of the monies due the fund should be required as an annual repayment from the Treasury over the next 20 years minimally until the debt is repaid with interest. Current recipients should be paid from the Treasury until the Social Security fund is fully restored in a separate account. Doing this is the only way for the public to get their money as well as truly appreciate the national debt, which could then likely top a staggering $50 trillion.
Second, Social Security is the one benefit that is doubly taxed. The money owed is based on the tax value of personal income. Then it is taxed again at withdrawal. All taxes should be removed from Social Security after the initial investment. It is not the poor who pay disproportionately but Social Security investors. What we are doing, if continued, is like repeatedly robbing the bank in allowing the government to take out money which is yours whenever and for whatever it wants.
Third, many people are getting benefits for which no buy-in occurred, e.g. family members can receive benefits if they are under-aged children or widows, yet no extra monies were put in by the enrollees for them. Social Security after 2020 should require for new investors that only those who put into the system can withdraw from it. Supplemental monies are required to cover those other than the investor.
Fourth, the Totalization Agreement with Mexico allows Social Security funds collected from illegal aliens (which is over $1 billion per year) to be given to that government. These monies should be placed in the Social Security Trust Fund for appropriate use, which might include compensation to states with illegal populations exceeding 10 percent.
Fifth, progressively raising the retirement age to 67 — as advocated by Paul Ryan’s previous “Pathway to Prosperity” and other politicians on both sides of the aisle — is certain to rob the poor and give to those of modest means and the rich. Appreciating that the average age of death for black males is around 70 though their life expectancy is only 75.9 years of age, increasing the time one is required to work and delaying compensation as age advances is almost certain to see too many die before they can appreciate any savings from their money. This is not fair.
Lastly, the system of investment and withdrawal for retirement could be boosted by measures which are fairer. George W. Bush proposed letting people pay an additional amount into Social Security for their savings, e.g. 10 percent. This should also be made tax free like a Roth Account. If recipients die before monies invested are paid out, then their beneficiaries should have a right of inheritance. Pension reform is also desperately needed to insure that they are funded to the 80 percent level. Those who invest for retirement should not be penalized in having their Social Security withheld, for it is their money taken with no such requirement assumed.
The Office of Management and Budget has dire projections on entitlements, noting that by 2027 half of all federal revenue will go to paying down interest on the national debt (not touching the principle) and the other half will be allocated to entitlements. All debates should focus on where cuts should be made and why, how to right government programs such that self-sustainability rules with accountability and the need for government grants to show within three years they can operate autonomously. All this while protecting the nation’s security. Can we get real please?
November 17, 2015 at 10:56 am
Richard L Bunce says:
First the OASI and DI funds from the excess payments of OASI and DI payroll taxes are kept in the only manner the government can store revenue, as government bonds, in this case special treasury bonds that by law can only be spent on OASI or DI benefits (recently changed that or to and). Yes those bonds are purchased from the US Treasury and the US Treasury pays them back with interest when cashed by SSA to pay benefits.
Second yes OASI and DI benefits, as all government benefits, should probably be untaxed. Making them taxable increases the progressivity of the OASI benefit based on current revenue instead of past revenue that determines the initial OASI benefit. I would actually prefer that the OASI benefit be changed to be a standard benefit ( say 120% of poverty) where every beneficiary gets the same amount (as Medicare provides the same benefit to those enrolled in Traditional Medicare Part A no matter how much they paid in HI taxes in their lives). Then I would also eliminate the OASI payroll tax and fund from general revenue.
Our current OASI system taxes the first dollar earned/paid by the lowest wage employee/least profitable employer and provides the largest OASI benefits to the wealthiest beneficiary while leaving ~10% of beneficiaries living in poverty including any additional SSI payments. The system changes I propose does not make the poor poorer or least profitable businesses less profitable while lifting all OASI beneficiaries out of poverty.
For those who would argue that a standard OASI benefit would cost the program support with public I again point to Traditional Medicare which does exactly that... there is no Gold Medicare Plan for historically high wage beneficiaries and a Bronze Medicare Plan for historically low wage beneficiaries... and the Medicare program has plenty of support.
