I have seen a number of articles today claiming that Social Security is safe from Trump because no one has the political will to cut benefits or that there will be little action on Social Security in the immediate future. These articles lead me to suspect that the authors don’t know how the system works.
In the absence of action on Social Security, when the trust fund is depleted and income from the payroll tax falls below notional benefits, benefits will cut themselves. That’s not a prescription, that’s just how the system is designed.
Is the assumption that politicians, fearing for their jobs, will pay promised benefits from the general fund?
Yes. Or increase taxes for non-retirees.
Look at the reform in 1983(?).
Unfortunately, whenever SS “reform†is brought up the knee-jerk response, by any opposition party, is to howl that these are attempts to destroy it. Sustainability seems to be treated as an irrational motive.
Another alternative, CuriousOnlooker, is to make more income subject to the tax. Social Security’s greatest design problem is that it assumes a much higher proportion of income is subject to the tax than is presently the case.
“Social Security is safe from Trump because no one has the political will to cut benefits or that there will be little action on Social Security in the immediate future.”
I think the above is true. Old people favor Trump so he won’t address it. The authors may or may not understand how SS works, but if they believe the above they are probably correct.
Steve
“Is t he assumption that politicians, fearing for their jobs, will pay promised benefits from the general fund?”
LOL Of course they will.
SS has been structurally unsound from the beginning. The proposed solutions are just cleverly marketed band aids. Any program can be saved when the proposed solution is just send them more money. Of course, that’s the moron solution.
I think abolishing the income limit was already proposed by one of the Democratic candidates.
Subjecting non-wage income to social security taxes is another way.
Given the range of possible actions, it is pretty clear social security benefits won’t be cut.
They’ll just appropriate the money. That’s what they do with everything else, why should SS be any different?
“Safe FROM Trump�
Who suggested otherwise?
That is how it is being phrased in the articles.
Articles are more political invective.
SS benefits will not be cut. The difference between the FICA tax revenue and the benefits will come out of general funds or by some sort of reform that does not affect the great majority of workers.
Of course, that means there will be either large increases in the annual deficit (most likely) or substantial reductions in everything else, especially the military. The Democrat candidates have already indicated the military will be cut, so if one is elected in the fall (increasingly unlikely) the troops will finally come home.
Fixing SS should start by removing all those beneficiaries who never worked and who never paid a cent of FICA. As it is now, there are all kinds of indolents who qualify for benefits, from the disabled to the ex-spouses of contributing workers, whether widowed or divorced from them.
Example: A Mormon working man’s contributions can be the basis for SS benefits going to his wife and up to 4 “sister-wives” at the same time, as well as to all his minor and even some adult children upon his death or their reaching retirement age. He just needs to arrange to have been married to each of the many wives for 10-years.
There is no longer any excuse to extend SS benefits to indolent spouses of contributors, now that even women can find jobs and pay into the system like everyone else.