Obama's Next Cave In To GOP: Cuts In Social Security Coming (dollars, economic)

[HappyTexan]

People PAY into social security.

Cut the welfare entitlements first on those that do not pay into the system.

[HappyTexan]

Originally Posted by pghquest

the problem with this argument is that SS isnt hurting at all. The SS trust fund is sitting on tens of trillions worth of US Treasuries. If there runs a period of time that the Social Security runs a deficit, they simply cash in some of these trillions of IOU's..

Politicians of course dont want that because they see the SS as a "tax", not as some fund that ever needs to be paid back.

Actually no they don't..they borrow from the Fed.
SS has been running in the red more months than not in the past 2 years and has had to borrow from the Fed to make payments.
Those months that had a surplus immediately went to pay "other" government expenses and was not saved.

It's a nasty game they are playing up there in DC. They now NEED SS revenue to pay their general expenses.

In 15 of Last 25 Months, Treasury Needed to Borrow Money to Pay Social Security Benefits | CNSnews.com
"The U.S. Treasury has needed to borrow money to pay Social Security benefits in 15 out of the last 25 months on record because the Social Security system was in deficit in those months, with the cost of monthly benefit payments exceeding the Social Security tax revenues flowing into the Old Age, Survivors and Disability Insurance "trust funds," according to data published by the Social Security Administration."

[C.C]

Originally Posted by HappyTexan

People PAY into social security.

Cut the welfare entitlements first on those that do not pay into the system.

Exactly! Why on earth are we expanding medicaid and creating a new obamacare entitlement if we can't afford SS and Medicare, which are at least partially self-supporting???

[pghquest]

Originally Posted by HappyTexan

Actually no they don't..they borrow from the Fed.
SS has been running in the red more months than not in the past 2 years and has had to borrow from the Fed to make payments.
Those months that had a surplus immediately went to pay "other" government expenses and was not saved.

It's a nasty game they are playing up there in DC. They now NEED SS revenue to pay their general expenses.

In 15 of Last 25 Months, Treasury Needed to Borrow Money to Pay Social Security Benefits | CNSnews.com
"The U.S. Treasury has needed to borrow money to pay Social Security benefits in 15 out of the last 25 months on record because the Social Security system was in deficit in those months, with the cost of monthly benefit payments exceeding the Social Security tax revenues flowing into the Old Age, Survivors and Disability Insurance "trust funds," according to data published by the Social Security Administration."

Trustees Report Summary

The Department of the Treasury currently invests all program revenues in special non-marketable securities of the U.S. Government on which a market rate of interest is credited. The trust funds represent the accumulated value, including interest, of all prior program annual surpluses and deficits, and provide automatic authority to pay benefits.

The fact that they currently are running in the red, doesnt mean the trillions in US Treasuries previously purchased disappear.. And the fact that they borrowed money to pay benefits instead of just cashing in these trust funds indicates how screwed up the government and this whole notion about SS being "safe" is. Its just a shell game which should have many americans concerned about their imaginary retirement fund

[C.C]

Originally Posted by pghquest

Trustees Report Summary

The Department of the Treasury currently invests all program revenues in special non-marketable securities of the U.S. Government on which a market rate of interest is credited. The trust funds represent the accumulated value, including interest, of all prior program annual surpluses and deficits, and provide automatic authority to pay benefits.

The fact that they currently are running in the red, doesnt mean the trillions in US Treasuries previously purchased disappear.. And the fact that they borrowed money to pay benefits instead of just cashing in these trust funds indicates how screwed up the government and this whole notion about SS being "safe" is. Its just a shell game which should have many americans concerned about their imaginary retirement fund

Of course any shortfall in a given month has to be covered by borrowed money - that's the only kind of money the govt has.

But the fact that the money itself is borrowed doesn't mean that the trust fund account balances aren't adjusted to reflect the shortfall, just as they are adjusted when surpluses occur.

[TnHilltopper]

I'm guessing Obama is planning on running as the GOP candidate in 2012?

[HappyTexan]

Originally Posted by pghquest

Trustees Report Summary

The Department of the Treasury currently invests all program revenues in special non-marketable securities of the U.S. Government on which a market rate of interest is credited. The trust funds represent the accumulated value, including interest, of all prior program annual surpluses and deficits, and provide automatic authority to pay benefits.

The fact that they currently are running in the red, doesnt mean the trillions in US Treasuries previously purchased disappear.. And the fact that they borrowed money to pay benefits instead of just cashing in these trust funds indicates how screwed up the government and this whole notion about SS being "safe" is. Its just a shell game which should have many americans concerned about their imaginary retirement fund

Because Treasuries are IOU's.

If I write myself an IOU and then need money how do I cash my IOU in to myself when I have no cash ????

The Treasury has no cash; they get it from the Fed, hence the borrowing.
Expand beyond government reports to fully understand the government reports if you know what I mean.

[Mircea]

Originally Posted by padcrasher

1 Raising the retirement age to 69 represent a 15% cut in benefits.

That's a deceitful and disingenuous argument.

Raising the retirement age to 69 has no effect on any person living in the US now.

If the retirement age would be raised, it would be for those born after the legislation was enacted, for example, all those born on or after January 1, 2012 assuming the law was in enacted in 2011.

Originally Posted by Memphis1979

I have no problem with a slight raise in payroll tax for social security AND raising the retirement age to 70.

I have a problem with that. Before your raise the Social Security Tax, you ought to raise the cap.

I believe the current cap is $106,000.

For those who don't get it, that means if you earn $200,000 per year, you pay Social Security tax on the fist $106,000 and you pay ZERO% on the remaining $94,000.

If you earn $500,000 per year, you pay Social Security tax on the first $106,000 and ZERO% on the remaining $394,000

There is no reason why the cap cannot be eliminated, but I would recommend scaling the tax.

Reduce the cap to the first $100,000 then tax the next $100,000 at 3% or something and and then everything over that at 1%.

And raising the retirement age to 70? Are you kidding? I'd like to see you humping bags of cement.

Just because Americans are living longer, doesn't mean they can actually work longer, that is a huge difference.

Originally Posted by Wapasha

Expenses for the Social Security program will exceed tax receipts beginning in 2016.

That isn't entirely true.

Social Security failed here recently. It paid out more than it took in due to the economic down-turn, so all it takes is an economic down-turn to reach a point where it isn't solvent.

Originally Posted by Recovering Democrat

Entitlements in general - and Social Security in particular - have been the 3rd rail in Washington for decades. Both parties have known that the chickens would eventually come home to roost.

Well, today is the day. Benefits paid to SS recipients ALREADY exceed receipts. Let me say that again: Benefits paid to SS recipients ALREADY exceed receipts.

Sorry to rain on your parade, but I didn't get to your post until now, but you're right, benefit payments have already exceed receipts.

Originally Posted by pghquest

The problem with this is Social Security is flush with assets. They are sitting on tens of trillions in US Treauries.. Its just the the us government never wants to pay back these funds which is why they are making the adjustments.

I just knew this was going to come up.

Yes, the surplus Social Security taxes were for years spent faster than Congress could spend them and we have IOUs.

How do you suppose you convert the IOUs to cash to pay out benefits?

Raise taxes.

[HappyTexan]

And yet they CUT payroll taxes for next year.

[HappyTexan]

Originally Posted by Mircea

How do you suppose you convert the IOUs to cash to pay out benefits?

Raise taxes.

Or in the case of our government..borrow from the Fed and pile on MORE IOUs.