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Fri Nov 16, 2012, 08:29 PM

Dem Senator Introduces Bill To Lift Social Security’s Tax Cap, Extend Its Solvency For Decades

Thoughts?

http://thinkprogress.org/economy/2012/11/16/1208701/democratic-senator-introduces-bill-to-lift-social-securitys-tax-cap-extend-its-solvency-for-decades/

Democratic Senator Introduces Bill To Lift Social Security’s Tax Cap, Extend Its Solvency For Decades

By Jeff Spross on Nov 16, 2012 at 5:15 pm


Democratic Senator Mark Begich of AlaskaSocial Security, the government entitlement that provides support to seniors in retirement, the disabled, and other Americans, has long been in the cross-hairs of budget reformers. The program’s trust fund currently won’t be spent out until 2033, and after that it would still pay 75 percent of scheduled benefits.

Most of the proposed solutions to the shortfall involve cutting back benefits and raising the minimum retirement age. Both are deeply problematic; at its current level of benefits Social Security kept over 20 million people out of poverty in 2011, many Americans in demanding manual labor jobs already take early retirement and thus reduced benefits as it is, and lower-income Americans have not particularly benefited from the average rise in lifespans .

This week, however, Sen. Mark Begich (D-AK) put forward a reform package that goes in the opposite direction, while still financially securing the program’s trust fund for roughly the next seven decades. The Washington Post’s Dylan Matthews laid out the details:

The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap.

It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy.

Due to deteriorated health and other considerations, goods seniors buy tend to be more expensive than those younger people purchase. Begich’s CPI-E change would mean, effectively, a 4.5 percent benefit increase for the program’s beneficiaries, including not just seniors but their designated survivors and disabled Americans as well.


The Congressional Research Service ran the numbers back in 2010 and concluded that eliminating the payroll tax cap — while also paying out the new benefits to wealthier Americans in accordance with their new taxes — would eliminate 95 percent of the trust fund’s shortfall over the next 75 years.

Begich may not hit that goal exactly, depending on how the legislation is written. In particular, his change to CPI-E also lifts the overall benefit level, on top of the changes in CRS’ scenario. But his reform would probably come very close.

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Arrow 27 replies Author Time Post
Reply Dem Senator Introduces Bill To Lift Social Security’s Tax Cap, Extend Its Solvency For Decades (Original post)
babylonsister Nov 2012 OP
still_one Nov 2012 #1
freshwest Nov 2012 #15
redwitch Nov 2012 #2
haikugal Nov 2012 #3
rocktivity Nov 2012 #4
Lugnut Nov 2012 #5
Blue_In_AK Nov 2012 #6
MannyGoldstein Nov 2012 #7
hootinholler Nov 2012 #11
MH1 Nov 2012 #8
forestpath Nov 2012 #9
kentuck Nov 2012 #10
Egalitarian Thug Nov 2012 #14
Cleita Nov 2012 #12
Auntie Bush Nov 2012 #13
patrice Nov 2012 #16
Politicub Nov 2012 #17
1ProudAtheist Nov 2012 #18
CrispyQ Nov 2012 #25
JeffHead Nov 2012 #19
Zorra Nov 2012 #20
mick063 Nov 2012 #21
DreamGypsy Nov 2012 #22
Brainstormy Nov 2012 #23
ReRe Nov 2012 #24
jwirr Nov 2012 #26
Doctor_J Nov 2012 #27

Response to babylonsister (Original post)

Fri Nov 16, 2012, 08:31 PM

1. That is the solution

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Response to still_one (Reply #1)

Fri Nov 16, 2012, 09:53 PM

15. It is the progressive solution Obama and Sanders support.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 08:32 PM

2. It's about time. nt

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 08:34 PM

3. Absolutely...lift the cap!

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 08:49 PM

4. Best of all, EVERYONE could pay a LOWER rate!

Cue the Vonage theme!


rocktivity

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 08:49 PM

5. I'm glad to read this.

Especially this sentence.

"It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy."

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:02 PM

6. Way to go, Mark!

So much of the time he acts like Lisa Murkowski's lapdog. It's nice to see him propose something on his own that makes so much sense.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:03 PM

7. Not sensible at all.

doesn't he realize that Democrats can only bipartisan when cutting Social Security benefits, not raising them?

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Response to MannyGoldstein (Reply #7)

Fri Nov 16, 2012, 09:35 PM

11. Well on the bright side the vomit will taste better

Maybe this will get it off the table.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:11 PM

8. It's so friggin' obvious and simple

that I hold little hope of it being passed, sigh.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:28 PM

9. Their votes on this will shine a spotlight on their TRUE intentions and finally put an end to

 

all those fake-smile evasive answers I see from so many congresspeople on MSNBC (other than Bernie Sanders, that is - him I completely trust on SS).

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:32 PM

10. if Repubs were smart....

This is something they would sponsor...

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Response to kentuck (Reply #10)

Fri Nov 16, 2012, 09:44 PM

14. If history is any indication they very well may. This sticks with the established script of

 

Democrats allowing republicans to take a good Democratic idea and twisting into a foul parody that the Democrats can then point to and say, "see, it was a bad idea all along".

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:39 PM

12. It is the solution, but we still are going to be fighting for it.

This Congress will not pass it. Maybe the next one will.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 09:39 PM

13. Simplier way is to just lift the cap as needed to keep it solvent.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 10:37 PM

16. Anyone who loves this country can see how this will be good, a solid permanent good, for the USA. nt

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 10:41 PM

17. 70 more years and no cutting of benefits

Seems like an open and shut case to me.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:05 PM

18. Allow SS and Medicare Taxes

 

on dividend income and capital gains. Those who have that type of income get to use it to qualify for benefits, yet do not pay any SS or Medicare taxes on it. That alone should secure SS for the next several hundred years.

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Response to 1ProudAtheist (Reply #18)

Sat Nov 17, 2012, 02:46 PM

25. This.

Tax investment income like labor.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:09 PM

19. Republicans will never go for this....

Because it makes too much fucking sense!

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:14 PM

20. This is a progressive solution. Let's trash the corporatist Third Way approach of screwing workers

with the "Grand Bargain" "Grand Illusion" once and for all.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:14 PM

21. The plutocracy despises this with every fiber of their being.

 

There is no kingdom to rule without serfs.



Pass the damn thing now!!!!!!

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:15 PM

22. Here's Oregon Representative Pete Difazio speaking about removing the payroll tax cap...




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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:30 PM

23. Bingo!

This is the answer. Has been all along.

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Response to babylonsister (Original post)

Fri Nov 16, 2012, 11:37 PM

24. Change is in the air....

K&R

....has anyone noticed? I'm usually a pessimist, but something is different up there since the election. And I like it. It just seems like something is thawing, unassociated with climate change. I think Sen Begich's bill might pass!

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Response to babylonsister (Original post)

Sat Nov 17, 2012, 03:46 PM

26. This is very good news and if they cannot get it through this session I hope they continue to push

it.

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Response to babylonsister (Original post)

Sat Nov 17, 2012, 07:56 PM

27. Some other "Dems" would rather raise the eligibility age

Apparently Melissa Harris Perry is floating a trial balloon, likely from the WH, that we should instead make people work until age 67. I sure am glad the Dems are on my side.

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