Should Dems be thoughtfully considering broaching means testing for Social Security eligibility?

[Texin]

I'm not trying to be stupid here, but a few years back I worked for a couple of guys (they were the company's co-owners) who both turned 65 at about the same time, both making well in excess of a million dollars, and each one nearly broke their legs trying to get down to the Social Security offices to sign up for SS and Medicare.

I've met a lot of folks of retirement age who have millions and millions of dollars in the banks and brokerage accounts that don't need this pittance that doesn't amount to much more than a tiny dividend payment, but I've never met a one who was willing to have anyone pry it out of their claws. Since the owners of the company I worked for were actually - working - they were still paying taxes on their incomes, but there are many folks who aren't working. Maybe I'm being hardnosed about this, as most of these people did work, pay into the system, and are "entitled" to the retirement benefits, but should someone who can afford to support onself with the sums they've amassed throughout the years really be doled out benefits when they could be put back into the pool for other retired seniors thereby extending it's longevity?

[Jackpine Radical]

1. Means testing is a pretty sure route to killing SS.

If the rich have no stake in it, they'll come for it. You won't like the result.

[NoMoreWarNow]

62. yep-- that's how the argument goes

and it makes sense

[avedon]

64. Means testing is also an expensive administrative nightmare.

There is a reason why they figured out a long time ago that giving medical care away free to everyone is cheaper than means-testing.

[PDJane]

2. Yes. And raise the cap.

[bluestateguy]

3. If that is what it takes to shut down any conversation of raising the retirement age, then yes

But only if the retirement age stays.

Fact is, rich people, who live longer, take more from Medicare than poorer folks who do not live for as long. So a cautious approach to some kind of means testing is a fair conversation to have.

[AnotherMcIntosh]

4. No. Not unless you want to further the process of privatizing and killing SS.

[kimbutgar]

5. I know an extremely rich guy who collects social security and Medicare

He owns several homes all over the us and a winery in a south American country. Staunch republican, big rmoney supporter, hates o'bummer as says why should I pay taxes for some deadbeat's healthcare. He has no business getting social security or Medicare. He has more money then he'll ever need in life. It's totally disgusting to me how he mocks poor people and minorities.
So I have no problem with means testing. He joked he used his one month social security check to buy an expensive wine. I told him that some people live on those checks he said they are losers and deadbeats because he worked hard and they should have also. Of course being a white male in New York in the 70's and getting into wall street before the boom of MBA types he was lucky.

[Texin]

8. And your example typifies what I was talking about.

My husband is a CPA here in the Dallas, TX area, and his clients for the most part are all staunch Rethugs - most of them of the Teabagger ilk, though they'd be loathe to say so. Most all of them have beaucoup de bucks. In the bank accounts, private retirement acounts, brokerage, etc. Some of them are aging trust fund babies to boot. They all avail themselves to Social Security, and most of them take advantage of Medicare too. Most worked and contributed to the system, and they don't need the benefits, but they are first to sneer at the middle class and working poor who do. They are also first on the list of people who agree that gutting and getting rid of Social Security and Medicare is a winning play. They'd be tickled to death that the 68-year old housekeeper who cleans their toilets not see a dime of SS or Medicare, and thereby be forced to live with his kids, grandkids, under a bridge or in the basement of the damn Baptist church to have a roof over her head. Cretins. Heartless, gutless swine - all of these "I've got mine" mentality. May the FOAD and go to that hell they believe in, for while I don't believe in God, if It existed, It would have a hell and these rich, sick fuckers would all go there after they die a long excrutiating death.

[democrattotheend]

55. I made this point on another thread

That those who don't depend on Social Security or Medicare don't vote based on protecting them. The fact that a majority of seniors voted for Romney with Ryan on the ticket is evidence of that.

If anything, I think there might be stronger support for Social Security and Medicare if they were means-tested. Most people my age don't expect to get anything from either program, so we don't view it as social insurance that we will one day benefit from. To me it is just another tax. My mother is 55 and she feels the same way, although I think she has a decent chance of getting something before it goes bankrupt.

I don't mind paying it to help those who need it, but I kind of resent having my money go to people like the ones you describe. It doesn't seem fair that working-class people who are struggling to get by have their paychecks cut to support people like that.

I think taking steps to keep it solvent for longer will actually increase public support for it, because people under 40 will be more likely to see it as an investment in retirement security rather than just another tax.

[DURHAM D]

6. No

[newfie11]

7. Anyone that pays into SS should get it nt

[forestpath]

9. No, they should raise the cap! Means testing means that SS would get slashed for EVERYONE.

Rich people would make sure of that.

[Texin]

13. 25-30 years ago, I might have agreed with you.

But the fact is that the past 35-40 years has been hard on the middle-income earners and the working poor. Most corporations have used 401k plans to kill off any private retirement accounts, and the studies are showing that most who have invested in 401-ks see few if any benefits from them when they get ready to retire, or are forced to because of age or infirmity. Fewer and fewer actual, you know, working workers have any savings accrued and no retirement accounts to fall back on except for SS. The rich and their shills who bankrolled Rmoney and their ken, want to kill it anyway. They already consider it a "welfare" program. It doesn't matter that they might be getting any of those benefits. They'd gladly give it up to see the system die anyway. I don't know whether they're hoping to accelerate the demise of the system by taking from it when they clearly don't need or deserve it, but that's the effect. In the aftermath of killing it, it would really mean that already financially strapped younger workers and their kids would be carving out money to keep their parents afloat, moving them into their homes (assuming they have them) and further strapping their economic wherewithal.

[reinan]

47. How many of you have more than $1 million saved for retirement?

You would need that much, and more, to replace what SS would give you. I've been a hardworking salaried guy my whole life, making in the mid-five figures annually. I'm 55. My wife and I will both qualify for something like $2,000 a month in SS when we retire, or $48,000 a year in today's dollars. You realize that most investment advisors tell you not to withdraw more than 4% annually from your retirement accounts. So if you have a million bucks, that gives you an income of $40,000 a year. Not poverty, of course, but not cruising-the-world either. We would need more than a million dollars in retirement savings to match what SS will pay us. And let's not forget that people my age have been paying higher rates their entire working life -- because the 1983 SS fix was supposed to account for the baby boomers. This seems to have been completely overlooked in this whole discussion.

[jeff47]

49. You seem to have trouble with basic math.

The number of seniors who are high-income are very, very, very, very small. Because when you retire, you stop receiving large paychecks and your income becomes whatever you pull out of your retirement accounts to live on.

So you will save a trivial amount of money by cutting high-income people from Social Security.

In return, you have converted Social Security into welfare-for-old-people, and opened the door for it to be cut as brutally as welfare has been cut.

And you've done it to "save" a program that doesn't need saving. Social Security is fine. The Village is screaming about it because they are dumb enough to have not noticed the "SS runs out of money" date has been steadily retreating into the future.

Your idea is designed to sound good to liberals on the face, but will utterly destroy Social Security.

[Zorro]

10. Absolutely not

SS is a great equalizer; every citizen pays into SS.

People should not be denied their full SS benefit by means testing. SS is not a welfare program.

[anneboleyn]

31. Exactly, SS is NOT a welfare program, and means testing would misrepresent it as such

Rather, it is a program every worker pays into and every worker deserves to collect from -- equally, based on his/her years of work and contribution to the system.

[PSPS]

11. No. Means testing makes it a welfare program.

Means testing was deliberately left out of the design of Social Security because FDR realized that, as a welfare program, it would never survive. It is a defined retirement/pension program. As soon as you incorporate means testing, it becomes a welfare program and, as such, will shortly be raided and, when emptied into the bankster's pockets, will be scuttled.

[ToxMarz]

12. Very bad idea

Once you start means testing Social Security becomes a welfare program. Just like food stamps. And the demonization will begin.

[democrattotheend]

25. Not necessarily

The reason welfare and food stamps get demonized so much is because people believe (rightfully or not) that recipients are able-bodied people who are too lazy to work. Yes, I know that's not usually true, but that's beside the point. The point is, I have never heard a conservative actually say that an 85 year old who is struggling with medical bills as she gets sicker should go out and get a job, and while I don't doubt that there are a few Republicans who are heartless enough to believe that, that's not an argument that is likely to gain traction with the majority of Americans.

Plus, the exit polls provide some pretty good evidence that seniors who don't need Medicare already don't vote based on protecting it. 56% of seniors voted for Romney, a 3-point increase over 2008 in spite of the fact that Romney's running mate was the architect of the plan to turn Medicare into a voucher system. I don't have the dataset to break it down by age/income, but since the majority of higher income groups also voted for Romney/Ryan, it's a pretty safe bet to say that richer seniors voted for them, meaning they already were not basing their votes on whom they trusted to protect Medicare.

[jeff47]

45. No.

The reason welfare and food stamps get demonized is they are paid to poor people. The lazy moocher claims are part of that demonization.

Plus, the exit polls provide some pretty good evidence that seniors who don't need Medicare

100% of seniors need Medicare. Not at the moment, but they will reach their end-of-life care, which will cost mind-boggling amounts of money.

56% of seniors voted for Romney, a 3-point increase over 2008 in spite of the fact that Romney's running mate was the architect of the plan to turn Medicare into a voucher system.

They were explicitly excluded them from that plan. They get traditional Medicare under Ryan's plan. So they did not have to vote to save their Medicare.

Means-testing Social Security is the path to it's destruction.

[ToxMarz]

58. You should review the topic being discussed

Means testing of SOCIAL SECURITY not Medicare.

You believe ;
"The reason welfare and food stamps get demonized so much is because people believe (rightfully or not) that recipients are able-bodied people who are too lazy to work. '

If Social Security is means tested those are the same people that will end up eventually receiving it, same story, different day.

[backscatter712]

14. No.

Before long, you'll have to have made five cents an hour or less before you become eligible.

[frazzled]

15. It's our only truly universal social program

Dicker with it and it becomes welfare (as others in this thread have noted). Let's not let our distaste for greedy wealthy people get in the way of our ideological commitments. Social Security is not financially in trouble (well, nothing that a tweak to the amount of income subject to the SS tax wouldn't easily fix). Social Security should be a model: let's not tinker with it, especially when it's not necessary. Let the wealthy have their share of the American pie too, even if they don't need it. Maybe they'll give it to charity, but their access to it means a sacrosanct, guaranteed retirement income for every citizen.

[Warren Stupidity]

16. How about NO THE FUCK NO.

Here is a clue: instead of people with million and millions of dollars, it will be middle class retirees who will lose their SS benefit. There is no saving from taking SS away from millionaires, there aren't enough of them. Savings in SS, like revenue in income tax, comes from changes to the middle - that is where all the people are.

SS is already indirectly means tested. If your retirement income exceeds a very low threshold, your benefits get taxed. That threshold ought to be raised, but that is a separate discussion.

And finally: THERE IS NO SS CRISIS. SS is funded for decades.

[bunkerbuster1]

41. That would be shrill.

But correct.

[brokechris]

17. no. First--SS and Medicare are not in trouble.

Second the idea is that everyone pays in---and everyone gets something out. (provided they live long enough)

Third--people's incomes aren't static. Just because someone is rich today does not mean they will not ever need SS.

One of my friends has parents who are very wealthy liberals in Portland Oregon (owned a lot of property--did a lot of development back when the area was going like gangbusters). When they retired (sometime around 2002) they had an income of around 300K coming in and millions of dollars in net worth. And they felt bad about taking social security--so they went through some process to not get it.

Fast forward a decade---and their investments aren't bringing in enough to live on. They have sold off most of what they own. They are having to support two of their three adult children AND 7 grandchildren who are all in college or approaching college age.

They have been trying for some time to get back on the SS rolls--but apparently once you refuse--it is hard to do.

[democrattotheend]

26. That's really sad

That they tried to do the right thing and are getting burned for it.

With Medicare, the income-based premiums are tied to the previous year's (or maybe two years prior - I couldn't tell) income. So seniors whose incomes decline no longer have to pay the extra premium.

Any sort of means testing should be tied to the previous year's income and not to the amount they earned prior to retirement. The latter would create a lot of situations like the one you described.

[brokechris]

53. they are great people

I'm not sure if I would ever feel financially secure enough to give up Medicare and SS--I am in the 99%.

Even if I had an unexpected windfall--after all these years of living on the edge--I don't know if I would ever feel stable enough to give up my benefits....

[democrattotheend]

54. But I thought all rich people were evil?

That seems to be the prevailing sentiment on these parts.

Given how hard it is to opt back into social security, it's probably smarter to take the money and then donate what you don't need each year. There is a way to donate to the government...it was established in 1863 for those who wanted to contribute to the Civil War effort. You can always take the benefit and give what you don't need, although I don't think there is a way to earmark it for social security. But you could give it to a charity that helps low-income seniors.

[brokechris]

57. that seems to be the common thought around here.

When I was younger, I used to think that there were good people and bad people (with about 95% of the people I encountered being good).

Now that I am a bit more mature--there are just people. We all have good and bad inside of us. Sometimes I am surprised at how "bad" good people can be---and sometimes I am surprised at how much "good" there is in people who seem "bad". I'm done judging people. And judging based on how successful they are? Isn't success something we are taught to strive for? Why do we hate those who achieve it?

[Bluenorthwest]

18. Hell no, fuck no and just no.

Nope. No way.

[Blue_In_AK]

19. No.

[blkmusclmachine]

20. Depends if you want to kill SS. If yes, then yes.

[marlakay]

21. Everyone should get it but have no cap

I agree with all of those that say it will turn into a welfare thing that republicans would definitely push to crush if they couldn't have it.

[Coyotl]

22. No, very bad idea. The system is supposed to function properly and have the money

to pay us back for what we paid in. It is no different than an annuity. Can the bank say, "You are too rich to give you your interest on investment"? NO!!

[Sunlei]

23. SS should always be there to keep people above the poverty level as a benefit, not an entitlement.

Everyone should sign up for it when it's time. But I don't think everyone is entitled to a check like today. The payin cap should be raised aswell.

[coalition_unwilling]

24. NO! SS is one of the most successful anti-poverty programs in the history

of Western democracies. There is no 'problem' that a modest increase in the cap can't solve. So why would you change one of the most successful anti-poverty programs ever?

Now if we could just do for children what SS has done for seniors. (1 in 5 American children currently lives in poverty.) I believe that problem can also be fixed, which helps explain why I'm a Dem.

[still_one]

27. why? they paid into it like everyone else. However, they should raise the cap

[underthematrix]

28. I do not believe they should raise the retirement age and

I would not want means testing because how would that work for people who have already paid into the system. It seems unfair even though I understand some people may not need it. However, I think it should be publicize that such people ate getting both social secuirty and Medicare and really don't need it. I would do a documentary type program especially with the Obama haters because NO ONE would need to say anything after that. It would be like Mitt's Romney's 47% comments. No explanation needed.

[David__77]

29. Absolutely not. That would be a death sentence for it.

It would become a "welfare program."

[njcamden_25884]

30. to keep it short and simple

NO

[SheilaT]

32. No.

No no no no no.

No.

First off, the millionaires collecting SS or on Medicare are a tiny, tiny, miniscule portion of all those collecting SS or on Medicare.

Both of those programs are ones we all pay into while we work. They are the only "Single Payer" system we currently have.

As others have already pointed out, means testing is a sure-fire way to kill the systems.

Maybe, if your income is high enough, SS can be taxed. I know that it currently is, and I'm not familiar with the point -- income level-- where that happens. It should be above 100k, in my opinion. If those getting 30-50k or thereabouts in retirement have to pay taxes on SS, they'll start really, really resenting those taxes. While I myself earn a lot less than 30k, I understand that even 50k is not that much income these days. Let's exempt as much of SS as we can from taxation, while making sure that corporations that make millions, even billions of dollars in net profit each year actually pay a reasonable share of taxes, making sure that incomes above 250k are reasonably taxes, seeing to it that excessive CEO compensation packages are taxes. THOSE are the things that matter, and will bring in noticeable tax income, not means testing SS.

[mgcgulfcoast]

33. they shouldnt have to pay into social security

if they get nothing back.

[madrchsod]

34. nope....if you paid into the system you are entitled to medicare.

[Capisce]

35. At a minimum

The system could be adjusted to allow those who can afford to to make annual elections to forego social security benefits (and possibly Medicare benefits) and obtain a tax deduction for that year for the value of the benefits they did not receive. Social security would pay out less and the general government fisc will take in less but overall it is a net positive for the government. Then if, heaven forbid, something tragic happens to someone who previously did not require the benefits and now needs them they simply do not make their annual election to forego the benefits. It's not means testing but it provides some tangible benefit to forego unneeded benefits without turning the system into a welfare system.

[kyungju park]

36. No need. Just change the way Social Security is funded.

The way SS is funded now is regressive. Earnings are taxed from the first dollar and capped at something like $113,000. If there's a foreseeable point at which the SS fund would actually go bankrupt, then the solutions are to increase current funding or to decrease current (or at least near-term) benefits. To date, all of the solutions have revolved around decreasing benefits. As we all know, that's because the right-wing has been fighting against FDR since WWII (and LBJ, too).

Let's talk for a moment about increasing current funding, instead. How about capping the bottom for SS contributions instead of the top? In other words, rather than have everyone pay up to to $113,000, have no one pay up to a certain amount (let's say $40,000), with SS contributions kicking in at that point and being payable on all income above that level. Every year, actuarial analysis would be performed to determine how the 'kick-in' point would have to change in order to fully fund Social Security out to the horizon that I've regularly heard bandied about--75 years into the future. Voila! Regressive tax turned into a progressive tax and Social Security is fully funded forever.

[union_maid]

37. Or you could do progressive rates

You could raise or lift the cap and, if it's important that everyone pays into it, lower the rate at the bottom.

[hrmjustin]

50. Welcome to DU, and I hope you enjoy the site.

[wishlist]

38. No, but Fed income tax on it can be increased for wealthier

Soc Security is already partially taxable on Fed income taxes for many of us even at just the middle class income level but it could be subject to higher income taxes for higher earners. I also think Medicare premiums should be increased for wealthier to be closer to what insurance plans charge for similar coverage so that the trust fund is not bankrolling nearly the entire cost for wealthier seniors.

[Comrade_McKenzie]

39. Yes. Anything that protects people who need it more... nt

[jeff47]

48. Which means testing does not do.

Let's say you're an executive and getting nice fat 7-figure paychecks. You then retire.

You stop receiving 7-figure paychecks. Your income is now whatever you decide to pull out of your retirement accounts.

You won't be pulling massive amounts out of those plans. Just enough to live comfortably, for whatever definition of comfortable suits you. As a result, you are now middle-to-low income.

The number of people that would be hit by a rational means-testing is tiny. To actually save enough money to "protect it for people who need it more", means testing will have to hit large swaths of the middle class.

Plus, there's the little fact that Social Security isn't in crisis and needs no such protection. The people telling you it is in crisis are lying in order to destroy it.

[bunkerbuster1]

40. No.

There is no way to "thoughtfully" approach this, because if you've actually thought about means testing for more than five minutes, you realize this is a bullshit right wing distraction, designed to appeal to naive progressives who think maybe this is some kind of common ground we can reach with conservatives.

We won. We can't take the boot off their necks any time soon; we don't have that luxury.

[bunkerbuster1]

42. I should probably h/t Atrios

They've (quite justifiably) tagged the original post as sounding like a Penthouse Forum piece.

http://www.eschatonblog.com/2012/12/dear-penthouse-forum.html

[jeaps]

43. Means test, no - Raise the cap, definitely. Nt

[SouthernDonkey]

44. Put me down with the No's

If they did, It would be no different than the debate now about raising the MRA. Every year they'd be wanting to move the max earnings lower and lower to qualify. That is IF they didn't privatize it or dismantle it altogether. The way these goddamned republicans have privatized every other government agency, including the military, I'm really surprised they haven't done so with SS already.

[forestpath]

46. NO!

[PDJane]

51. After having a long conversation on this topic with an American friend,

I'm actually in favour of doing what is done here; one declares one's pension as income, and those who don't need it have it taxed away.

[JLII]

52. Should Dems be thoughtfully considering broaching means testing for Social Security eligibility?

Yes.

In addition standard full retirement age should be indexed every five to ten years to expected lifespan with the same reduction/increase schedule on either side of full retirement age.

Reason: while the system is temporarily solvent, it cannot be sustained at present parameters.

[PDJane]

56. A better solution to the solvency problem is to raise the cap.

There is no way that raising the retirement age is going to help the solvency problem; it will, however, put more people in harm's way.

However, means testing or simply taxing it back is a partial solution.

[Hekate]

59. No. Raise the cap.

Means testing SS will turn it into a "welfare program" and will make it very easy to defund and kill, which is exactly what the GOP wants.

[winstongator]

60. How to really help SS

Say you double the cap. 12% on another 100k. Say the person works for nearly 2X as long as they withdraw (18-68, then 68-93). There's your means testing. Extra 12k*50 = 600k put in, around 2k/mo*12*25=600.

Doubling the cap would severly impact the top 1%-2% level, especially dual earners. If you raised the cap 100k, my wife and I would probably have our tax bill increase by $18k (including the employer 6%). A one year bump like that would be disruptive. The expiring tax cuts will cost us closer to $8k, so a 3 year phase in would work. Or just look at % of income captured, and how far that is from 90% and do a third or quarter per year until we get back to having a base of 90% of income.

If you were going to do this, you'd have to address unearned income. It seems like everyone wants to tax work, while 'investment income' is sacred. We need to raise cap-gains taxes to the point that there is less incentive to avoid income tax by 'reclassifying' income as cap gains. Maybe we need more brackets to highlight how much of the cap gains taxes are really going to the top 0.1%.

[NoMoreWarNow]

61. welcome to DU

and thanks for your thoughtful post.

I hadn't realized the ramifications of raising the cap-- yikes.

I totally agree that capital gains taxes need to be increased!

[hrmjustin]

63. Welcome to DU and I hope you enjoy the site.

[Iggo]

65. No.

[Douglas Carpenter]

66. there is a reason why a strong welfare state has very strong support throughout Europe and

every single western democracy - but not in the United States. Even conservatives in other Western democracies who would want to trim it - would almost never dream of trimming it to the levels that the most liberal of liberal American politicians would ever dream of expanding it to. Means testing means one thing - cutting off at its knees its political support.

Progressives should be fighting tooth and nail to end means testing for social programs.