Any lawyers amongst us? Can we sue for breach of contract?

[Bluebear]

All this Social Security money I turned over for the last thirty years, I thought that represented some kind of promise that benefits would be there when I retired. Do the Republicans only make "Contracts with America" when it serves their interests?

[alittlelark]

1. I'm in the last years of the 'baby boomers'

I'll add my lawyers strength to the pot.

[Katidid]

2. I hope you hear from a passel of Lawyers willing to take this on

I was just sick to hear the age 55 is young and is the cut-off age for SS - I am so outraged at him ... So many broken promises. I am sure there will be a lot of folks showing up for their jobs tomorrow feeling totally defeated and hopeless. I will continue to watch this thread in hopes that you hear from some legal minds.

[magellan]

3. And -- is there some way to force the federal government

to pay back the money it's borrowed from the Trust Fund instead of defaulting or reaching back into our pockets? Honestly, that's OUR retirement money. Far as I know, we don't even earn interest on these generous loans we make the government. Some "contract".

[qwghlmian]

6. Why do you think that what you pay in

Social Security somehow is "yours"? It is not any more yours than the other taxes that you pay are yours. There is no marker somewhere that says "Mr. Magellan has $50,000 in his Social Security account - it is his". It is a tax. When you pay your income taxes, does that money belong to you? When you pay the sales tax, is that money yours? Same thing here. The 12.4% of your income up to 87K goes to pay current Social Security recipients. Whatever is left over is used by the government in its budget. In return, the government says it will pay you after you retire. But there is no contract. You didn't sign anything. The government decides how much it pays you and when you can retire. You have no control over that except vote. You can't sue - there is no contract, written or verbal, anywhere.

If it was a personal account, you'd have a contract that would say it is yours. If it was insurance, you would have an insurance contract that would detail the terms. As it is, there is nothing except government's "good will" to back it up - and you know how much you can trust that.

[magellan]

7. Why do I think it's mine?

Because I get little love notes from the SSA telling me how many units I've worked/paid into FICA, and how much I can expect to receive when I retire, maybe?

I realize SS is a tax. But it's a bit different from income and sales tax in that I don't expect to ever see those taxes returned to me. (You can get a portion of them back depending on status, income level and deductions, but that's by no means a guarantee of seeing any of it ever again.)

The government is incapable of guaranteeing an equitable return on FICA taxes paid because they've borrowed from the fund and won't repay it. Notice these are "IOUs" we're talking about. Meaning they recognize it's money owed. The looming 2018 "crisis" is one THEY have created. They can bloody well stop the frivolous spending and make good on those IOUs to the Trust Fund. Might as well start with this administration since bush** is so intent on fixing the problem.

[theboss]

10. If you die today, no one in your family sees a dime of that money

That spreadsheet sent by SSI is another Republican scam to piss people off. The reality is if you live to be 80, you will get back far far far more than you ever put in.

It's a benefit, not an investment.

[qwghlmian]

12. But there has never been any guarantee, the "love notes"

you get are estimates, based on current laws. Laws change, estimates change.

Sure you expect income and sales taxes returned to you, at least some portion of them, in the form of government services. But how big a portion you have no idea, and there is no guarantee. Same with FICA taxes - you expect some portion returned to you in the form of SS payments down the road, but you have no idea how big a portion, and there is no guarantee.

Look at what you wrote. You expect "equitable return on FICA taxes". That does not make sense as written. You can expect an equitable return on an investment. Expecting one on taxes is absurd.

[magellan]

14. Absurd?

When the government taxes me for a specific and identified benefits program such as this, it's not absurd for me to expect I'll get some of that benefit. I don't know about you, but my paystub identifies this tax as FICA, not THEFT.

However, it appears that argument was invalidated by a 1960 U.S. Supreme Court ruling. Just because you've paid taxes does not itself create a legally enforceable claim to benefits. And then there's the whole "future Congress has no obligation to keep promises made by a past Congress" thing.

How terribly predictable.

But the Trust Fund(s) is my question. Of these, one site says: "Any surplus is spent on other programs, or (more recently) is used to buy back government debt. Nothing is saved."

So Congress is paying down government debts using the Trust Fund surplus. Why don't they do something else about bush**'s fiscal irresponsibility and leave the surplus alone? That surplus could cushion the way towards simpler, well thought out reforms to SS.

This is just more evidence that the Republicans are exacerbating the "crisis" they keep bleating about, with the goal of overhauling the system to their own benefit.

[qwghlmian]

18. Let me try to explain this -

Let's say that this year the surplus (amount of $ paid in FICA taxes minus all the Social Security payments made) is $100B. What do you propose to do with this money? If you stuff it into mattresses, that is a lot of mattresses. You invest it. What is the safest investment? US Treasury bonds. So Social Security "Trust fund" buys $100B worth of US Treasury bonds and puts those under the mattress. What happens when you buy US Treasury bonds? You give the money to the US government to use as it sees fit, and get a piece of paper back which is an IOU for future repayment.

This is what happens today and what has been happening all these years. The problem is when you "invest" into yourself, you owe money to yourself. So US government right now owes trillions of dollars to the Social Security "Trust fund". Which is to say, the money has been spent and does not exist.

Hope this made it clearer.

[Yupster]

21. My good idea would be

to physically take the surplus and set it apart from the budget.

Put the money in CD's or insurance company fixed accounts. Then it would actually physically exist.

[qwghlmian]

23. Neither of those two are safer...

a CD basically loans the money out to the bank that issues it, which then uses it as it sees fit. If the bank goes bankrupt (and banks do go bankrupt once in a while, you know), the CDs become worthless (the FDIC insures CDs up to $100K, but we're talking hundreds of billions here). Besides, banks would be hard-pressed to absorb that much money, even if you spread it around many banks.

Same with insurance company fixed accounts.

The only place that can absorb that much investment "safely" is US Treasury bonds, because US government has an insatiable appetite for money. I already explained the scenario when using Treasury bonds.

What people seem to not understand is that past a certain amount, money is not "money" anymore. It becomes an abstraction. It doesn't really exist, except as obligations and promises and trust. You cannot put it in a "lockbox". To give an example that is not government related - Bill Gates does not really have $300B. Yes, if you multiply the share price of Microsoft by the number of shares he holds, you may get something close to that sum, but he doesn't really have that money. If he ever tried to realize it, the resulting drop in MS share price would drive the whole to a miniscule portion of what the "worth" of it is today. But let's say he sells MS and gets $300B in the deal - that is not cash, it will just be stock of another company or set of companies. And even if he somehow managed to get it in cash, what would he do with it? Convert it into other shares - that's just creating another abstraction. Pay down US government debt - that's reducing another abstraction. There is nothing real, or physical, there, it is all "ideas" that exist by common agreement, and are only as good as that agreement, or its underlying principles.

Same thing with the Social Security "trust fund". It is an abstraction that tenuously clings to the willingness of the US government to fund it, and is only as good as that willingness. It just does not (and really cannot) exist "by itself".

[magellan]

29. It does

And I say if the money has been spent on things other than Social Security then it should be repaid.

We are disagreeing on the government's handling of this money. You see this as an acceptable use of Treasury Bonds. I see it as stealing funds that were collected from Americans specifically for Social Security, for use elsewhere. Whether or not the government has the right to do this doesn't concern me; I call it wrong. Unethical. Theft.

Clinton was right. We need a lock on the lockbox. Republicans lost the thread on fiscal responsibility a long time ago.

[qwghlmian]

30. See post #23 above -

you just cannot have a "lockbox". There is nothing to "lock".

[magellan]

31. There most certainly is something to lock

REAL money is being taken from paychecks for FICA. A portion of that money winds up as surplus -- not being paid out as benefits -- because we currently pay more into the system than is required to sustain it. That surplus is being spent by the government for things other than Social Security. Hence the IOUs to the Trust Funds.

Tell me where I'm wrong.

[magellan]

32. qwghlmian, see the article here

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x3056111

[ultraist]

19. There is much more than just goodwill to back it up

There is legislation that stipulates detail by detail how the money is to be collected and distributed. That legislation is essentially our contract.

It is NOT just the *goodwill* of the government.

[Yupster]

22. No - I don't agree

Every generation has had the social security formula and tax rates changed on them. There's no reason we should be any different. Legislation is law until new legislation changes it.

My great grandfather paid 1 % FICA tax
My grandfather paid 3 %
My father paid 8 %
I pay 12.8 %
My kid will pay 18 %

The system changing is nothing aimed at us. It has happened to every generation and it will keep happening.

[qwghlmian]

24. Legislation is not a contract -

not if it can be unilaterally changed by one party and the other party has no recourse whatsoever.

[zmdem]

4. No

SS is not an account you have, where the money you paid in goes to your account. SS is just another unfunded entitlement program. The terms of the disbursement can be changed at any time, as can the tax on workers.

[ga_tatze]

11. SS Accounts

"SS is not an account you have, where the money you paid in goes to your account."

Isn't that exactly what Bush is proposing? And that money would be guaranteed, unlike the current system. And from the options I've seen, you could chose to stay in the current system if you like, or opt out and chose where your money goes, either mutual funds, or even straight interest bearing accounts not linked to the stock market. But the point is that it is YOUR money.

If thats the case, I'm not opposed to it. It just has to be done right. It certainly sounds better than a non-guaranteed system that can change or even go away at any time.

[magellan]

15. You'd better look more closely at the details, friend

When they're made available by bushco, that is. What is known is the proposed privatization will cost trillions to establish. Who do you think is going to pay for that?

[zmdem]

17. I agree with you, but you

didn't address what I said.

[magellan]

28. I did

I suggested you wait for the details. Some are coming out now. For instance, this isn't the 'make more money' scheme bush** has been wafting under everyones' noses. Read the discussions. There are plenty of them.

[Skittles]

16. LOL

see here is the problem - the way YOU think it works, it perhaps COULD benefit us. However, if REPUBLICANS are involved we already know DAMN WELL they don't GIVE A FLYING F*** ABOUT US. They are out to LINE THEIR POCKETS. So NO, you DO NOT HAVE THE DETAILS CORRECT.

[tritsofme]

5. You have no right to social security benefits

Section 1104 of the Social Security Act says, "The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress"

[txaslftist]

13. Ditto. From a federal lawyer. n/t

[ultraist]

20. Right, they CAN alter that legislation but that legislation is essentially

our contract. They are obliged to follow through with that contract or amend it.

As it stands, we DO have a right to that money we put it in until they amend the standing legislation.

They cannot change it verbally. It MUST be changed procedurally.

[qwghlmian]

25. Well, um, that is why they want

o change it by passing legislation and are not trying to just do it by proclamation. What is your point?

[Spacejet]

26. Sigh

An act of congress is in no shape or form a "contract". Ever. Period.

When the congress passes legislation - ANY legislation - it's not a "contract" with you. It's essentially a decree of "this is how it is, and if you don't like it, and it's not unconstitutional, too bad". A decree they can change at any moment.

[cattleman22]

8. Courts have ruled that

if government decided to cut off SS tomorrow, then the people would have no recourse other than voting. Just as farmers may have their farm subsidies cut off at any moment as well.

[theboss]

9. You don't understand Social Security

And you are falling into the trap that Bush is setting of making it seem like an "investment plan." It's not an investment plan, and it never was. It's a transfer of wealth (and a damn good one at that).

There is no account in Washington with the name "Bluebear" on it. The money you pay into SSI each month is immediately distributed to current retirees. When you retire, the money paid by current workers will be given to you.

That's all it is.

I wish people understood this.

[Spacejet]

27. Exactly

Basically what you're doing now is paying for CURRENT retirees.

The money the OP thinks he is owed actually DOES NOT EXIST YET. When you retire, the CURRENT money that will be paid by future workers goes to you. NOT the money you paid in. That will already be paid out to present retirees.