A radical idea to rescue Social Security

[kentuck]

Since LBJ started using SS funds in the 1960's to help pay for the Viet Nam war expenses, every president has dug into the trust fund to pay for everything since then. Of course, the surplus each year in that time was rather small compared to the surplus of the last few years.

Then, in 1983, Ronald Reagan -with the assistance of Bob Dole - raised FICA taxes to "save Social Security". Mostly it was to bring in more revenues from the working class and save the huge taxcuts Reagan gave to his friends.

During the latter years of the Clinton Administration, the government was running a surplus without using the SS surplus. Until Junior came along... Now the surplus of Social Security cannot dent the huge debt of this Administration.

My idea would be for each Party to pay back the amount they have taken out of Social Security. Republicans have taken out immensely more than the Democrats if we follow the presidents budgets presented to Congress. Each Party should have to raise taxes to pay back what they took out. They can decide who or how they wish to raise taxes. But the SS fund would be in pretty good shape today if it had not been robbed by both Parties.

[liberal N proud]

1. If they would just stop stealing the surplus from it would help

a great deal.

[patricia92243]

2. Gore's "lock box" would have at least protected it while he was president

I don't know if he could have passed legislation that would have guarded it on into the future.

[malachibk]

3. We only pay into SS on the first $90,000 of our income

Double it. There's your cash. It seems pretty simple to me (then again, I don't earn anywhere near $180,000 per annum).

[Skink]

5. Double the cap but exempt the first 20,000

Then rich people would think they are getting away with something. The first 20,000 would still be covered by the Government.

[zann725]

4. Great idea! And who better-funded by their "base"....to pay back

penny-for-penny each cent they've stolen.

But of course, like taxes, Repugs think its OURS to pay, and theirs to steal and spend anyway they like.

However, in an ideal world...one full of orange jumpsuits for white-collar criminals..."liening" Repug bank accounts (certain Hell-iburton ones in particular) of all they've "stolen" from U.S. tax dollars...would be "fair," I feel, indeed.

[kentuck]

6. But wouldn't that be a tax increase most Americans would agree with?

ANd would be difficult for the Repubs to make it a political issue, such as "the liberals are raising you taxes again"..

[dweller]

7. and this

Social Security crisis? Not if wealthy pay their way
http://www.csmonitor.com/2005/0127/p09s01-coop.html

Is Social Security headed for a crisis sooner than
thought? Although President Bush says so, not everyone agrees.
The system's trustees estimate the Social Security trust fund is in
good shape for another four decades. The nonpartisan Congressional
Budget Office figures five decades. Many independent economists
think Social Security is healthy for more like six or seven decades.

But there's a vocal contingent that thinks Social Security has much
more urgent problems. For years, Social Security has been
amassing surpluses that the system's trustees use to accumulate
Treasury bonds in its trust fund.

<snip>

In 1983, at a time when Social Security was genuinely
facing a crisis - it was mere months away
from failing at the time - a commission
appointed by President Reagan and
headed by Alan Greenspan proposed a
series of fixes. Among other things, the
Greenspan commission recommended
increasing payroll taxes.

But there was a twist: Knowing that the
baby boomers would begin retiring around
2010, Mr. Greenspan recommended
raising payroll taxes by much more than
was needed to pay benefits at the time.
The surplus would be used to buy
Treasury bonds, which could be
redeemed when the boomers retired and
payroll taxes were no longer sufficient to
fully fund retirement benefits.

This is where the second twist comes in.
Because the surplus payroll taxes were
handed over to the federal government (in
return for Treasury bonds), this meant
ordinary income taxes could be kept low.
After all, the federal government has a
fixed need for money, and if it gets
excess money from payroll taxes it can afford to keep income taxes
lower than they'd otherwise be.

But the payroll tax is a flat tax, paid disproportionately by low and
middle income workers. The income tax is a progressive tax and is
paid disproportionately by high earners.

So this was the implicit bargain in the reforms recommended by
Greenspan and signed into law by Reagan: From 1983 to 2018, low-
and middle-income earners would pay excess payroll taxes. This
allowed income taxes to be kept low, and primarily benefited high
earners.

Then, beginning in 2018, instead of raising payroll taxes to pay for
baby-boomer retirement benefits, Social Security would begin selling
its bonds back to the government.

To pay for those bonds, income taxes would be raised - high earners
would begin paying higher income taxes.

In other words, the fact that income taxes will eventually need to be
increased in order to cover Social Security benefits was part of the
Greenspan/Reagan plan from the start.

That's the real meaning of the trust fund: It's an implicit promise that
high earners will keep their part of the bargain and begin paying their
share of Social Security's costs when the baby boomers retire.
------------------------------------------
and the reason *moron claims 2018 is doomsday date for SocSec.
dp

[kentuck]

8. Excellent!

Thanks! I did not know that income taxes were part of the original fix by Reagan and Greenspan.

[Skink]

9. And I thought they just raised payroll taxes to give to the rich.

[applegrove]

10. Oh! Wouldn't that be funny! If Repukes had to pay the debt their

leaders imposed on the country - rather than the children of today's middle class.

[nancyharris]

11. It should be pointed out

that the President (LBJ, Nixon, Carter, Reagan, Bush1, Clinton, Bush2) does NOT have any authority to spend tax dollars (or social security) on anything. If you read your Constitution you will see that Congress (specifically the House of Representatives where all spending bills must originate) are the only people authorized to spend (and tax). It is incorrect to either blame or praise LBJ or Clinton or Bush or any president when it comes to taxing or spending as they have no authority to do either.