House Passes $196 Billion Social Security Bill: Will Repealing Pension Reductions Shorten The Program's Lifespan?

[LymphocyteLover]

https://finance.yahoo.com/news/house-passes-196-billion-social-161533489.html

I don't understand this story. They are reducing benefits, but it's supposed to increase the deficit? It makes no sense!

[marybourg]

1. They are increasing benefits

to public sector employees whose benefits were previously reduced because of their government pensions, therefore, total payouts are increased.

[LymphocyteLover]

15. I see. I didn't read it carefully enough. I thought they were adding those provisions

not eliminating them. I guess I was surprised that increasing benefits would be a bipartisan thing. Also I don't get the rationale for doing this.

[marybourg]

20. Constituent pressure.

[MichMan]

2. They are increasing benefits for some public sector retirees

Did you read the link?

[LymphocyteLover]

16. Thanks yes. I didn't read it carefully and thought they were reducing the benefits

I'm not sure what the rationale for this is and I was surprised GOPers are increasing benefits.

[CousinIT]

3. It means those on gov't or public pensions will get more from social security

Previously, they got their pension and greatly reduced (or no, I'm not sure) social security. That policy would be ended.

It will take more money from the SOC Security Trust Fund, thus pushing it closer to a depletion state, where it will be unable to pay full benefits. Due to Trump's policies, this is expected now to be in 2031 or 2032 and retirees on social security will see a 30-33% reduction in their monthly benefit at that time - unless Congress does something to avoid it (I wouldn't count on that).

[LymphocyteLover]

11. IMO the article implied the other way around and I'm not sure why Repubs would agree to this

unless the want to accelerate a SS shortfall

[MichMan]

4. Why were some government employees exempt from contributing to SS in the first place?

[Igel]

5. Because we have DCPs that replace SS.

The problem is that very often if you work for 40 years at one job or in the private sector, you get social security and nothing else.

If you work for 10 years in the private sector and then become a teacher for 30 years, you can claim both.

My teacher pension isn't inflation adjusted. It's an annuity.

Inflation was going to force me to postpone retirement by a year, until I was 67. Now it looks like I'll be 68.

[MichMan]

7. No one should be exempted from SS taxes

People in private employment aren't permitted to opt out.

[marybourg]

8. Public service employees, with their pensions,

were believed not to need Social Security.

[LymphocyteLover]

13. they can though

[MichMan]

14. I never heard anyone ever say that private sector employees can opt out of FICA taxes as long as they have a pension.

Interested in knowing how long that has been an option. What about a 401k?

[LymphocyteLover]

17. My mom was in the teacher's union and their contract said they would get a pension

and not have to pay FICA -- but obviously part of their pay went into the pension. She's been retired about 20 years. She never got any SS benefits.

I wonder if this affects her now.

I don't know if IRAs can be like this but I doubt it.

[LymphocyteLover]

12. My mom was a teacher and has a generous pension and never contributed to SS

so doesn't get SS

[bucolic_frolic]

6. Rare that I agree with anyone from the Cato Institute

From the link:

"Policy experts also express their concerns. Romina Boccia, director of budget and entitlement policy at the Cato Institute, criticized the bill, stating the policy is wrong and needs broader changes.

"We should reform Social Security so that it provides basic income security to the most vulnerable Americans in old age without adding to the debt or tax burden that younger workers face," Boccia said."

[XanaDUer2]

9. Too scared to read

[GreenWave]

10. If Trump is told a family member of his invented SSI and somebody stole the idea...

it will stay rock solid.

[marybourg]

22. This has nothing to do with SSI, which is a program for low-income.

Don’t confuse it with S.S. Just a coincidence of initials.

[Jacson6]

19. The worst that can happen.

SSA will be reduced 25%.