The American Spectator : The Means Testing Temptation

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The Means Testing Temptation

By Ross Kaminsky on 3.9.11 @ 6:09AM

Republicans will need to resist turning Social Security into a full-blown welfare program.

America’s fiscal need for entitlement reform is pushing the discussion about Social Security inexorably toward “means testing,” a policy both the left and the right have long avoided. Both sides realize that means testing, namely reducing or eliminating payments from the program to higher income senior citizens, would recast Social Security from its current perception by citizens as a retirement program to one of outright redistribution or welfare.

Many Americans see Social Security as a savings plan, albeit a coerced one, and a recent poll by the AARP (which certainly knows how to write poll questions geared to suggest as much approval for the program as possible) shows wide support for Social Security with equally wide skepticism about the program’s future.

The fact that it’s seen as a savings plan, that it has been seen as such for at least a generation despite two Supreme Court rulings that Social Security payroll taxes are not savings, not investment, not insurance, indeed not anything other than another tax levied by government, suggests that means testing in any substantial way will require jumping a substantial political hurdle.

The hurdle has been lowered by the fiscal debacle created under this president and the last one, leaving a substantial subset of both parties ready to attempt to clear it. This despite the political risk implied by AARP’s poll question asking whether respondents agree with the statement that “Everyone who pays into Social Security should receive it, no matter what other income they have.” According to AARP’s results, 83% of Americans agree and “belief in this idea is high regardless of income, age, or gender.”

America has dipped its toe into de facto means testing by making Social Security benefits partially taxable, beginning with the 1983 Social Security Amendments that “include up to one-half of Social Security benefits as taxable income for taxpayers whose adjusted gross income, combined with half their benefits and any tax-exempt interest they may have, exceeds $25,000 for a single taxpayer and $32,000 for married taxpayers filing jointly.” These threshold levels for the taxation of 50% of benefits have not been increased in the 27 years since this tax came into being, even though median household income has increased across the entire range of wage earners since that time.

In 1993, the Democratic Congress and Bill Clinton passed the Omnibus Budget Reconciliation Act — without the vote of a single Republican in either the House or the Senate — which, among other things, raised the taxable portion of Social Security benefits to 85% for those who meet a slightly higher income threshold: $34,000 for an individual or $44,000 for a married couple filing jointly.

But taxing benefits is, and certainly sells politically as, very different from reducing or eliminating benefits based on income.

Historically, conservatives have opposed means testing because it turns Social Security into a redistributive welfare scheme (in addition to the Ponzi scheme that it already is.) The left has generally opposed means testing for the flip side of the same coin: While it has no qualms about income redistribution, it knows that doing so within Social Security is, as the AARP poll results indicate, deeply unpopular.

Unfortunately, the current federal budget disaster could give cover to both sides to turn Social Security into what it was never intended to be and what Americans don’t want it to be, especially if means testing can be done under cover of a more pleasant-sounding name. And that’s exactly what’s coming.

Some Republicans will see means testing as a politically less bad choice than a very large increase in the retirement age (although some increase will certainly be part of a long-term solution for Social Security’s fiscal imbalances). It will also generate less media blowback than trying to squeeze another $100 billion out of domestic discretionary spending, whether defense, education, or even the relatively unpopular Departments of Commerce, Labor, and Energy.

In other words, if there weren’t an historically large budget deficit and national debt to deal with, Republicans would never go along with turning Social Security into welfare, but this time some of them will for fear of being demagogued about other spending cuts.

And once Republicans begin to go along, asking Democrats if they want to use Social Security to further their self-perception as Robin Hood will be as easy as offering candy to a 5-year old. It’s a no-brainer for both to accept, with short-term benefits for the recipients and long-term bills for the adults to pay.

These changes will be made under the name of the “Pozen Plan,” named for Robert Pozen, a former Fidelity Investments executive and Democrat member of President Bush’s Social Security Commission — or at least something very like it. Pozen, almost a decade ago, proposed “progressive indexation” of Social Security benefits: Increase benefits for lower income Social Security recipients based on a national gauge of wages, but for higher income recipients the benefits would be indexed to prices, which rise more slowly.

Even Pozen recognized that this would be a hard sell to conservatives, however, so he included a “sweetener” to the proposal to allow a small portion of a worker’s payroll tax to go into a personal retirement account instead of into the fiscal black hole of Social Security. Pozen proposed 2%, though George W. Bush in his depressingly brief flirtation with free market principles suggested 4%.

Pozen’s plan is an alluringly subtle way to means test, allowing Democrats and anything-but-cutting-more-defense-or-education Republicans to make bogus economic arguments, just complicated enough to confuse most voters, in support of finally achieving the Progressive goal of having the “rich” fund everyone else’s golden years.

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About the Author

Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver’s NewsRadio 850 KOA at 11 AM on most Sundays. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.

Letter to the Editor View all comments (185) | Leave a comment Leave a comment

Appleby| 3.9.11 @ 6:46AM

Social Security is a Ponzi Scheme that has finally met its demographic match -- but this has nothing at all to do with the fact that we paid into it for 50 years, under protest and through extortion, and at the very least we want our money back.

Oh, and an admission that the program was never meant to turn into what it is today, and that adding all the free riders to the program and taking no notice of the rising lifespan of the contributors, is what sank the boat.

Deborah D | 3.9.11 @ 7:53AM

Appleby -- I agree. Give us what we put into it with a bit of interest in a lump sum, non-taxable. It might not be much, but it would be worth it if we kill this crappy Ponzi scheme that is bankrupting the country.

JimH| 3.9.11 @ 8:33AM

Deborah, I agree. Any return beyond what a private annuity might pay is unfair to the taxpayers funding it. I don’t think that the gummint has the resources to pay out this obligation as a lump payment to all without liquidating pretty much all of its assets. I think I saw Walter Williams recommend that the Feds actually do something like that. His plan was to give each person 100 acres of land in lieu of any future Social Security payments.

PhilTheCapitalistPig| 3.9.11 @ 9:18AM

Don't you love Walter Williams? He has so many great, common sense ideas.

Mitch Angoop| 3.9.11 @ 3:31PM

Here's a little known fact that will make your day. I was 50 years old when I was stricken with a form of motor neuron disease. (Like ALS) There is no cure and the end is nasty. So, my employer applied to get me on permanent disability, as they would have done for anybody.

However, being an old fashioned conservative, my wife and I played by the rules, had no debt, and sufficient savings to live on for a significant period of time. I had also bought a disability insurance policy many years before, so I thought we were in good shape. Au Contraire! He said!

Before I could get one cent from my insurance, I had to qualify for social security disability and medicare, even though I still was covered under my employer's benefits. Of course, Medicare screwed everything up, and we had a mess right when I had to go under the first of my 12 major surgeries to keep me alive.

At the same time, my insurance company could not pay me until social security approved. Remember, this was MY MONEY! I had paid premiums for years. Then, social security turned me down, telling me that I wasn't sufficiently disabled, even though my limbs didn't work, and I could not walk. It took my company 18 months to finally get me approved.

Then came the next surprise: Social security took my money from my insurance company and paid me my pittance out of taxpayer's funds! I won't even go into the horrible things that we overheard (and taped) govt. 'workers' saying about me when they didn't think we could hear them during conference calls with me, my company, and our lawyers. (It seems that I had committed the unpardonable sins of being white, male, and senior management.) So, finally, I now get paid by social security, even though it is MY MONEY; it has to go to them, get their 'cut' taken out, and the remainder goes to me. And, I'm now forced onto medicare. And barry the muslim wants even MORE control over my life with his death panels. And there are thousands like me who did things right and get screwed for it. What a country! No!!!
That's what we get when demoncraps sneak their rotten little noses into things. After managing a billion dollar business you'd never believe what I'm supposedly entitled to. Thank God I worked for a great company that was willing to do the right things by an employee.

Thom| 3.9.11 @ 8:06PM

Mitch, you probably already know this but “some animals are more equal than others” and that is the primary purpose behind the bulk of the Welfare systems. If you had been non-white and lead the life of a sloth and were already registered in numerous government assistance programs throughout your life you would have been in “clover” in under a month. The government is not competent enough to actually determine true “need” but it excels at following bureaucratic rules designed to benefit the sloth. I hope things improve for you through God’s grace…..

plm| 3.9.11 @ 11:04PM

ok, so you, as an old fashioned conservative bought a policy without paying attention to what it said, that's your issue. The fact is that your insurance company, like all long term dib policies, required you to apply for SSA dib benefits, and, like all long term dib policies they had a clause that said if you were awarded dib benefits from SSA they would recoup any money from your SSA underpayment that they had already paid you while you were awaiting a decision, so if they paid you $1000.00 a month for 12 months while you were waiting for SSA benefits, then they would take $12,000.00 from your back due benefits from SSA, but note, they didn't have this agreement with SSA, the agreement was with YOU, so if you don't like it that ultimately is between you and whatever company you're dealing with. As to your current benefits, again, you agreed to a policy with your private insurance whereby you agreed that if you became eligible for dib benefits you would only receive from the long term dib company the difference between your SSA benefit and your long term dib benefits, so if long term dib were to pay you $1,000.00 and SSA paid you $800.00 you would only get $200.00 from your long term dib company thus bringing you to a total benefit of $1000.00. Again this has nothing to do with SSA and everything to do with the contract you agreed to with the insurance provider. Ultimately my complaint against your interpretation of what happened is that you blame everybody without accepting any of the responsibility. SSA didn't make you sign up for your long term policy, though, I'm glad you did and had it at your disposal, and SSA has nothing to do with how your long term dib benefits are now paid out. In fact, SSA has highlighted the fact that the long term dib companies require dib applications even when they know that the person doesn't meet the disaiblity definition as put forward by SSA, as a reason for the glut and backlog of dib applications, so I'm sorry for your current medical situation, but the situation as you describe it, apart from the bureaucratic dictators and their nasty red tape and dispositions is not the fault of SSA. Why does this matter? because your complaint is a misdirection, no, not purposefully, but it misdirects from the real problem, which ultimately is not the frustration you have with your insurance policy. The real problems is we only have 3 workers for every 1 retiree, and no one wants to talk about that demographic nightmare.

Mitch Angoop| 3.10.11 @ 12:21AM

I'm not quite sure what prompted your lengthy diatribe, but I did know all that when I signed up for the policy more than 20 years ago, and things are going just fine. My point is that I shouldn't be getting a dime of taxpayer money because I took care of my own needs and don't need it. But, you were so determined to make some sort of negative comment you didn't read my post.

There was no reason to put me on social security or medicare because I had made provision for myself. Had you paid attention, you might have figured that out. There are tens of thousands receiving our money because they didn't make provision for taking care of themselves. And, please don't give me any crap about winning life's lottery or any other lib drivel. We're all ultimately responsible for ourselves and our families. Maybe even parts of our community under some circumstances. But, in America today, we have a whole class of people who are not only content to be taken care of by other people's hard earned resources; but who demand it because they think they are entitled to the fruits of their neighbor's labor.

plm| 3.10.11 @ 2:35PM

I believe you did not want to take a dime of taxpayer money; I believe you were apalled to learn that you had to apply for Social Security, but you acted against your intention not to take taxpayer money when you included as part of your future provision a long term dib insurance policy that required you to apply for SSA. Apart from the egregious way you were treated by the people you encoutered, where does SSA's culpability exist in the experience as you've described it? They did not force you to apply; they don't force you to accept the benefits on a monthly basis; your insurance company forces these things. BTW I understand why your insurance company does these things; I'm not labeling their behavior as either good or bad. Finally, I only wrote this because this is a public forum, and you've made a public statement that isn't completely accurate, and as I initially said, this leads to a misdirected anger and faulty solutions, what good are those?

Deborah D | 3.9.11 @ 3:52PM

God bless Walter Williams. Please, someone in Washington (how about you, Paul Ryan?) get Williams to give you some great ideas. Our country would be so much better for it.

Aquanomics| 3.9.11 @ 10:24AM

Not much? I am a long way from retirement, 62 or 66, and uncle sugar has denied me over $220,000 in my contributions and wages that instead went to my employers' contributions. If only I could add that sum to my exisiting nest egg....

Ed White| 3.9.11 @ 12:16PM

I'm wondering what happened to two posters who used to post on this site regularly:

Margie and Ken (Old Texican)

I never see their monikers any more. Has anyone read anything by them recently. Thanks.

Mitch Angoop| 3.9.11 @ 3:33PM

Ken's around. I think I saw one of his posts today. I think he has been writing his sequel to his Texas book; but it is apparently finished.

Deborah D | 3.9.11 @ 3:55PM

I did see Ken post on the article about "Remember Times Square." I haven't seen Margie post for a very long time. Hey Margie, are you out there lady?

Mitch Angoop| 3.9.11 @ 1:56PM

WARNING!
I do not want to be alarmist, but I have been wrestling with the worst virus/worm I have EVER encountered. It apparently got in through a ‘hole’ in an ADOBE FLASH update message. It will come up as a warning that your computer has been infected by a virus and appear to be scanning your hard drive. DO NOT OPEN IT OR EVEN CLICK ON IT! If you do not know what to do, try to get into SAFE MODE and call an expert. Microsoft has issued more than a dozen security definitions and attempted patches in the last week and it keeps getting back in. This is very serious! I may be paranoid, but it looks like it could be a coordinated attack on our internet. I hope I’m wrong.

Sorry for the diversion from the topic at hand.

Alan Brooks| 3.9.11 @ 8:48PM

This piece makes sense:
the wealthy will always own America, if it weren't them it would be others to take their place.

Alan Brooks| 3.9.11 @ 10:50PM

... that is what Mr. Kaminsky is writing above, there's always a code. Like say when Bush proclaimed he would sent up to 6,000 border troops to Texas, AZ, NM, and CA; it could have meant anywhere from 2 to 6,000 troops.

Clint| 3.9.11 @ 8:11AM

Dr.Ron Paul:
"Social Security is simply a tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues materialize as hoped; the money you paid into the system is long gone."

PhilTheCapitalistPig| 3.9.11 @ 9:16AM

"The truth shall set you free"

Peppermint Tea| 3.9.11 @ 11:58AM

Absolutely. What's wrong with telling the citizens the truth as stated in the article: "two Supreme Court rulings that Social Security payroll taxes are not savings, not investment, not insurance, indeed not anything other than another tax levied by government."
Then, when Uncle Sam is in the hyperinflation cycle, we can pay off all the SocSec money in worthless dollars, and reboot the system with the new currency--that is the secret plan isn't it?

Alan Brooks| 3.9.11 @ 8:51PM

"Then, when Uncle Sam is in the hyperinflation cycle, we can pay off all the SocSec money in worthless dollars, and reboot the system with the new currency--that is the secret plan isn't it?"

You got it. Life is trading one Hell for another.

Nunya| 3.9.11 @ 10:54AM

The dirty little secret is that the Democraps in the mid-60's moved Social Security out of it's own account and added the money to the general fund. At the time there was a significant surplus in the account, and it gave the idiots in Washington a fortune to spend on their pet projects. At that moment it ceased being a savings account and simply became another tax.

I see people saying "just give me back what I put in..", and while I agree with the sentiment, there is NO MONEY in the account to give back. This scheme is doomed to fail unless something drastic is done, and unfortunately, it will mean the end of someone's political career if they do what's necessary.

Appleby| 3.9.11 @ 3:56PM

The whole idea that there is "no money" is nonsense. Give me the money my congressman (who once left me a voice mail message calling me a racist) fritters away on wine, women and song each year, and I will be content.

martin j smith| 3.9.11 @ 8:12AM

Politically speaking Social Security has always been a third rail issue due to highly distored non-information from the Left. So, what I think should be done is to use the Left's Class Warfare against them in this way:
Take the Federal employees earning over $100,000 or more and ask the question: Can we afford to pay so many ( and there are many ) people these kinds of salaries in a time of economic hardship ? When so many have no job at all ? ( and I would also look at the value of their benefits which will spike the salary package even higher )? It is our belief that federal Employees from the President on down aught to make a gesture that shows they are willing to take a hit on their salaries and benefits first. Before asking the rest of us.
So President Obama: What percentage of money are you and other Federal Workers willing to give up ?

JayDick| 3.9.11 @ 12:59PM

Having far fewer of them would save a lot too.

As a retired federal employee, I can say that a higher proportion of high-paid feds earn their money than do lower-paid ones (using $100K as the dividing line). But, there are far too many of both categories.

Ryan| 3.9.11 @ 8:16AM

It MAY be a generally decent compromise to get private accounts if there is some sort of indexing.

We need to raise the age on it first, though.

PhilTheCapitalistPig| 3.9.11 @ 9:04AM

Why? Do you realize how rich EVERY american would be at age 60 if 7% of their income had been put into an investment account earning even a conservative return on investment? Its stupid. School Teachers would be millionaires before the age of 40. Just with what they pay into FICA, not considering any other 401k's and the like.

LiveFreeOrDie| 3.9.11 @ 12:04PM

Exactly! What other "investment" do you put money in your entire working life only to be taxed at 50-85% for the few years (if any) when you start to withdraw because you make "too much" money. "Too much" is defined as anyone at the poverty level and above.

If SS can be forced on us why can't a mandatory savings plan replace it? At least the money would actually belong to us and not be spent in exchange for IOU's and promises. Not to mention it would be 100% fair, ie the more you make, the more you save and have available at retirement. No need for the Government to decide who makes too much, too little and just the right amount of income. No need for subsidies. No need for any other involvement, period.

JayDick| 3.9.11 @ 1:00PM

What about the employer match? Add that in and we're looking at real money.

PhilTheCapitalistPig| 3.9.11 @ 1:09PM

Never thought of that. That's makes the whole scheme even more of a wealth-robbing mechanism.

Appleby| 3.9.11 @ 3:57PM

Considering the fact that I did that TWICE, and twice my money was wiped out in stock market crashes?

Hah.

Ken in Tyler| 3.9.11 @ 8:43AM

I've posted the thought before but it bears repeating: If our government does not return to operating by principles rather than what is politically expedient at the moment, we are doomed. Electing representatives who will act in accordance with principles requires an electorate which will recognize fraud and theft when it is exposed and act to eliminate it. What we have today is voters who return self-serving career bureaucrats to office time after time because the voters themselves are self-serving and short-sighted. Franklin said it well. "Only a virtuous people are capable of freedom." Look around. Can our hedonistic PC society any longer be considered virtuous? The wide acceptance of government ponzi schemes and "redistribution" under any banner reveals that the foundations of the Republic are crumbling(or already have). Tinkering with Social Security, Medicare or Medicaide won't fix a thing. They must be eliminated on principle.

PhilTheCapitalistPig| 3.9.11 @ 9:05AM

FACT

Nunya| 3.9.11 @ 11:23AM

You are absolutely correct, and unfortunately by looking around at our current society, I would have to come to the conclusion that we're doomed.

buckeyeman| 3.9.11 @ 11:28AM

Ken, you are right, but by your own logic and simple evaluation of the facts, the "doom" is almost here. Look at the performance of our representatives after the recent landslide for republicans. Dithering and slithering our way to economic collapse. What happens then? Lots of speculation but, of course, no one can know for sure.

The highly touted conservative pushback in Wisconsin is a joke. Sorry, Governor Walker, IT'S A JOKE. Boehner (my representative, btw) leads the Repubs in "slashing" an annual budget deficit of $1.3 trillion (one thousand three hundred millions of dollars) by an astonishing $61 billion. What nonsense! They all know the ship of state is sinking and cannot be saved. No one wants to give the "abandon ship" order. They and we all know it's coming but hope it can be delayed for just a bit longer. Maybe so, but it is coming just the same. Prepare for the worst.

Peppermint Tea| 3.9.11 @ 12:01PM

Your $1.3 trillion deficit is an old number. It was revised by the CBO up to $1.48 trillion in January, and is now estimated at $1.6 trillion. Yup, we've lost $300 billion while arguing about $60 billion.

FTM| 3.9.11 @ 5:41PM

The bear went over the mountain...

Ed White| 3.9.11 @ 3:07PM

Ken in Tyler, are you the new moniker for Ken (Old Texican)?

Brian Mc| 3.9.11 @ 8:47AM

I don't see the need for this discussion since it will all go away once Obomacare goes into 'full' affect. Once the rationing begins no one will make it past sixty five, or there-abouts. Problem solved.

MikeD| 3.9.11 @ 8:56AM

One thing the GOP had better understand very quickly is the level of fury residing in the core of their support; Americans who have actually played by the rules and done things right: like saving for retirement, getting out of debt, paying off their house, and living within their means. This segment of the populace is angrier than a cat in cold water and simply will NOT let the Republicans screw them (US!) again. Any cooperation with the demoncraps will ignite their ire in ways the GOP cannot even imagine.

It is time to clarify the philosophies and practices that made America the greatest nation on Earth. In addition to the revolting disgust that fills my soul everytime I think of how somebody like obama could have gotten elected; I get equally disturbed when that creature opens his mouth to denegrate OUR NATION for some other imagined transgression.

There are millions of us who played by the rules and should now be DEMANDING that our politicians, starting with the GOP (The alleged adults) start rewarding us for that. We are sick and tired with both parties, but overwhelmingly the democrats, for buying the votes of the lazy, the stupid, and the inferior with the money that we earned through hard work and thrift; something totally alien to the dems and their flock of worthless parasites. Social Security may be a scam and a Ponzi Scheme, but that money, what little there may be, should be returned to those who were forced at virtual gunpoint to hand it over to our corrupt government.

Peppermint Tea| 3.9.11 @ 12:05PM

Yeah, that's the black irony with means testing. When implemented, the middle class will get nothing for their years of tax, while the "poor" will be paid from their continued payroll taxes. It is enough to make a retiree go to Vegas and put it all on the roulette wheel. If you win, you win. If you lose, then you are poor and you win! Another moral hazard.

FTM| 3.9.11 @ 5:53PM

Yeah, I'm the guy in the first paragraph. Spouse and I paid off the house. I have a car that I drive to work. Spouse has a car that she drives to work. Son going to college has a car that he uses to go to school and to work. All three paid for.

Daughter just started out as a full time school teacher. The daughter, less than six months in the saddle, showed me her check stub. She makes more than spouse, a twenty plus year vetran psychiatric nurse.

Mother-in-law lives with us. She has Alzheimers. She was robbed blind by her "guardian." Spouse went to the cops over the robbery. The cops threatened to arrest spouse. Just what I've come to expect from the thugs with the guns and the badges. Socialist security sends a $1600.00 check per month. Medicare and Medicaid both claim that mother in law isn't qualified for benifits. Too many Mexicans and congenitially useless in the system I guess.

I'm fifty years old and there's no way in hell that I'll ever see the first dime of my socialist security pension.

The republic is no more. Or I should say that the republic is no more for me. The republic is for the useless and the criminal and the politically dependant. The useless and the criminal are always at the front of the line. The useless and the criminal have advocates and activists. As for spouse and I it's just spouse and I.

Like I said before, the republic is no more.

I saw a bumper sticker the other day on the back of a pick-up that said "America, Love It Or Give It Back." I can't imagine that they'd want it.

PhilTheCapitalistPig| 3.9.11 @ 8:58AM

Think of how much wealth has been robbed from the baby-boomer generation. The taxpayer-to-recipient ratio was much, much higher than it is today throughout the majority of their adult life.

The money is gone now. Not much you can do about it. I tell the baby-boomers that, if you wanted your Social Security then you should have held politicians accountable. Instead of allowing them to kick the can down the road.

If even you 50-somethings have been counting on SS you are kidding yourself. You should have been planning better. That's all there is to say.

Don't demonize young people for not wanting to continue to pay into a ponzi scheme just bc your generation wasn't paying attention.

There should have been just as much resistance, and an effort to repeal SS when it was passed as ObamaCare.

Thank God for the TEA party. At least now we have a chance, a small chance to straighten this out. I suggest we take that chance to straighten it out and not worry so much about what's in it for you.

Yes, I know you "worked your whole life" for that, but you should have been paying attention. Period. They never treated it as retirement income. As Ross points out, they have simply taxed your wealth and spent it as they saw fit.

Time to get rid of it altogether.

Wayne | 3.9.11 @ 11:40AM

So you suggest that the retirees just die?

YeloStalyn| 3.9.11 @ 1:10PM

I think he suggests that people suffer the consequences of their own ineptitude in voting instead of letting my generation pay the bill.

On principle, I would be fine letting retirees get nothing this month, or the next. They voted for the system, they initiated it, they fawned over FDR, they got suckered... let them suffer.

On morals, though, I have compassion and as a younger American am willing, if given the option, to continue to pay my FICA so that those who counted on SS being there for them today can receive it knowing that I will not. Stop promising newcomers benifits. Don't "cut" the FICA tax... eventually as retirees do die off this tax that I will continue to pay can then be used to pay off the debt. My tax burden does not change, nor does my future because even now, even though Uncle Sam says I'll have SS, I know that SS won't be there and I am planning accordingly.

Simple fix. Some one has to bite the bullet and I'd rather it be me because I have the time to plan accordingly. It would present the least negative impact on the economy (like I said, my tax burded doesn't change) and it would allow a system to pay off the debt over time as well. Granted... this all depends on a few other things as well... like keeping the deficit in check (yeah, right!). But... in pure hypotheticals... it would be nice.

FTM| 3.9.11 @ 6:07PM

Have yo had a head X-Ray recently?

Based on past performance, based on the assumption that what you proposed were to come to pass, what would lead you to expect that the federal government wouldn't go on a spending binge that would make all others appear small? There is no mechanism for control. We let everybody vote. Under the present set of circumstances what is to stop a politician from pandering to the welfare class and the public servant class till the "new wealth" which you propose is extinguished.

Your heart is in the right place but your head is not.

PhilTheCapitalistPig| 3.9.11 @ 1:19PM

No, I'm suggesting that the retirees already in the system, and the ones approaching retiring age have some kind of safety net. Anyone with a large enough nest-egg outside of SS doesn't get anything. WE DON'T HAVE THE MONEY! Cut off age should be roughly 45. In others words, if you are under the age of 45 and you haven't begun planning for retirement, THEN WHAT ARE YOU WAITING FOR?!

In 20 years you can attain enough in a 401k with no employer match to retire on. Not comfortably, but you can retire.

Please cut out the fear-mongering. Do I want retirees to just die? Could you be any more irrational?

We end the program by stopping the entrance of new beneficiaries and take care of the ones who can't take care of self. Its the only way out.

If you want to force retirement savings, then do that. NOT A PONZI SCHEME. Either way, it's unconstitutional. Its forced commerce. All men should be able to spend the fruits of thier labor as they see fit throughout their lives.

Don't you think more people would be concerned with a retirement plan if they know there is nothing waiting for them coming from the government?

Aarradin| 3.9.11 @ 9:02AM

Who is opposed to Means Testing Social Security? The DEMOCRATS!

Why? Simple, once it is Means Tested it will no longer pay out to everybody, but everybody will still be paying in. Therefore, you create a large voting bloc that favors privatization/elimination of the entire Ponzi scheme.

By the way, Social Security is ALREADY a redistribution scheme. People at lower income levels receive far more in benefits than they ever pay in. The opposite for higher income people.

PhilTheCapitalistPig| 3.9.11 @ 9:13AM

Correction: Not even low income earners get what they put in.

I'm dead serious. you could make 7000 a year for your entire life and get about the right benefit.

Let's call a spade a spade here. This is nothing more than a trick to steal wealth.

Do the numbers yourself. Someone making 28,500/yr that only started to work at age 25 would have 4.4 million in the bank at age 65.

Do you understand how much wealth has been robbed from the citizenry? FICA tax is only taxable to (i think) $126,000 in income.

Nunya| 3.9.11 @ 11:30AM

I'm not sure what numbers you're using, my calculation of 7% of $28,500/year (i.e., $166.25 per month) compounded monthly at 8% only comes to $580,380 after 40 years. 12% gets me to $1,955,893.

Still, it's a helluva lot more than any of us will ever receive from Social Security.

PhilTheCapitalistPig| 3.9.11 @ 1:23PM

Honestly, its been about 4 years since I built the model on excel, so I'm recalling from memory. Do your calculations add the interest to the principle on a monthly/yearly basis?

PhilTheCapitalistPig| 3.9.11 @ 2:28PM

You're right. I went thru the first 20 years with those numbers again and that's not right. It was basically an investment calculator I built that measure different % of incomes and ROI %'s compounded yearly.

Those numbers might be for the max you can enter into a 401k.

Either way, Nobody is getting what they put into social security.

LiveFreeOrDie| 3.9.11 @ 3:37PM

FYI $200/ month x 20 years @ 10-12% avg = $1 mil, roughly. The hard part is getting 11% interest on your money. What the hell am I supposed to invest in? Stock market? No thanks, never again.

PhilTheCapitalistPig| 3.9.11 @ 3:59PM

That could have been from a different income as well. I might have done a more realistic number for median income around 45k. My long-term memory is failing me. lol

PhilTheCapitalistPig| 3.9.11 @ 4:05PM

I do know that the interest rate I had plugged was 8% and the % of income was 7%. If you build an excel model its pretty easy to figure out what the income level was by the principal values after 40 years.

I just don't feel like doing it again. I hated that class! :D

Au Contraire| 3.9.11 @ 9:15AM

I agree completely. Means testing is a huge step on the road to killing the beast.

Jack Olson| 3.9.11 @ 9:07AM

Kaminsky fails to mention that you get no income tax deduction for the employee's half of Social Security tax. Hence, to tax 85% of benefits means charging some taxpayers income tax twice on one-third of their benefits. First when they pay their payroll tax; again when they collect benefits.

He also omits that the article he linked to at the CBPP website concludes that the change under discussion, continuing to index lower benefits to wages while indexing higher benefits to pricing, is impractical.

Social Security will eventually be funded through general revenues and all pretense of it being a savings program will disappear.

squalis| 3.9.11 @ 10:12AM

I was thinking the same thing. Getting taxed twice on some income dollars. What makes this even more galling is knowing nearly 1/2 of this country pays no taxes at all. I wish Lucy would stop pulling that football away at the last moment! I feel like such a Charlie Brown.

Brumby| 3.9.11 @ 9:39AM

Mornin mates,
Down here we call it Superannuation, and our govs watch all pensions. What a mess! We have to watch em like eagles. But we all get back what we put in. We had a fling with givin anyboy who needed it some o the cash; but I'm not sure how that has worked out.

I also wanted to thank all you who helped me find the book. ( www.theozcruise.com ) I found me and me missus, and there's quite a bit in there. I wonder if any of ya can figure which bloke I am. I feel like some kinda movie star!

It's late and time for bed. Got a bit of a muddle tomorrow at the job, so it's off to bed. Cheers!

simon templar| 3.9.11 @ 3:30PM

Brumby..it really is great that you found us and talk with us here on this blog at TAS. Your perspectives and insights are appreciated. Hope all went well at work. Talk with you soon.

Paul J. Goodwin| 3.9.11 @ 10:02AM

Means testing is politically untenable. So a better alternative would be to use tax deductions as an incentive to those beneficiaries with other means and income, in lieu of SS checks. That is, to make them a somewhat better deal than they would get if they took their check.

This means that those who need the money would still get it, and those who didn't would actually gain a little by not taking their check and taking the deduction instead.

The second phase would be to migrate those in the system off the system, by giving them the option to divert the SS part of their FICA taxes to their IRA. To accelerate this, they could also deduct a second years' FICA SS payment, with their extra income directed to their IRA.

The third phase would be to limit new entrants to the SS system to only minimum wage employees with no other means of retirement.

Importantly, the loss of FICA SS revenues to the government would more than be offset by the economic stimulus directed to investment oriented taxpayers and their IRA accounts.

wukong| 3.9.11 @ 10:04AM

I've always resented the extortion of paying into Social Security from my first paycheck in July 1971. I am a career military professional with 20 + years of service and I draw retirement benefits from that service. Since I already draw federal benefits, I have always thought it wasteful to be forced to continue to pay into SS so as to be eligible for another Federal benefit program.

If there is one group of people that should be exempt from SS enrollment it certainly should be retired service member. This is double dipping by coercion

Brian Mc| 3.9.11 @ 3:57PM

And to make active duty service pay income tax is a slap in the face considering the sacrifices they make to ensure our liberties.

martin j smith| 3.9.11 @ 10:11AM

The average voter instinctively fears any change in Social Security. But this is a golden opportunity to have a conversation about it because everyone agrees that the ECONOMY is in trouble except for the psychotics with whom there is no hope.( these would be the ideologically driven Marxist who want our economy to collapse)
Above regarding Government Employees I talked about "fairness" and the notion of "shared sacrifice" These concepts can be applied to the DEBATE about what to do. I do believe most voters are willing to entertain the notion of "fairness" as long as it does start at top. The "DEBATE" should allow for ANY PROPOSALS
TO BE PUT ON THE TABLE. Then see which of those a ) will work and to what degree and b) which will be accepted politically.
BUT SOMEWHERE IN THIS CONVERSATION SHOULD BE THE QUESTION: HOW DO WE FUND SOCIAL SECURITY WHEN WE HAVE HIGH UNEMPLOYMENT. THE COCNEPT THAT MONEY DOES NOT GROW ON TREES SHOULD EMPHASIZED ALONG WITH THE FACT THAT UNLESS WE HAVE MORE EMPLOYED PEOPLE WITH SKIN IN THE SOCIAL SECURITY GAME THERE WILL BE BIG PROBLEMS.

VBMax| 3.9.11 @ 10:11AM

Don't know if anyone has noticed that the government has been playing their divide and conquer game again by encouraging a generational conflict over social security and medicare. This is, of course, to take the attention off of their own criminal activity in regards to the funding of these programs and the implementation of Obamacare. The younger generation will become zealots for death panels once they realize how indentured they've become to the seasoned citizens.

Dave Hanson| 3.9.11 @ 10:26AM

Wild Hair idea, from Outside The Box.
What's the fundamental assumption that everyone makes when considering the impossibility of continuing the program as-is?
**Assumption: EVERYONE WHO CAN, WILL CHOOSE TO TAKE THE "FREE MONEY". "I paid in for all these years, it's time for me to get back..." In other words, all perspectives assume VICE, to wit: complete human SELFISHNESS. [A fair assumption, mind you! Selfishness arises as part of Original Sin in the Garden. It's part of our basic--warped--humanity.]
The focus: "I, ME, MINE".
What about a different idea?
Leave the program as-is. But provide an "out" for those who will exercise a VIRTUE: SELF-DENIAL.
Let's offer older workers opportunity for patriotic SELF-SACRIFICE in this Time of Trouble, for the good of their children and our nation.
Virtuous thought: "I know I've been taxed these past fifty years, to pay for my [fill in blank, e.g. "Mom's/Dad's"] needs. And I know that if I claim the money now, I'm crushing the hopes of my children to get ahead, loading young workers with unbearable burdens for my own comfort, preventing them from forming families and having children of their own. This way, lies DEATH. So I won't do it! I'll keep on working!"
*Let's abolish the foolish term "retirement age", to get entirely away from the pernicious 1930s socialist notion of human "retirement" from productive work (better name: "wage age").
**Make a certain year of one's life the age at which all federal TAXATION CEASES on earnings up to the FICA/SE wage level amount (currently $106,800). Income and SE tax continue to be assessed on amounts above that sum.
=Biggest tax cut most people will receive in their lives: a reward for living long, and a further reward for working longer.
**This simple, easily-grasped, and *voluntary participation* revision to the SS Old Age segment accomplishes three worthy goals.
1) It reverses the "new deal" 1935 SS goal of bribing workers to get out of the labor force.
2) It recognizes, and goes some distance to restore, the natural social connection that 1935 "social[ist] security" broke: inter-generational family care, of adult children for aged parents and aging parents for children's opportunity.
3) It reverses the socialistic assumption of the 1983 "rescue" plan: EVERYONE in society MUST PARTICIPATE in the Plan. I.e., everyone in the society must get involved in the crime, get fingers sticky, so as to permanently lock in place the inter-generational extortion.
**If even ten percent of the 60+ workers and potential workers in the U.S. elected to NOT TAKE THE MONEY, and instead KEEP WORKING, TAX-FREE, we would see
1) Relaxation of actuarial pressure on the OASDI system, restoring it from current default status to at least nominal 'balance';
2) Considerable second-order economic growth effects from older people performing productive work in society--even if they don't pay taxes directly, their employers will pay on the gain they get from the wise older workers; and
3) Restoration of the concept of productive work (instead of the public dole) as a reason to live. Especially useful for lonely older, single people, as they'll have 'family' substitutes at their workplaces.
Comments?

WhiteBikerTrash| 3.9.11 @ 10:31AM

Social Security needs to be deconstructed!!
I was born back in 1957, I knew in the early 70s that there would be no Social Security for people my age.
It has been a Pozi scheme from the start and like any other Ponzi, it must collapse under it's own weight of promise!
Isn't this like saving an alligator hoping that it won't eat all of the children?
My suggestion, Freeze all admission to SS. Freeze all benefits. Make an offer to all people born between Jan 1 1945 through Dec 31 1960 you receive all of your "contribution" plus 2% per year interest in one lump sum, or collect SS at the frozen level after you reach eligibility age.
You must sign up for one or the other.
Stop collecting SS Taxes.
Return all SS contributions to anyone born between Jan 1 1961 to Dec 31 1970.
66% to Jan 1 1971 to Dec 31 1980.
33% Jan 1 1981 to Dec 31 1990.
none returned to Jan 1 1990 and later. The Government is now out of the retirement business! The returned monies will be spent or invested. People will take responsibility for their own retirement, or not!

This is one of the many reasons I never could be elected!

YeloStalyn| 3.9.11 @ 1:19PM

Pat the lump sum with what money?

Above I mention a similar concept that a) does not stop the funding (needed since there is no money to start with) and b) accomplishes the same thing by phasing out the program.

Granted, your plan would benifit me more since I would get, albeit, a small ROI (ha ha) but there is no money to pay me back with.

LiveFreeOrDie| 3.9.11 @ 3:42PM

With new, freshly printed money! Isn't that what all the bailouts have been? If it's good for the banks, automotive companies etc. that are, "Just too big to fail," then it ought to be good enough for the little peoples SS accounts, which is "Too important to fail."

WhiteBikerTrash| 3.9.11 @ 5:41PM

The obligation of SSI at this point is over 100 trillion dollars. Where will that money come from?
To implement my plan will cost under 35 trillion dollars. Which would you prefer to pay the interest on? Or our Government could just say "Yeah, we lied to and stole from you, but we'll provide health care for free, really!!

Ken Royall| 3.9.11 @ 10:32AM

SS is already a welfare program. The very first recipient got far more back than she paid in. Generally in a normal pension plan that is expected if there are real assets and the funds are invested. Such is not the case with SS. It is Ponzi all the way.

Al Adab| 3.9.11 @ 10:36AM

The long term solution is to maintain the mandatory deduction, but allow the individual to place the funds into a self directed IRA, 401 or other plan. They would then own the funds, have access to them at a given age of say 60 and have then available for retirement, medical needs, home settlements and other uses. Norhing wrong with people owning their own money. Additionally, think what the increase in capitalization of the economy would be. Business expansion would follow and best of all, the government would not have the funds to "redirect".

George S| 3.9.11 @ 1:10PM

How is a mandatory deduction into a private account different in concept than mandatory health insurance? They are both beyond the powers we delegated to the Congress. If people do not want to save their money -- or buy health insurance -- then the public should not assume the risk.

If we send our money to government -- for any reason -- it is not ours anymore. You are sending money to the Treasury without a contract between you and the Congress. That means it will be theirs to redirect. Eventually.

Al Adab| 3.9.11 @ 2:47PM

A mandatory action of any sort is, as you not, not authorized. We are simply looking for a way to end the government ponzi scheme and leave people in possession of their property, their money. The deductions as I posit them above would not remit to government but to a personally selected instrument be it an IRA, a 401, a mutual fund or even anuity. That way the dollars are in a sense deferred compensation paid back at a certain age with interest and earnings. Most citizens would find themselves with upwards of a million dollars for their own purposes upon reaching whatever age we select.

The problem underlying almost all of todays' issues is the welfare state which, as you also note, make the larger public responsible for others' irresponsibility. That is morally wrong on its face. Instituting a new mandate ala health insurance should be opposed. Were Social Security proposed today it should be opposed. Nonetheless, as it does exist today, rather than simply end it we can turn it to our individual (the key word) benefit through a system as I outline.

George S| 3.9.11 @ 3:27PM

It is an interesting concept: Congress mandates that employers withhold part of your salary to be deposited into a privately operated account in which you have sole legal holding. But if Congress cannot spend that money, it is of no political use whatsoever. Social security is all about buying votes, always has been, and Congress will make damn sure always will be.

Without the political incentive behind it, there is no reason for Congress to go through all that trouble. What happens to those who receive disability benefits? Where will that money come from if the private savings accounts are untouchable. And don't forget union and public sector retirement and benefits liabilities. Congress is eying a solution to that: confiscation of IRA's to be held and disbursed by Congress.

We simply cannot let one unconstitutional program be resolved by enacting another one. The only solution to social security is to repeal the program. But that is politically impossible. You cannot tell the people who invested in the program all their lives that they are cut off. If you promise to pay all present beneficiaries, you have to establish a cutoff for future beneficiaries. How can you draw that line? You are cut off but people born one year earlier are not?

And to top it off, what would be the reason to have social security numbers if the program is to be phased out? Try telling government that they must get used to not having the ability to track us down.

Al Adab| 3.9.11 @ 3:56PM

George:
We'll keep thinking it through. First, no employer contribution. Second Disability would allow access to the funds at any age. Third No numbers anymore. The actuarial numbers can provide the cutoff date/age. Yes one year is in and the next under the new non-government rules.

As we know, more government means less Freedom. Short of ending the program itself, desireable as that might be, it is as you write unattainable, what other than private retirement holdingts answers the question? In the ideal world all would provide for themselves and make no immoral clain against the wealth of others. However, we have so long been sold the bill of goods that we are "entitled" that the dilema needs response.

Help with the reasoning and we will find a way. Thanks for your comments.

Habu| 3.9.11 @ 10:43AM

The US Constitution as written, discussed, and past was a document to limit the power of what was being established, a federation of the states to replace the flawed Articles of Confederation. As initially presented it would not have passed without the promise of the immediate addition of what became the Bill of Rights. Those first ten amendments were the first order of business after the constitution was passed by the states. We need to look at the “takings” clause of the Fifth Amendment and then move to the 14th Amendment. Finally, a brief examination of the Ten Planks of the Communist Manifesto also is germane to this discussion.
The Fifth Amendment, as originally written, was only a restriction against the federal government. As was held in the opinion of Chief Justice Marshall in Barron v. Mayor and City Council of Baltimore, 32 U.S. 243 (1833), the prohibitions of the Bill of Rights did not apply to the States. While there were some limits on the powers of the States before 1865, it was not until the Civil War that the federal Constitution limited the powers of the state (and thus local) governments against their own citizens through the passage of the Thirteenth, Fourteenth, and Fifteenth Amendments.

The Fourteenth Amendment imposed restrictions on States through the broadly worded Equal Protection, Due Process, and Privileges and Immunities Clauses. The Slaughterhouse Cases, 83 U.S. 36 (1873) quickly eviscerated the Privileges and Immunities Clause. The Equal Protection Clause developed its own jurisprudence as to similar treatment of similar situations and was especially useful in ending state-sponsored racial segregation in Brown v. Board of Education, 394 U.S. 294 (1955). The Due Process Clause, evolved along at least three lines.
The Fifth Amendment:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation
So the issue of Social Security, the involuntary “taking” of our money under the ruse of investment for each of us, individually, is a violation of the “takings” clause of the Fifth Amendment since we do not receive anything approaching “just compensation”. There is an entire list of Supreme Court cases that have over the centuries “finessed” this issue but the intent of the framers of the constitution was plain…if you take it you pay for in a just and equitable manner. That does not happen with Social Security.
The 14th Amendment, relevant section:
Section. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law ; nor deny to any person within its jurisdiction the equal protection of the laws.
Due process, as has the “takings” clause of the Fifth Amendment taken a beating over the centuries by SCOTUS in its continued usurpation of judicial review of procedurally correct passage of the laws of our country. Social Security denies “due process” via a nullity that it is an ever changing charade on the citizenry. Where is the due process when your money is taken for one purpose and immediately spent for another? It is simply a mechanism for wealth transfer.
Finally a look at the Ten Planks of the Communist Manifesto to get our bearings on where we stand circa 2011. I will not list them all but give reference for your edification. The Communist Manifesto, written in 1848 by Karl Marx and Frederick, is the de facto handbook for Marxism. The basic idea is that the proletariat (“exploited” working class of capitalism) should rise up against the “bourgeoisie” (middle/upper class) and destroy capitalism, replacing it with communism where the “proletariat” would effectively rule. One of the objectives of communism is to eliminate economic classes and “level” the playing field by distributing resorces and capital. In the Communist Manifesto, Karl Marx lays out the following 10 steps to destroy capitalism
The relevant plank is number two:
2. A heavy progressive or graduated income tax.
Misapplication of the 16th Amendment of the U.S. Constitution, 1913, The Social Security Act of 1936.; Joint House Resolution 192 of 1933; and various State "income" taxes. We call it "paying your fair share".
The Ten Planks………. http://tinyurl.com/66gapba
It is apparent to many historians that the early 20th century love affair the USA had with Marxism has had a profound effect on all succeeding generation. I leave it to you to decide whether we are in need of the Jeffersonian “watering the tree of liberty from time to time”
For my part the erosion of the essence and meaning of the US Constitution has easily been proven and that the liberties we were guaranteed are now simply a chimera.

Nunya| 3.9.11 @ 12:20PM

Habu: Excellent post, very well written.

Habu| 3.9.11 @ 12:28PM

Nunya,
Thank you for the kind remarks. I could have written a book but whew, what a labor when most of us know intuitively that "something is rotten in the state of Denmark"
Best
H

Urban Shocker| 3.9.11 @ 12:30PM

Habu, I know you did a good deal of labor to produce what you did, which was excellent and very informative. Thanks

FarFarAway| 3.9.11 @ 5:37PM

Awesome job!

bill carson| 3.9.11 @ 11:23AM

I don't think the average American realizes how "means tested" social security already is. And it's a huge dirty secret if you look at some examples. Heck, look at mine: I'm a 60 year old male who retired at age 44 (relatively well off). Between myself and my employers, $88,000 was paid in. In two years, the government tells me I can get about $1,450/mo. If I wait until 66, it goes to maybe $1800/mo. My brother, age 61, has paid in about $240,000. Now, you'd think he should get something more than 2.5 times my benefits. Heck, no! His age 62 benefit is about $1,850. I forget the age 66 benefit but you get the point. The people who paid huge amounts into social security get more than guys like me, but no where near what they deserve. So don't believe any talk about how we "might" make benefits means tested. Ask around. Ask people how much they paid in and what their benefits are. Fact is, people who paid in relatively little come out like gangbusters while the biggest losers are people with good jobs who paid in the maximum over many, many years. Much better to have a few good years like me, then quit so you don't get screwed. With a non-working wife of 32 years who will "take over" my benefits after I die, I expect my account will be one of the few baby boomer accounts in which the benefits paid far exceed what was paid in.

I'm taking every penny because I'm still pissed about making 7 figures in 1993 and having those stinking Democrats passed a retroactive tax increase in August on my ass--after I'd made the big money.

Steve A| 3.9.11 @ 1:01PM

Bill, Serious question. What the hell do you do with yourself when you retire at 44?? Just curious.

Bill Carson| 3.9.11 @ 7:50PM

I have plenty to do. I never defined my life in terms of my work. All I ever wanted to do was make enough to get out of the work-a-day world. I like to travel, do handyman work around the house, golf and stuff. I have time for things like living and working in a hospice for 5 weeks straight run by the Missionaries of Charity (Mother Teresa's outfit) as a volunteer.

I've never lacked for things to do.

Darin| 3.9.11 @ 1:22PM

$240,000 paid in divided by $1,850 comes out to 130 months. After 11 years, your brother will have received all that he paid in. True, this doesn't factor in the opportunity cost of how much he could have made by investing the money himself. However, it shows that most people receive far more than they pay in.

Bob White | 3.9.11 @ 1:59PM

130 months is a long time when you're 62. How many 62 year olds live to be 73? Not all, that's for sure (my dad died at 63, a few months after his disability retirement).

And you can't blithely dismiss opportunity cost. That $240,000 invested in an index fund throughout the 80s & 90s would make a man a multi-millionaire.

Wayne | 3.9.11 @ 11:31AM

Means testing is a violation of the social contract. Now, what have we been told by the government? Supplement the social security with your own retirement vis-a-vis 401K or long term savings. Now means testing once again punishes the responsible in favor or those less responsible.

As I told my wife, they can do what they will. We will spend the first 20 years of our retirement running through our savings. Then we will just becomes wards of the state. Forget planning for the future.

Bob White | 3.9.11 @ 2:00PM

Granted it's a violation of an implied (but non-existent) contract. But so is demanding a higher tax rate from our kids than we ourselves paid.

Larry| 3.9.11 @ 11:34AM

With all due respect, Social Security has ALWAYS been a redistribution program. The lies that so many have fallen for is that the government takes (steals) your money and puts it into an account with your name on it. Bullsh*t!!

I just want what I've put into it with a fair rate of interest NOW. I don't want to collect a penny from the government when I retire. Let me manage my own money.

Al Adab| 3.9.11 @ 12:16PM

Right you are Larry, see my above.

LarryK| 3.9.11 @ 12:44PM

Larry,

That is not quite true. Social security was started as a Supplemental retirement income for working Americans. It was in 1964-65 that LBJ coveted the Social Security trust fund for his "great Society" programs to fight poverty.
Conspiring with house democrats and sad to say republicans, a law was passed to "open" the social security "lock box" and transfer those millions of dollars in the SS trust fund to the general fund,
throw in an IOU and grab all future payments to the SSI fund by inserting IOU's.

Well, LBJ fought poverty and poverty has won.
Now the SS trust fund is broke and the burden of all the entitlements packed into the "social Security" umbrella has bankrupted this country.

LBJ should be dug up and shot!

Timothy L. Pennell| 3.9.11 @ 11:59AM

What's wrong with MEANS TESTING?
Let me tell ya something. I am REAGAN CONSERVATIVE as anyone. I've been a one man Tea Party since 2002. I am a 54 Year Old Air Force Veteran 1975-1979. I was in the first wave of the ALL VOLUNTEER FORCE. I was PROMISED my Benefits. I gave up 4 Years of my LIFE, in return for a few paltry Benefits. And now, when I want to USE one of them - The VA HOSPITAL - for my Health Care, I'm being MEANS TESTED. And the CUT OFF is $30,000 a YEAR.
Are you F-ing Kidding Me?
Now, explain to me, again, why Soc. Sec. can't be Means Tested. And don't give me the; Because people paid in to the System" B.S.
I gave 4 YEARS OF MY LIFE!
What was that worth?
Apparently nothing.

LarryK| 3.9.11 @ 1:04PM

Timothy,

Your service was not for "nothing". The country owes our veterans a debt of gratitude and to keep the promises made for that service. What was done to you is un-American!

Darin| 3.9.11 @ 1:18PM

Yes, you were lied to. The politicians at the time knew it. They knew they were creating unfunded liabilities. In the business world, such would be cause for company leaders to be jailed. In Congress, they are reelected.

Quite simply, the country is broke. Past promises across the board have been revealed for the lies they really were. Now it's time to pay the piper and EVERYONE must pay a part.

- Phase out Social Security. There are plenty of private savings and investment options.
- Phase out Medicare and Medicaid. Private charities can pick up the slack. The American people are generous to a fault, and private organizations are vastly more efficient than the government.
- Decrease retirement pay and benefits for all government employees (military too). One-time reduction of 5% with future increases slightly below inflation levels for a period of time (maybe 5 years). After that increase can be no larger than the rate of inflation.
- Reduce pay levels for current government employees (exempting the military). One-time reduction of 3% should be painless. Freeze increases (including military) for 2-3 years and then increases slightly below inflation for a period of time (5 years as above).
- Eliminate ineffectual government departments. Dept of Energy, Education, HUD, Homeland Security are good targets. Phase them out and work lateral transfers of people or buy out those close to retirement. Short-term cost may be higher, but long-term savings are big.

Bob White | 3.9.11 @ 2:02PM

Excuse me, but the 4 years of service is worth something, but hardly a lifetime of medical treatment.

Peppermint Tea| 3.9.11 @ 12:13PM

What wrong with means testing? The moral hazard that it will pay to be poor.

IMHO, the coming hyperinflation will "solve" the problem, not Congress. The SS administration will keep sending checks in worthless dollars, while the real trade will be made in gold, silver, or another currency.
The important question will then be whether we rebuild another ponzi scheme, tax for welfare benefits, or live and let die.

LarryK| 3.9.11 @ 12:30PM

I don't give a rat's patootie how much money someone has. If they paid into sociable security, then they deserve to get what's coming to them regardless of the size of their bank account. If they want to give the money to someone less fortunate than them, it's their decision to do so. The Government needs to get the hell out of micromanaging society based on some twisted, sick, and un-American philosophy. Ok I'll call a spade a spade! LIBERALISM!

It will be the death of us all!

Lord Karth| 3.9.11 @ 3:48PM

One robbery does not justify committing another.

Doh| 3.9.11 @ 8:41PM

What are you smoking?

Darin| 3.9.11 @ 1:04PM

Quite simply, Social Security needs to end. Means-testing should be one component of that end.

Also included is the raising of the retirement age, phase-out of Social Security paying non-retirement items (e.g., benefits to widows and children), phased elimination of the tax (no change for those 50 and older, gradual elimination as you get younger, no tax or benefit for those under 25), and so forth.

The program is not sustainable. It is flat out immoral and unethical for the government to take from one person and give to another (individuals are always free to do this IF THEY CHOOSE). Politicians of all stripes have knowing lied over the decades and deliberately stolen Social Security payments to pay for other things they want. The "government bond" left in place is just kicking the obligation down the road, as every rational person knows.

Social Security must end.

Michael L. Hauschild| 3.9.11 @ 1:17PM

David Broder just passed.

Oldefarte| 3.9.11 @ 1:20PM

SS was created by the Roosevelt administration as a FORCED RETIREMENT PLAN for working Americans, as many of them [particularly lower lever income producers living paycheck to paycheck, with little/no private savings accumulations]. As such, each SS recipient/beneficiary has, through a lifetime of payroll/income deductions, PAID FOR their SS benefit received ONLY AT AGE 65. SS is NOT a governmental gratuity or welfare payment received, but instead a REPAYMENT OF THEIR PREVIOUS LIFETIME CONTRIBUTIONS [with the government acting as a savings/retirement enforcer]. Working Americans DO NOT have the option of refraining from /declining participation into the SS system, but rather are FORCED BY THE GOVERNMENT INTO PARTICIPATION in same. For the government/liberals/Democrats to now contemplate the EXTORTION/STEALING of SS from workers who have paid into the SS system, in order to use their owned funds for budget balancing/debt reduction purposes or to fund other WELFARE GOVERNMENTAL PROGRAMS [ie healthcare, etc] is nothing short of LEGALIZED THEFT [and hopefully the current and future SS recipients will file some sort of class action lawsuit against the government, if these corrupt liberal Democrats become successful in beginning such an assault upon the SS system]. SS should be considered a seperate and distinct fund from the government's general funding, and as such, should be considered NON-TOUCHABLE by these bastards. If any of these fools want a quick and easy solution to the current SS underfunding liability, then the answer is [1] force the government to immediately REPAY the $1 trillion in SS funds that have previously been stolen [borrowed] from same [2] eleminate the current $100000 ceiling on wages/income subject to the SS taxiation and [3] immediately make the SS trust fund untouchable by greedy/corrupt politicians in the future!!!!!!!!!!!!!!!!

XYZ| 3.9.11 @ 6:23PM

WOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

George S| 3.9.11 @ 1:30PM

What's wrong with means testing? The answer is in why there's a cap on social security taxes. The program was meant to be a retirement income guarantee for working stiffs so as not to repeat the Great Depression's wiping away a life time of savings. But that was beyond the power of the federal government -- unless it was a tax. But people would not go for a tax increase, and the poorer folks still had pride about not accepting handouts. So the program was sold as a benefit program that only workers paid into (hence the cap). The only beneficiary are the workers -- who get their money "back".

By means testing, FDR knew that meant 'welfare' and his program would have never got off the ground. In order to collect the taxes from everybody, then everybody had to be a beneficiary. Collecting money to pay for means tested people is a tax -- a capitation -- that would have been unconstitutional. It would have to come out of the general budget, and that presented the problem of future Congress voting for higher federal income taxes.

Instituting the means test now relieves the burden of capping the social security tax. Two things can happen: the political forces can align behind the taxpayers or the recipients. Either way, it will make things worse. Higher taxes or reduced benefits are two things politicians hate choosing.

PhilTheCapitalistPig| 3.9.11 @ 2:00PM

"But people would not go for a tax increase, and the poorer folks still had pride about not accepting handouts."

Imagine that.

David Thomas | 3.9.11 @ 2:38PM

Means testing social security is the ultimate sin tax on industrious self-reliance.

WM| 3.9.11 @ 7:13PM

No, the ultimate sin tax on industrious self-reliance is Social Security itself. It allows people not fiddle around all their lives and not have to bother saving for their retirement.

You who support wealth redistribution have no right to oppose means testing. If Social Security should be preserved because people need it, then on what grounds do you oppose means testing, which is specifically designed to preserve wealth redistribution to people who really, really need it?

Social conservatism fail.

Oldefarte| 3.10.11 @ 11:29AM

HUH?????????????

Renyard Morgan| 3.9.11 @ 2:49PM

As distasteful as means testing is to me as a conservative, I would go for it in return for legislation to phase out Social Security over the next 25 years or so. In other words I would go along with a short term income distribution plan but not a long term plan.

PhilTheCapitalistPig| 3.9.11 @ 4:01PM

Dittos

Oldefarte| 3.10.11 @ 11:33AM

As a current recipient, I don't give a rat's ars what they do with it.........AS LONG AS THE GOVERNMENT FULLY/COMPLETELY RETURNS TO ME EACH/EVERY DOLLAR OF WHAT I PAID INTO THE SS SYSTEM OVER 35 YEARS PLUS INTEREST UPON SAME PLUS THE MARKET VALUE OF THE ALTERNATIVE INVESTMENTS THAT I COULD HAVE MADE WHICH WOULD HAVE NOW ALLOWED ME TO BE LIVING IN A $1MILLION HOUSE IN HAWAII RIGHT NOW!!!!!!!!!!!!!!!!

simon templar| 3.9.11 @ 3:20PM

I am not sure what infuriates and disturbs me more...the deception, corruption and theft of the social security program or the attitude we hold in most of us at the start of this new century. This attitude seems to express the belief that this is just too be expected, nothing can be done about it, and just get use to it. This level of cynicism, impotence, and acquiescence is not what our founders dreamt of when they created this Republic of free men. If we do not knock this shit off we are doomed. We can then all sit here and blog about Kadafi, Sheen, and the lastest distraction while the Republic burns. We seem to lack the general common sense and intelligence to solve any problems..everything is weighed in cynical political terms..this group..that group, this lobby, the media reaction...on and on. No clarity, no leadership, no ideas, no balls, just endless reactionarism, self promotion, whining, divisiveness. Why do we love Ronaldus Maximus? Because he was one of the few us that had some balls, clarity, and the will to do something....that being something that which everyone thought could not be done. We are craving that leadership like a man dying of thirst. We are really not looking for him but trying to find own lost selves. A man like him comes once a century. So, stop looking for him. Start leading, start once again believing that we ARE AMERICANS and we can solve these problems. This is the real fight, the real test, and this is what will bring us down or raise us up.

simon templar| 3.9.11 @ 3:25PM

If you agree with me then shout it!

PhilTheCapitalistPig| 3.9.11 @ 4:03PM

AGREE!

John Carnal| 3.9.11 @ 3:43PM

Social Security is now and has always been a redistributionist welfare scheme. It takes money from one generation and gives it to the next with the understanding that every succeeding generation will be forced to do the same. There is no contract between today's contributors and any legal entity. Just a statute which can be changed via politics. If you're getting a Social Security check you are on welfare, period. You are at the mercy of the political class. Where is the freedom in that?

Intelligent Design| 3.9.11 @ 6:03PM

That's right, it already is redistributionist. Those who earn less and therefore pay less SS taxes receive proportionately more in monthly retirement payments than those who earn more and pay more SS taxes.

The entire SS system should be dismantled. Shut it down to any new participants, and allow everyone to opt out effective July 4, 2011. Those who opt out will receive a lump sum payment equivalent to the sum of their "contributions" plus employer "contributions", plus a nominal rate of interest (e.g., 3%) since inception, less any retirement payments already received. Most workers not already retired would opt out. After about 20 years there would be no one left and SS could be given a decent burial.

Oldefarte| 3.10.11 @ 11:44AM

And you are FULL OF EXCREMENT! I and every other SS recipient PAID INTO this system forcibly by our payroll deductions mandated. We DID NOT have a CHOICE to either pay or not pay, but were forced into compliance by the government. If [alternatively] we would have been allowed to opt out of this arbitrary system [and instead seek alternative investment solutions for our contributed amounts], many of us [myself especially, based upon my ability to make profitable investments with my SS deductions instead] would be extremely wealthy at present from same. Granted, SS was established as a forced savings/retirement plan for the mostly indegent population, BUT there are some of us that could have used the deducted/contributed amount to alternative make profitable investments for ourselves and our families. You obviously are totally ignorant of what constitutes WELFARE [which is the giving of governmental payments/benefits to indigent recipients who HAVE NOT PAID FOR SAME; and SS recipients have PAID FOR THEIR BENEFITS]. Grow a brain!!!!!!!!!!!!!!!!

Lord Karth| 3.9.11 @ 3:47PM

Let's cut the self-deception. Social Security is an intergenerational act of war----mass theft on a monstrous scale.

None of this "means testing" namby-pambyism either. Let's do the only morally appropriate thing: Eradicate it.

Now.

No more spending on the program, no more taxation to pay for it.

Starting now.

And if the Boomers/Silents don't like it, tough for them. They bought into the lie---let them pay for their folly.

Your servant,

Lord Karth

Oldefarte| 3.10.11 @ 11:48AM

Grow some brain cells, please! Fine, eradicate it BUT BEFORE THAT'S DONE, FORCE THE GOVERNMENT TO FULLY COMPENSATE THOSE OF US WHO HISTORICALLY OVER OUR SUBSTANTIAL WORKING LIFETIMES PAID INTO THIS SS SYSTEM PLUS INTEREST PLUS ALTERNATIVE INVESTMENT VALUATION. Until then, GTH!!!!!!!!

Slacker In Chief| 3.9.11 @ 4:21PM

Social security already is welfare and is already means tested. For heaven’s sake it is even defended as a safety net. The metal gymnastics we go through to pretend Grandma isn’t receiving welfare is amazing!
You pay someone else when you’re young and collect from someone else when you’re old. That’s called redistribution. Be it from rich to poor or young to old it’s still redistribution. If you live to be old you collect more than someone who dies young. That’s called luck. It’s not an entitlement, contract or coerced savings because Congress can change your benefits on a whim. Redistribution +/- luck +/- what Congress decides you deserve = welfare for some and a dry screwing for others.
And it is already means tested! Die at 50 and the benefits your spouse is eligible for depends on their age and how much is in their own SS account. That is means testing.

Oldefarte| 3.10.11 @ 11:52AM

Okay, moron, the same principle applies to your BANK ACCOUNT, if you have one, since you deposit money into a bank, they invest/spend same and then are legally required to repay you said amount if/when you demand same. Ss is the same thing. Grow a brain, it ain't WELFARE, since it's PAID FOR BY IT'S RECIPIENTS!!!!!!!

Schmidtyfi| 3.10.11 @ 12:06PM

It's you who needs to educate yourself on SS.

Yes, you paid taxes into a system called SS. Those taxes went immediately to a retiree - they weren't invested in your name and you have no legal property right to any of the money you paid (so says the Supreme Court).

Your analogy to a bank account couldn't be more wrong.

Yes, it sucks. That's why SS is such a farce. But, you didn't 'fund' your SS benefits with the money you paid into it anymore than you funded those benefits with your income taxes.

But, to call someone else a moron when it is you who are demonstrably ignorant on this issue needs to be called out.

Thomas Paine| 3.9.11 @ 4:36PM

I'm gonna put my union-"thinker" hat on and focus SOLELY on my own selfish interest:

A big part of my business (investments) is retirement planning. Do you realize how much money I'll make using offshoring and trusts to hide (eliminate from AGI) wealthy seniors' investment incomes??? This means testing could be a goldmine for me!

Please, no criticism ... just thinking of myself. Screw the country.

(Union hat off)

Non sequitur dept: The $105 billion snuck into the healthcare bill -- THIS gives the best leverage ever for the showdown. Cut it out (say, until SCOTUS rules) as a part of the DEBT CEILING bill. If Obama won't sign it, wants to deal with issue, he can live on $200 billion a month.

Also, please urge all to stop talking about "$61 billion in cuts" and start saying "reduce spending from $3.5 billion this year to $3.44" ... I think that's a better message.

Petronius| 3.9.11 @ 4:38PM

The most insidious attribute about Social Security is the Progressive's motives for instituting it. It empowers government to control the ability of the average wage earner to accumulate wealth and financial assets under the guise of protecting him from himself should he become a profligate wastrel. These same pharisees in and out of government want prohibition of private ownership of firearms for the same reason. They view the citizen as an idiot and an entity to be subjugated. The myth they constructed for the proles blew up in their faces during the 80's. Peter Brimelow wrote a Charticle column in Forbes during the summer of 1985 exposing the payout differentials of Social Security payouts compared to the Civil Service Retirement System with C.o.L.A's. He followed that piece with a comparison of payouts from Social Security and an IRA where he proved an actual loss of 6% of principle paid into Social Security while the IRA yield would allow distributions up to $5000 a month with the principle remaining intact to be passed on to heirs. The public became incensed that the average Federal Retiree drew more after he quit working than during his career. And it really hit the fan when people found out that Congress instituted it for themselves to begin with because they knew Social Security was a losing proposition and a bad deal. So they grandfathered the Civil Service Annuitants and changed the law. From 1/1/85 Federal employees went into the new Federal Employee Retirement System with half of their retirement deduction going into Social Security, while the general public remained captive to it as Congress kept raising the earnings ceiling with no cap on the 1.7% Medicare Tax which doubtless will get hiked again big time. Our infantile electorate could care less. No change is acceptable to them while they believe that even 1 cent of FICA Taxes collected would not be available to pay their benefits. So any prospect for partial private accounts is right out. The break point is long passed, but to many are blind to it. The backbone of Atlas is broken.

AJ| 3.9.11 @ 6:33PM

I can't comprehend this attitude at all. Except that I'm younger than the author and most of the people posting here. What conservative has been under the illusion that they're "paying into" a retirement fund? Who is uninformed enough at this point not to know that payroll taxes have never been treated as anything other than general revenue. Ronald Reagan brought up that subject 46 years ago in his "Time for Choosing" speech. It has never been a personal savings fund. Why continue the illusion? Furthermore, why would any conservative object to shrinking the spending of an entitlement program? I thought we believed in safety nets, but not one-size-fits-all programs. Do we need to force everybody into nationalized health care in order to expand coverage? Why do we need everybody in Social Security?

In the long run, means testing (if it goes deep enough) will allow for substantial reduction of the payroll tax. Who cares if the program becomes more "progressive" if it shrinks dramatically in the process?

Besides, we all know the Baby Boomers will not see an ounce of their benefits cut. It will never happen. The changes will only apply to those younger than you, who you never gave a crap about anyway, after you're long gone. I'm glad that this is finally on the table. It should have been done a long time ago. Give it to people who desperately need it, don't let the little old ladies resort to dog food, but leave everybody else out of it.

Oldefarte| 3.10.11 @ 12:00PM

Fine, abolish it, but first pay me/every SS contributor the market of the totality of my contributions! Fix it by [1] force the government to pay back into the SS trust fund the $trillion that it stole/expropriated fraudently from same [so that they could fund their housing/food/transportation welfare schemes] [2] eliminate the salary/income cap of $100000/year and make any/all income subject to this SS tax; OR ELIMINATE IT [with the above condition only]. TAKE YOUR CHOICE!!!!!!!!!!!!!!!!!!!!!

Eddie Willers| 3.9.11 @ 7:01PM

The day Social Security benefits are means-tested is the day any self-employed person who hasn't already done so incorporates and pays himself a salary below the Social Security maximum while paying himself the rest of his income as a dividend (where state law permits). This will affect Medicare as much or more. The projected revenues from means-testing will not materialize, and voter support for Social Security will dramatically diminish as well.

Thom| 3.9.11 @ 7:44PM

“Besides, we all know the Baby Boomers will not see an ounce of their benefits cut”

Can you back this up with actuarial math to support your statement? No.

“In the long run, means testing (if it goes deep enough) will allow for substantial reduction of the payroll tax. Who cares if the program becomes more "progressive" if it shrinks dramatically in the process?”

If you understood how the current system actually works now you wouldn’t make such an uninformed statement. It is already quite “progressive” in its redistribution scheme. What you and many others don’t grasp because you have never actually looked at how it works on its “progressive scale” is that the current average pay out is a minimum wage existence and a full one third of current recipients don’t have any other income (as Social Security defines income). Under that proportion, the bulk of those making more than a minimum wage when they reach retirement are already subsidizing those at the minimum defined benefit and that 12.4 % isn't covering the bill now because there aren’t enough “workers” now and into the future to pay for this. What you think will solve this problem is quite mathematically impossible because even if you only pay that bottom one third a minimum wage existence as is the case today you will still need a sizeable portion of that 12.4% from everyone to cover even that. Try doing a little research into what the actual income range in is for the payout is before you jump on the “means testing” bang wagon here. What you suggest is in effect that the two thirds of the Baby Boomers who pay for the lower one third several times over just get nothing at all from what is often 45 years or more of work and paying the above tax rate for most of it. Those who get more of of Social Security than they pay in love "means testing".

Oldefarte| 3.10.11 @ 12:06PM

True, agree! I get a meager amount but still IT IS MY MONEY, and until [which is never] I'm repaid [1]the totality of my lifetime of contributions/deductions [2] interest upon same [3] the market value of alternative investment gains from the totality of my contributions; I demand to be repaid my meager SS amount each month until my death. If I ever receive 1,2, & 3, I'll gladly allow the government to stop paying me any more SS checks!!!!!!!!!

Thom| 3.10.11 @ 5:15PM

Oldefarte, I agee but there in lies the rub, the current rate of 12.4% on current and future workers won't pay the current bill on 43 million. What do you think 78 million within a decade or so is going to require? Statistically, I won't live long enough to get back the unadjusted for inflation amount I will pay into this system (a little less than $300,000. That's the trap of it and there are no easy solutions or clean solutions the way the current program is structured and without gorging somebody's ox.

WM| 3.9.11 @ 7:08PM

This column is evil. Social Security IS a welfare/wealth redistribution program now. It does not take your money and give it back to you later in life. It takes money from the working young and redistributes it to the nonproductive old, whom the young do not even know. The money that old people are getting now is not from themselves, having been kept it some sort of bank account or investment fund. It is from their children and grandchildren, taken in the form of involuntary taxes. Don't pretend otherwise.

Notice the reductio ad absurdum of Kaminsky's position: Means testing is wrong because it involves redistribution of wealth to people without money, but there is nothing wrong with Social Security in principle, because it involves redistribution of wealth to people who DON'T need it.

Making little arguments about how hard the old had worked all their lives, or how they are getting the shaft under means testing, is a fundamental evasion of this fact. Social Security is evil. It should be abolished in as painless a manner as possible.

It is not conservative to support wealth redistribution, and I will not let anyone get away with grandstanding over conservatism while they support wealth redistribution.

Ross Kaminsky | 3.9.11 @ 8:29PM

My article most certainly is not a defense of Social Security, which clearly is redistribution. It was about the politics of means testing.

Thom| 3.9.11 @ 9:33PM

Ross, an article illustrating the "math" of Social Security would go a long ways to dispelling the many myths of what Social Security is or isn’t, should be etc. I’ve looked into it. Pure Marx at the core and until enough people understand the true nature of the ponzi scheme and who the winners and losers are because of this system you aren’t going to get beyond the emotion of the topic. At the heart of the Social Security system is everything Marx wanted and got with the progressive income tax system on the front side of wealth generation. This link helps a lot http://www.justfacts.com/socialsecurity.asp but one good chart showing the full range of income levels going into SS and the benefit level coming out speaks for itself and why the system is everything people mean when they call it a ponzi scheme.

SchmidtyFi| 3.9.11 @ 11:24PM

WM is spot on. Amen, brother.

*shakes head in disbelief* at Kaminsky. You need a long, clarifying piece, that demonstrates some understanding of what WM says. Because, honestly, I'm fuming that I find such economic illiteracy at AS.

Your article, absolutely, was a defense of the illusion that SS is not already a welfare system, but rather a retirement fund. Why? Because of the mistaken popular misconception that it is a retirement fund? What an idiotic thesis.

God help the GOP in 2012.

Oldefarte| 3.10.11 @ 12:10PM

Before SS is eliminated, it must repay the totality of contributions/deductions into its system, OR A HUMONGOUS CLASS-ACTION LAWSUIT FROM SAME WILL BE FORTHCOMING AGAINST THE GOVERNMENT!!!!!!!!!!

Thom| 3.9.11 @ 7:24PM

Social Security has always been a redistributive scheme from day one. It has always been a welfare system for a sizable portion of those that receive its benefits. To one degree or another it has always used a form of means testing in its ponzi scheme. Here is the formula for the means testing: “from each according to his “means” to each according to his “needs”. Some animals are needier than others.

A full one third of current recipients have nothing but Social Security and the average annual payout is a minimum wage job existence. Every person receiving benefits above that average amount is getting less per dollar paid in out of it than those below it. A person who enters Social Security having met the minimum requirement of 10 years of wages and just $40,000 of taxable income over those 10 years or has never risen above minimum wages for the bulk of their life will get essentially the same level of existence on Social Security. It is a very good deal for the lower one third of the economic scale. Every other person above that will subsidize that with a decreasing payback from what they paid in. The average wage earner today is already robbed of the bulk of what they paid in long before they have to worry about what is left being taxed away because of other income they’ve built over a working life. Those at the top of the Social Security tax window are already robbed of the bulk of their benefit before the rest is taxed away. I’m nowhere near the Social Security wage capture max window 7 years out from my full retirement age of 66 years old. Bill Gates and Warren Buffet would already get less than I’m going to get after the bulk of their benefit is taxed away and I’m only going to get about 50% of my post tax wages before they start to tax away my benefits due to my pension and investment income. It serves the Marxist class warfare interests to talk about “means testing” but the truth of the matter is, those above the maximum taxable amount today don’t get enough from Social Security to be measured out of the total paid to those below that max. What Marxists really mean when they say “means testing” is simply to remove the max income capture window and take the full 12.4% of their income and then simply not provide any benefit at retirement (or as is the case now little to nothing anyway). It has always been about robbing the rich and giving to the poor for votes.

As long as Social Security is a “defined benefit” plan (vs an individual investment system) it will remain a ponzi scheme, encourage a welfare class existence for a sizable portion of our population and be unsustainable. As long as it rewards sloth and pays those that contribute next to nothing to it a benefit far and away more than they ever contributed to it will remain a dagger thrust at the heart and soul of this nation’s founding principles. Like its twin sister, Medicare and the purely welfare based Medicaid system, once these two get finished robbing the so called filthy rich of their wealth followed by making it impossible for most to rise above the middle class what will remain won’t be called American even by those that have benefited the most from what has always been built upon a rather thick stack of lies and contradictions of basic actuarial math.

For evil to succeed, all that is required is for “good men” to do nothing……I once read. Between 1935 and today there has been a rather drought of “good men” in this regard. The truth of our entitlement nightmare is ugly and most people simply don’t want to deal with the truth.

Long before King ObamaCare’s police haul off Grand Paw and Grand Maa to the Soylent Green recycling factory to save the Medicare/Medicaid ponzi schemes, an entire generation or two of grandparents, parents and children are going to be at each other’s throats because no one wants to deal with the math of all this. You can thank the generous contribution made to the dumbifcation of this Nation by the Public School system for much of this. The Public Sector Union thugs’ current behavior is just the tip of the Iceberg “right ahead” in this pending Titanic adventure. The math does not lie and “good men” seem to have a problem with that.

Oldefarte| 3.10.11 @ 12:19PM

True, mostly. Abolishing SS would be the simple solution, but the government has to reimburse all contributors for every dime of their personal deductions into this system first. It was established as FORCED SAVINGS/RETIREMENT vehicle by the government originally, since most people-morons do not have the dedicated ability to provide for their own retirement savings on their own. They'd rather blow their money on the latest [worthless] cars, trucks, boats, houses, vacations, technological gizmoes, etc and end up pennyless at 65 [with nothing to show for a lifetime of work]. In essence, most people are.........STUPID!!!!!

Thom| 3.10.11 @ 5:19PM

Not most statistically but somewhere between a third and half is fairly close to the figure. There is correlation between those who don’t pay any meaningful income tax over their life and those that don’t save or invest anything at all for retirement over their able bodied life…… I’ll leave it at that.

David| 3.9.11 @ 7:29PM

Mitch Angoop, may God bless you and give you and your family His peace, comfort, and joy.

David| 3.9.11 @ 7:30PM

Mitch Angoop, may God bless you and give you and your family His peace, comfort, and joy.

David| 3.9.11 @ 8:12PM

I am as furious as everyone here about social security. Don't expect any fixes until we fix, and HERE I GO AGAIN, fix the EITC (Earned Income Tax Credit). That must be done away with if we are ever to stop the redistribution of wealth scheme started by the fed government decades ago.

Several years ago, I had to work some very long hours in a trial that lasted more than 3 months. One month I worked 351 hours, made "x" number of NET dollars. The following month I worked exactly 300 hours and my NET was ONLY $200 less than the previous month when I worked 51 more hours. That means I earned about $4.oo per hour for those additional 50 hours the previous month. That really hurt to see the tax code work that way for a PRODUCTIVE member of society.

So, back to this issue in the tax code. The EITC is a freebee to all lower income earners. Those not motivated to work more than 40 hours per week, or work a part-time job in addition to their full time employment, and in general those not motivated to make any better financial life for themselves and their families.

That huge amount that I paid in extra taxes for working that additional 51 hours was paid out to people who pay ZERO federal income taxes. Anything they paid in fed income taxes they receive back at the end of the year IN ADDITION to a check that can vary from $1,000 to more than 4,000 depending on the number of children one has.

Remember, this is not money targeted for food, housing, medical care, etc. It is a cash gift to the unmotivated in society to do with whatever they please.

Millions of people get an EITC check every years. Do the numbers.

Why should I or anyone else have to pay an exhorbitant amount of taxes for working so hard only to have it STOLEN from me to give someone else who is content with his/her financial situation?

STOP the EITC now. This is an issue the Tea Partiers to to jump on. Most people don't even know what the EITC is. That is sad.

SchmidtyFi| 3.9.11 @ 8:35PM

I don't agree with the author, at all.

Just because people think it's a savings or retirement account doesn't make it so. The fact there's no deferred consumption from a capital structure perspective (i.e., money is not actually invested in productivity enhancing, longer term, projects) means there is no economic growth built into this horribly flawed system -- people should NOT expect to gain more than they put in.

So, whether you like to call it so or not, it is very much a welfare system already. It's just that the winners and losers are harder to identify than a normal poverty-based metric.

Right now, it's a welfare system for affluent white married women: they live longer and work less than (for example) poor black men.

As the author notes, properly identifying SS as a welfare system will increase opposition to it. And, that's a good thing, isn't it?

As a conservative, young(ish) (35) person, I believe recasting this atrocity as a proper welfare system is not only essential to our fiscal health, but a more honest approach to what the system actually is. It disgusts me that my upper-middle class mother-in-law is, essentially, taking money from my wife, myself, and her grandchildren -- and doesn't need it from a livability perspective -- and feels entitled to it even though she "earned" this by marrying a husband that happened to pay into the system and die relatively young.

I believe that conservatism is based on truths -- sometimes painful, but truthful. Liberalism is based on beautiful lies.

Let's call this thing what it is. A disgraceful lie.

Oldefarte| 3.10.11 @ 12:24PM

The translation of this [Right now, it's a welfare system for affluent white married women: they live longer and work less than (for example) poor black men] is that the former is INTELLIGENT whereas the latter is ..........STUPID! The operative word is that SS payments are PAID, and therefore not......WELFARE!!!!!!!!!!!!!!!!!!

David Lehner | 3.9.11 @ 8:35PM

I got my first summer job in 1971. I was very excited until I looked at my first paycheck: it wasn't anything close to what I expected. I asked my dad what all those deductions were, and he patiently explained each item. When we got to Social Security I asked him what that meant, and to this day I remember exactly what he said: "Well, that's a program whereby the government supposed to take your money and hold it and then pay it back to you after you retire, but I wouldn't count on it, because you're never going to see a penny of that money." That was the FIRST THING I ever heard about Social Security. So I've never counted on it. I may retire comfortably or I may retire poor: anything can happen. But I thank my dad everyday (he's no longer with us) for setting me straight about Social Security right from the start.

Oldefarte| 3.10.11 @ 12:26PM

If the government is ever forced to pay back the $trillion it has stolen from the SS fund, your dad's [similar to many of ours'] prediction will have been proven to be false!!!!!!!!!

JPM77| 3.9.11 @ 8:43PM

I'd like to submit, that in the short term having Social Security become means tested might be bad as you are I think right concerned about. But think about the long term ramifications. Welfare is not generally popular, people look down on those who collect it. If Social Security is transformed into another welfare scheme via means testing, it might be the catalyst to break the delusion that it is anything other than welfare. At that point, the argument can become, lets just remove it entirely, allow for personal savings accounts instead of the ponzi scheme, and roll the welfare aspect into actual welfare. Personally, I can't think of anything that would be thankfully more persuasive in helping to get rid of it down the line.

SchmidtyFi| 3.9.11 @ 11:07PM

Agree!

Oldefarte| 3.10.11 @ 12:30PM

I'll agree to abolishing it IF the government pays me back the totality of my contributions into its system plus interest plus alternative investment value. Again, it is not WELFARE, since its recipients PAID FOR SAME. Welfare is the government providing benefits to recipients who have NOT PAID FOR SAME, ie affordable housing, food stamps, public education, mass tranportation, etc. Know the difference!!!!!!!

JPM77| 3.10.11 @ 7:21PM

Wrong, you have not "paid" for anything, you were taxed, and your income was redistributed away from you to others on a vague promise to pay it back later, specifically the elderly at the time you were working. The Supreme Court has already ruled this is not a contract which can not be violated (FLEMMING V. NESTOR 363 U.S. 603), your benefits can be changed at any time.

This is why it is so vitally important to change this law so that welfare recipients are just receiving welfare and everyone else IS actually paying into retirement accounts for themselves.

This is welfare, despite what delusions you want to operate under. You were forced, unfortunately, to have enough of your income redistributed away from you to others that you weren't able to put that towards your own retirement, and now that money you feel you are owed (and I understand why and why that causes such anger) is being redistributed away from current workers to support you. It's welfare. But place the anger where it belongs, to the leeches that decided to deprive you of the ability to save for you own retirement rather than those who want to break this system of abuse.

We aren't looking to destroy your ability to live, I for one do not want to restrict the ability of people who are drawing off Social Security to draw from welfare if they need it to live, but the delusion that it is anything other than welfare needs to be broken.

Your money was taken from you, you have no contractual right to getting it back, you are only getting it back as a redistributive welfare payment. That a wrong was done to you does not mean it needs to be perpetuated indefinitely.

SchmidtyFi| 3.10.11 @ 8:49PM

well said.

Nite| 3.9.11 @ 8:52PM

This is a program for rich white women who hardly worked? What utter trash! I have worked all of my life. Now I am retired and sick with a small pension and a little SS. There are three ways to fix SS with out a redistribution of SS moneys. One take off the upper cap of who pays in to SS. Two, do NOT allow Congress to put the extra SS moneys into the general fund and spend elsewhere, which has been occurring for over 40 years. Keep the funds strictly for SS use. The third is to slowly increase the retirement age unless ill. These three things would go a long ways to increase stability for many years.

SchmidtyFi| 3.9.11 @ 11:06PM

Yes, demographically speaking, SS is a welfare program for affluent white women. That's a fact. Deal with it.

Taking the "cap" off SS contributions just makes the welfare more "progressive". That is redistribution, defined. Strike one.

If Congress doesn't put the money into the general fund, what would it do with it? I know you don't know the answer. Strike two.

Increase the retirement age unless ill. I see. So, skew this sick welfare system even *more* in favor of affluent white women.

SS is an economic atrocity. We absolutely should turn it into a welfare system. If you need welfare, then apply for it. And don't kid yourself that it's anything other than welfare.

Oldefarte| 3.10.11 @ 12:36PM

No, Smidty, again know the difference between WELFARE and RETIREMENT SAVINGS/SS [see my above]. And again, if abolishment is the answer, then everyone's contributions/deductions must be repaid by the government, WHICH WOULD/SHOULD BE AGREEABLE BY MOST EVERYONE !!!!!!!!!!!

Schmidtyfi| 3.10.11 @ 3:10PM

It's you who is ignorant on this issue.

The money you paid in was not saved. It was immediately given to someone who was retired. Let that soak through your thick skull.

As for your 'right' to what you paid in, and your absurd legal claims to that money, I suggest you look up Flemming vs. Nestor, 1960.

The whole point of the SS debate is that it IS NOT a retirement fund.

Knucklehead.

Schmidtyfi| 3.10.11 @ 3:12PM

And, I probably need to add, because you're obviously not the brightest bulb: the money we've all paid in CANNOT be paid back without bankrupting the country *because it has already been spent*.

Oldefarte| 3.10.11 @ 12:32PM

Absolutely agree. Finally someone here with a brain!!!!!!!!!!!!

Oldefarte| 3.10.11 @ 12:39PM

Geez handbags, I guess that my graduate business school education must have made me uninformed as to SS' retirement fund status. Read the GD SS legislative original bill passed in the 1930's and become INFORMED!!!!!!!!!!!!!

Kingofthenet| 3.9.11 @ 11:22PM

It ALL depends at what one thinks the Social Security IS, it is similar to Healthcare in that regard. IF you consider BOTH to be 'Safety nets' so people aren't left with NOTHING, than it is a sort of 'Self Funded' welfare program. This is what it SHOULD be. IF like most Republicans you believe it should be a GREAT program for Everyone, covering EVERYONE and EVERYTHING, than yes BIG changes need to be made.

Dee See| 3.9.11 @ 11:31PM

---"Free Trade, Globalism, EUGENICS
(---and we might add TREASON) are always
intertwined. ALWAYS."
-ALAN WATT
(essential listening online)

Globalist RED China enablement, sellout,
halocaust concealment -------and NOW
RED Chinese 'eugenics realism' here at home?

HUAC meets NUREMBERG 2012 ---will make
1945 look like a a baby shower!

WE CAN'T WAIT!

AJ| 3.10.11 @ 11:30AM

The key phrase in a lot of these posts is "paid in". "I've paid into Social Security my whole life!". You haven't "paid in" to anything. You've been taxed, and the government has spent that tax money like every other tax dollar. SS is not a retirement fund. It is not a pension plan. It never has been. It has always been a welfare program.

You call yourselves conservatives, and all of a sudden you sound like any left wing interest group demanding their goodies from the government.

Oldefarte| 3.10.11 @ 12:42PM

Then what is your BANK ACCOUNT, moron [since the bank has already SPENT your deposited money 5 minutes before you deposited same]. What a idiot!!!!!

Schmidtyfi| 3.10.11 @ 3:18PM

The bank didn't spend your money. They may lend it out, but you still have a legal claim to it.

You have no legal property right to SS (Flemming vs. Nestor).

Since your fixated on this absurd bank analogy: it would be analogous to you going to a brick building, thinking it was a bank, handing them your money on a promise (no contact, no nothing) that they'd pay you back. And, then that person not lending it out, but rather giving it to someone else with the expectation that enough suckers down the road will walk in, like you, and do the same, sufficient to cover the promised 'return' on your funds.

There's a name for this game: a Ponzi system. And, it ultimately collapses because the math is impossible in the long run.

Oldefarte| 3.10.11 @ 4:17PM

Moron, Re-read my attached Wikipedia description of the SS fund below ['....Because under current federal law these securities represent future obligations that must be repaid...']. UNDER FEDERAL LAW.....FUTURE OBLIGATIONS....MUST BE REPAID! God, what stupidity. It's a GD [in accounting terminology] an ACCOUNTS PAYABLE and a LIABILITY. It ain't WELFARE, STUPID!!!!!!!!!!!

SchmidtyFi| 3.10.11 @ 4:39PM

I did read your Wikipedia entry. I suggest you do, as well:

"The controversy over its meaningfulness is a topic of the sustainability of the unified Federal budget."

And

"Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt..."

Under CURRENT LAW. But, they can (and MUST) change that law because the money IS NOT THERE.

What's more, the IOUs in that account are not Treasury Bonds. They are *non-marketable* securities.

Maybe the Heritage Foundation can get through to you where I can't. Try this -- he uses relatively small words. I think you might be able to read it.

http://www.heritage.org/resear.....ally-works

I really hope you're just a troll -- if not, you crack me up. Calling people that actually know the system inside and out stupid (when you've brought the equivalent of a 3rd grade understanding of its economics).

Good day. And, please take your meds. Seriously.

Erik Osbun| 3.10.11 @ 1:04PM

It would work only if the Liberals would keep their hands off the individuals' SS payments and turn over management of the SSA to a proven successful investor, like say Peter Lynch.

Oldefarte| 3.10.11 @ 1:17PM

The following is from Wikipedia's description of SS. Some/most of the comments above are truly STUPID, and their issuers simply need to learn how to read and to think before opening their mouths ignorantly:

".....The Social Security Trust Fund is the means by which the federal government of the United States accounts for excess paid-in contributions from workers and employers to the Social Security system that are not required to fund current benefit payments to retirees, survivors, and the disabled or to pay administrative expenses.
The trust fund contains the securities that will be redeemed to make benefit payments in the future when contributions derived from payroll taxes and self-employment contributions no longer are sufficient to fully fund then-current benefit payments. (The controversy over its meaningfulness is a topic of the sustainability of the unified Federal budget.) Paid-in contributions that exceed the amount required to fully fund current payments to beneficiaries are invested in securities issued by the federal government. The securities issued under this scheme constitute the assets of the Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt.[1] The portion of the national debt that is not considered "publicly held" represents the obligations incurred by the government to itself, the bulk of which consists of the government's obligations to the Social Security Trust Fund....."

GET IT.........OBLIGATIONS [as in Accounts Payables, Liabilities, etc???????????

Schmidtyfi| 3.10.11 @ 3:26PM

Now, I'm just sad for you. You are really, really, in the dark on this.

Yes, the SSA has bonds in an account. Those bonds will be paid back by the Treasury. The Treasury gets it's money from taxpayers.

Now, tell me, genius: if the 'assets' are backed by taxpayers, and taxpayers would cover the gap if those assets didn't exist anyway, what difference does the asset make? None.

Think about that before you say something stupid, again.

I get it. You want your money. You feel ripped off. Well, you should. Thats the whole point of the debate, you knucklehead.

Oldefarte| 3.10.11 @ 4:11PM

You COMPLETE DUMBARS, $1trillion dollars HAVE BEEN STOLEN [and replaced with government IOU's] by the you's GUVMENT. Why?.......so they can continue to FUND AID TO DEPENDENT CHILDREN, AFFORDABLE HOUSING FINANCING/CONSTRUCTION, FOOD STAMPS, FORIEGN AID TO ISLAMIC TERRORISTS DICTATORS WITH SWISS BANK ACCOUNTS, FINANCING OF PUBLIC UNIVERSITIES THAT GRADUATE MORONIC SOCIALISTS MORONS [ie YOU no doubt] THAT ARE UNEMPLOYABLE BY CORPORATIONS BECAUSE THEY'RE TOO STUPID, AND CONTINUE TO SPEND MORE MONEY ON THIS CRAP THAN THEY COLLECT FROM TAXPAYERS, that's why. You obviously have about as much sense of finance and economics as a JACKARS EATING BRIARS. Grow a brain!!!!!!!

Thom| 3.10.11 @ 5:45PM

Oldefarte,

$1,092,000,000,000. This is the current annual SS cost at the current annual payout average if all the Baby Boomers retired today. You would have to raise the SS tax rate from 12.4 to around 22% to cover that today. It gets worse because the average payout today is a function of the average life time income produced two and sometimes three generations in the past and the Baby Boomers average payout is going to reflect our average life time wage and the average annual payout is going to be a lot more than the current $14,000. My average life time wage will in fact be close to the average national wage today thus my projected annual payout will be twice the current average payout thus that Trillion dollar figure will be closer to two Trillion dollars when the Baby Boomers fully retiree. When people speak in terms of "unfunded liabilities" this is what they mean. Where is the trillions to fully fund the average Baby Boomer SS and Medicare bills going to come from? The only power the government has at this point is to raise the tax rate to levels that dwarf the average income tax amount paid in this country today; lower benefits making the benfit worthless for most who have paid the bulk of funds into it or just print money with nothing backing it to honor the "debt" which will devalue the dollar and make what they pay you fiat money anyway. No easy solutions here. Sombody is going to lose here and from my research it is either going to be those that get more from the system than they paid into it or simply stealing it from the upper 9% of income tax payers that have some relief from this ponzi scheme. That latter option can be avioded by numerous devices and has a very negative consequence to the overall wealth generation of this Nation.

There are no silver bullets at this point in time, maybe a couple decades ago something constructive could have been done but Congress set this up and who has controlled Congress over most of the last 75 years?

Oldefarte| 3.11.11 @ 11:45AM

Let me clarify....I am neither FOR nor AGAINST continuing SS. What I'm saying is that IF IT IS DISCONTINUED, then each/every contributor to same MUST BE REPAID/COMPENSATED for their lifetime of payments into the system. To maintain it will require [1] force the government to PAY BACK the $trillion it has confiscated from SS and [2] eliminate the $100000 cap/ceiling on wages/income subject to the SS tax [3] make modifications to the SS system regarding its recipients that are necessary, ie maximize collection period based upon years contributed, raise elligibility age, etc!!!!!!!!!!

Darudz| 3.10.11 @ 1:49PM

I would give up my SS benefits if the govt. would let me convert my IRA to a Roth account with no tax penalties. This is basically a self administered, voluntary means testing plan which may help save Social Security. And I would have more money to spend.

Neb| 3.10.11 @ 11:54PM

I read through this whole comment thread. Lots of great posts, really well thought out responses, ideas, and theories.

And one idiot. The only reason I'm posting is because people like this drive me nuts, I've run into too many of them. They don't give a damn what happens after they die as long as they get their check. Because it's "their" money.

Since all the intelligent posts don't seem to be getting the message across, let me try the short and sweet version:

Hey, "Oldefarte". It ain't your damn money, old man. It's mine. Get a job.

Oldefarte| 3.11.11 @ 11:49AM

Hey [moron] NEB, I had a GD job [for 35 years] until I retired, fool! Also, due to my contributions, IT IS MY MONEY, DUMBARS. GO TO HELL AND STAY THERE!!!!!!!!!!!!!

Oldefarte| 3.11.11 @ 11:51AM

PS---NEB: It's MY MONEY because I FU*&ING; '''''''EARNED IT''''''''''', DUMBARS!!!!!!!!

Oldefarte| 3.11.11 @ 1:21PM

PSII: Hey GENIUS/NEB, got news for you. It AIN'T yours until age 65-67, or until DISABILITY[' "Oldefarte". It ain't your damn money, old man. It's mine. Get a job'], but in your obvious case [DISABLED...... INTELLIGENCE], you may in fact now qualify for SS benefits [unless of course, you maintain your current Mickey D employment status]!!!!!!!!!!!!!!

The Bruce| 3.11.11 @ 2:43AM

SSI has always been a ponzi scheme. Just look at FDR's words after its passage. Back then, most people never lived long enough to collect.

And that "lock box" has been dipped into with every single administration, starting with the very one that created it.

And to think that Bernie Madoff was thrown in jail for committing a crime that, by DC political standards, has been perfectly legal. Simply amazing.

I'm sure Madoff oozes with envy when contemplating the scheme the government's managed to cook up.

rajo394| 3.13.11 @ 12:09AM

Eliminate the present income tax have a flat tax of 11%. We can eliminate the FICA and Medicare payroll taxes and corporate taxes. People over 30 can elect to stay in the present social security system or quit and start their own retirement account, similarly with medicare. Those under 30 and those who forgo ss and medicare will not be taxed on the first $5,000 contribution to private retirement plans and Health Savings Accounts with catastrophic insurance. Also there could be a tax exemption of $3,000 for each child. No other exemptions, credits, etc. We could easily take care of SS, Medicare, Obamacare, the IRS, etc. in one shot. 11% on all income regardless of source or personal assets. Everyone will have proportional "skin" in the game. It is really not that hard to fix our problems if their is a will and some guts.

rajo394| 3.13.11 @ 12:11AM

One further comment, I too have be forced to contribute to the ponzi scheme for many years. Let us not waste our energy complaining but changing things for future generations.

Sara Baker| 3.14.11 @ 9:59AM

Rather than accept the mistaken perception of Social Security as a savings plan, why not challenge and correct it? Your failure to do so is a huge failure.

Prof Watson| 3.25.11 @ 12:32AM

All it takes is to increase the payroll tax by 1% for employee and employer. Social Security now has enough to pay out 100% for the next 30 years and then 75% there after. Cut 50% from the $1trillion national security state budget and that will solve the deficit problem. Less Empire, more nation. Borders, Language, and Culture folks.

Grandinquisitor| 5.27.11 @ 7:33PM

If Social Security is to become means tested then it will look just like the earned income tax credit only for retirees. The government deciding who gets what. The problem here for Republicans is that in doing so they change payroll taxes into nothing more than income taxes. This in turn takes away all arguments for having an earnings cap. Essentially you would have a wage earner making $106,000 per year paying the full 12% payroll tax on all income while someone earning 100 million would not. This would create a very highly regressive income tax where the middle class ends up paying a much higher tax rate than the very rich. Should be fun to watch Republicans grapple with "to each according to their need".

Christian Louboutin | 6.23.11 @ 6:09AM

The fact that it's seen as a savings plan, that it has been seen as such for at least a generation despite two Supreme Court rulings that Social Security payroll taxes are not savings, not investment, not insurance, indeed not anything other than another tax levied by government, suggests that means testing in any substantial way will require jumping a substantial political hurdle.

Creative Recreation | 8.11.11 @ 2:04AM

is good

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