Social Security and Medicare spending

[dugog55]

I keep seeing pie charts on Federal Govt. spending. Why are Social Security and Medicare even on that chart? Everyone pays into those accounts their whole lives from their paychecks. It is a separate tax from Fed. Income tax. If they are separate accounts funded by a separate tax, why is it listed as a spending item? Not only that, some of us have to pay Income Tax on money that we had set aside to supplement our retirement years.
Al Gore was right, SS should have been put in a lock box. Everyone made fun of that statement, now look where we are. And if the SS fund is running low, either increase wages across the board so people help fund it more, or, increase the limit where SS stops being paid. Personally, I think the lack of good paying jobs is the biggest issue. That, and apparently Congress has been tossing our SS funds into the general tax fund and spending our money on stupid $35B jet fighters.

[Emile]

1. Increase the cap, problem solved.

[WmChris]

5. Yes

I've been in this camp since at least the mid eightys. I was meeting the cap in November and noticed that the difference between when I was paying in and after I met the cap didn't amount much. I thought then that removing the cap would insure the program longevity.

[Silent Type]

7. That'll work when we get a Democratic Prez and huge majorities in the House and Senate. Ain't gonna happen

beyond some small increase in cap.

Obama tried to address this, even proposing an increase in benefits for those on the low end of the scale. Democrats bashed him and called his attempt the "Catfood" commission. He never tried again.

[AverageOldGuy]

14. Yes increase the cap

[choie]

2. That, and the fact that people with incomes over a certain amount

don't pay higher social security taxes.

[Silent Type]

8. Because they don't/won't get higher benefits, for one reason.

[dugog55]

20. Yes, but, the high salaried people

also have cushier jobs in an office. They can work and wait until they can get full SS and probably collect for longer too because of their easy jobs. Working class people on the other hand, retire when they can and take reduced benefits because their bodies and or minds are wore out from crappy, hard work conditions.

[Silent Type]

22. People die at their desks too. But you have a point.

[love_katz]

3. Al Gore was right.

Pukes dip into the fund by using it to forward their bullshit illegal wars and horrible economic policies.

If they had been prevented from getting their greedy paws on the funds, it would have been solvent for the foreseeable future.

As someone once commented, the oligarchs figure that they don't need us anymore and they aren't even willing to let us live out our low income lives and die with dignity.
No matter how much wealth they suck up, it is never enough for them. They want to snatch up every penny so they can trample us into the dust.

[Captain Stern]

17. That just isn't true.

The money that the Federal Government borrowed for Social Security is being paid back as we speak because the contributions being made to social security today are smaller than the amount that social security is paying out in benefits.

At the rate we are going, all of the money that was borrowed (plus interest) will have been paid back by around 2034. And if nothing is done before then, some really hard choices are going to have to be made.

[snot]

6. K&R

!!!

[Dave says]

9. Recall the 1983 fix to keep SS whole for 75 years

Thank Greenspan and Reagan. The increase in tax and making it taxable was going to keep SS whole until the 2050s. Naw, they were kidding. Instead they set up a slush fund for Republicans and Democrats alike. Here’s how it works.

First, by design, SS is a pay-as-you-go system. Payroll taxes in go out the door to pay benefits. It does not dip into general revenue funds at all. Yet. But because of the numbers of baby boomers, at the pre-1983 tax rates there would not be enough SS funds coming in to pay projected benefits. So Greenspan/Reagan raised the SS tax rates for the purpose of building a trust fund that would cover the population blip. The boomers paid into the fund over the last 41 years.

The Trust Fund, by design, is invested in Special Treasury Bonds that pay 2%. So, until the Trust Fund is exhausted, one of two impacts on the budget is the 2% on $3T or whatever the balance currently is in the Trust. The second part is our government treats the trust as revenue, diminishing the size of deficits they report, allowing steeper tax cuts for the rich with less noise from us proles.

The third part, and by far the more troublesome part for the oligarchy, is paying off the bonds as they mature. At maturity, the cash is used by Social Security to continue paying benefits without interruptions. However, this portion of our benefits come directly out of general revenue, leaving less money for Starlink, less for Tesla, and less for additional tax cuts. Thus the attack on social security by the oligarchs.

The solution is to restore democracy again. Reverse Citizens United and elect the next FDR. I don’t know any Democrat that is FDR-like at present. But that is what we need.

[NotHardly]

10. Require EVERYONE to contribute to SS regardless of income/wealth... everyone

[Igel]

18. That would mean bye-bye CalPERS.

CalPERS is one of the largest non-federal pensions in the country, and it has a political bias when it comes to investing.

Same for a lot of teachers union pensions or state government pensions. DCPs are functionally equivalent, and if you merge them you may get their resources but you also get all their obligations. And since a lot of pensions are massively underfunded, that's not a good thing for SS.

[The Madcap]

11. What angers me

is that I keep hearing that certain individuals want to end Social Security and Medicare. They already destroyed pensions. They don't want to supplement the only thing left (IRA's and 401K's). They have no published plans to improve/replace/supplement the system.

My take is that we'll see another increase in the full retirement age (probably to 69 or 70 years old) and Medicare replaced by Medicare Advantage.

That would fulfill the dream of certain R's of having a long-term captive workforce and a fully full-profit health care system.

If I were under 50, I'd flee that for Europe in a heartbeat.

[state of stupid]

12. A good question

That pie chart you see causes a ton of confusion. That came about because of the unified budget
bill passed in 1968. Before that there were two pie charts, one for Social Security and Medicare and
the other for discretionary spending (your 1040 form taxes). To understand it all is a long complex
study that will take more courage to fix than most if not all of our elected officials have. It will also
take We the People actually sitting down and listening and learning how it all actually works. It is not
one fix to the solve the problem because it is two separate problems that each require their own fix.

[SleeplessinSoCal]

13. I just received a text message that seems suspicious.

Posting it here:

"You have a new message in my Social Security at https://secure.ssa.gov/RIL. Msg freq. varies. Msg & data rates may apply. Reply HELP for help, STOP to cancel."

[sinkingfeeling]

15. It's the notification that your 2025 statement of benefits is ready. Got mine last week.

[SleeplessinSoCal]

16. Thanks.

[vapor2]

21. Got the same msg but had trouble logging in to login.gov

Thanks for clarifying this msg!!

[Igel]

19. It's merged for a sense of proportion, if nothing else.

And they're separate income taxes--that's all the tax that Congress has the authority to impose. It's just a specially-earmarked income tax with a different set of rules. But when you hear somebody say that we spend more on defense than X, it pays to have a handy chart that shows how much the federal government spends on X.

Since there are only income taxes and SS and Medicare are federal expenses, they belong on that chart and to leave them off helps confuse people. Calling some "income tax" and others "payroll" tax also obscures that they're both really taxes on income. One kind is fixed and flat with a cap; the other kind is fairly progressive with earned income credits, refundable and not, and a tangle of exemptions. The "payroll" taxes are on unadjusted gross income, as far as I'm aware (at least as far as I've personally run across as a taxpayer).

Also because when it comes to budget deficits, while they haven't been adding to the deficit (until they go in the red) they have been adding to the debt. Why? Because on paper their trust funds are assets held by the government that are simply paid out as their trust funds are liquidated--the asset is transferred on the books of the government from one agency to another agency, all neat and internally tidy. But since that liquidation is done without cash to pay for those reimbursements and following disbursements the only source of cash is debt--meaning that the government-internal debt becomes publicly held debt.

[Martin Eden]

23. Because the funds were not placed in Al Gore's "lock box."

I'm not joking. Gore was ridiculed for that in the 2000 election, but it was a damn good idea.

Instead, our SS funds were treated like an open cookie jar which GW Bush raided with his wars of choice & tax cuts for the rich, then by Trump's tax cuts for the rich.

Republicans are NOT fiscal conservatives. Their strategy for decades has been to "starve the beast" of funds, which means driving up budget deficits. They know it's nearly impossible to destroy popular programs like Social Security and Medicare by direct assault so they point to the national debt they purposely helped create, then pretend to be responsible conservatives and argue this "spending" can't be sustained. Hard decisions must be made on "entitlements."

These hard decisions NEVER include rescinding tax cuts for the rich to put the cookies they stole back in the jar.

Those cookies were paid for by you and me and every working American with deductions from our paychecks throughout our working lives.

This is nothing less than a transfer of wealth from the vast majority of regular folks (including Trump voters) to the fat cats who fund the political careers of these "fiscal conservatives."

THIS should have been a core element of Democratic messaging for decades.

The People need to understand that Republicans are stealing their cookies.