A solution to keep Social Security solvent

[BrianL306623]

We recently received an email from AARP requesting us to email Congress for the continued funding of Social Security. While this is a worthwhile endeavor, it does not provide a solution and who knows how many folks will actually send the message. So, I am advocating for AARP to be more proactive in how they and their members reach out to Congress. AARP should have some political clout and therefore should use it to our advantage. The unions would be another avenue to pursue!

There is a report authored by the Congressional Research Service titled, “Social Security: Raising or Eliminating the Taxable Earnings Base”. This report (https://crsreports.congress.gov/product/pdf/rl/rl32896) was updated on December 22, 2021. The conclusion of this report is as follows:

“Raising or eliminating the cap on wages that are subject to taxes could reduce the long-range deficit in the Social Security trust funds. For example, the Social Security Administration's Office of the Chief Actuary (OCACT) estimates that phasing in an increase in the taxable maximum (for both contributions and benefits bases) to cover 90% of covered earnings over the next decade would eliminate nearly 20% of the long-range shortfall in Social Security. OCACT's estimates also show that if all earnings were subject to the payroll tax, but the current-law base was retained for benefit calculations, the Social Security trust funds would remain solvent for about 35 years. However, having different bases for contributions and benefits would weaken the traditional link between the taxes workers pay into the system and the benefits they receive.”

In 2022, the maximum Social Security tax - formally called the contribution and benefit base, and commonly referred to as the taxable earnings base or the taxable maximum - was $147,000. It is currently $168,600 and going to $176,100 in 2025. Since 2009, the annual salary for Congressional members is $174,000 and for the Speaker of the House: $223,500, the Majority Leader: $193,400, and the Minority Leader: $193,400. This means even Congress has not been paying their fair share into Social Security.

I am but one person and AARP is millions of people. Will everyone please get this word out?

[RaymondO668575]

Keep a watchful eye on these senators. 

 "The 20 GOP senators that voted against the Social Security bill"  voted against legislation approved by the Senate late Friday that would bolster Social Security benefits for more than 2 million American citizens working in a range of occupations. 

[WebWiseWoman]

I'm going to communicate several personal experiences which some may find offensive given the current political climate; I do not apologize but hope everyone who reads will at least be receptive and understand...

I first worked at 13 for my step-dads biz for maybe allowance money, opening mail, answering phones, etc., along with Mom who was in charge. Then when I was 8 or 9, "agents" showed up and said SS wage taxes must be paid for my and my brothers $1.25 or whatever per week...

Once graduated HS, I found employment with a major company; great fun but lecherous terrible environment; which is what drove it into bankruptcy; unfortunately our last paycheck and "RETIREMENT" investment fund were GONE!

Even better, another retirement fund, Caesars Entertainment, was bought out by the "Kmart of casinos"; the depleted our investments and rode off into the wind...

So, part of ensuring Social Security Retirement should absolutely be ensuring other "retirement" items are real and undeniable, and never just gone...

[GailL1]

@WebWiseWoman 

Since 1974, we have had the Pension Benefit Guaranty Corporation -it was founded at the same time as ERISA - Employee Retirement Income Security Act (ERISA), the foundation for a sound and workable pension insurance program that guaranteed workers' benefits in private pension plans.

I don’t  know your dates or companies but it might be a good idea to explore the Pension Benefit Guaranty Corporation - and see if you might have some pension funds just sitting there because they have lost track of you.

About PBGC  and  specifically - PBGC.gov - Workers and Retirees 

I know that Cesears Entertainment and the PBGC have had several law suits in the not so distant past - so depending on the circumstances, you may be able to find some of your previously invested funds.

USA.gov- How to find Unclaimed Money from the Government  

Merry Christmas ~

[RodericoA348152]

I agree with you. What is AARP doing actively in Congress to protect our earned benefits? When Trump takes over and his allies who are hell bent on ending Social Security, Medicare and more, we are dead. What is wrong with these people and why isn't AARP front and center protecting this? How about some Action?

[RaymondO668575]

"You wrote, " How about some Action?"

Reminds me of a a JFK speech.  "Ask not what your country can do for you but what

you can do for your country" 

What can you do?

[RickS467730]

I understand your frustration, but it’s important to clarify that while there are concerns about potential changes to Social Security and Medicare, the idea that Trump or his allies are determined to "end" these programs is not accurate. Trump has repeatedly stated that he wants to protect Social Security and Medicare, though some of his policies, like proposed budget cuts or payroll tax reductions, have raised concerns about their long-term funding.

That said, it’s important to note that payroll tax cuts would primarily affect future funding for these programs and wouldn’t directly impact those of us currently receiving Social Security or Medicare benefits. The programs have trust funds to ensure payments for current beneficiaries, but any changes to payroll taxes could have long-term implications for future recipients.

As @BrianL306623 has pointed out AARP just wants us to flood emails to congress without any real direction or any opinion of their own. 

[BrianL306623]

@RodericoA348152 while I may not agree with your sentiment about the incoming administration wanting to end SS because I have not seen anything concrete attesting to such, I disagree with ending the taxes on tips and SS because those funds go to the SS trust funds.

As for AARP, that is a good question. All they do is send emails and ask us to send something to Congress. I have tried to connect with the AARP marketing on LinkedIn yet nothing!

[RaymondO668575]

""incoming administration wanting to end SS "

Did you look at the Republican Senators who voted against the recent

Social Security Fainess Act? They would be worth following.

I imagine one could write a letter to a Senator or House Rep and mention they

are a Member of AARP and that would add clout to the letter with the popular

AARP brand.

As I mentioned in another post. We need not ask what they can do for us, but what we

can do for them.

-rko

[RickS467730]

I get why this vote is frustrating—it seems like a no-brainer to support Social Security benefits, especially for people like teachers and firefighters who’ve been affected by the Windfall Elimination Provision and Government Pension Offset. But the situation is a bit more complicated.

The bill, called the Social Security Fairness Act, would repeal those provisions, which is great for the people impacted. But it also comes with a big price tag—about $200 billion over the next decade—and could speed up the depletion of Social Security funds by six months. Some of the senators who voted against it said they were worried about how this would affect Social Security’s long-term stability and the federal budget.

I don’t think their vote means they’re against Social Security itself. It seems more like they’re being cautious about the financial impact and looking for a way to balance helping people now with keeping the program sustainable for the future. It’s definitely something worth keeping an eye on, though, because everyone deserves a fair shot at the benefits they’ve earned.

[RaymondO668575]

You wrote, "It seems more like they’re being cautious about the financial impact and looking for a way to balance helping people now "

This may be true if things like the tax structure stays the same. But it is not staying the same, With "Project 2025: which guidleines will be filtered

in after the new President is sworn in will result in the tax structure changing drastically.

Namely that the ultra-rich will have a huge tax cut and the middle class taxes

will go up.  This will result in less money going into social programs like Social

Security and Medicare. 

This is the realistic impetus of these 20 Senators to freeze social security progress now so they can dismantle it later.

You wrote,"I don’t think their vote means they’re against Social Security itself"  but that is a passive term, you really are not sure of their motives. 

Hence the need for more research on the voting records and comments of these 20 senators.

-RKO

[RickS467730]

It’s amazing how misinformation gets spread. Trump has publicly denied knowing about or agreeing with Project 2025. In fact, he has distanced himself from those associated with it.

That said, it’s still important to focus on the specifics of this vote. While some senators may have broader policy goals that concern you, others might have opposed the bill because of its immediate financial impact—like the $200 billion cost over the next decade and the strain it could put on Social Security’s solvency.

From what we’ve seen, these senators tend to vote along the lines of less spending. Their voting patterns often reflect fiscal conservatism, which may explain their opposition to this bill.

As for the claim that the ultra-rich will get a huge tax cut while middle-class taxes go up, it’s important to clarify that during Trump’s first term, his tax cuts benefited individuals across all income brackets, not just the ultra-rich. The Tax Cuts and Jobs Act benefitted most individuals in many ways. Social Security and Medicare, which are funded primarily through payroll taxes, would not be directly impacted by income tax changes. Any significant tax reform would need congressional approval and would be carefully debated to ensure it doesn’t harm these vital programs.

That said, any further discussion about taxes should be moved to another thread, as this one is focused on Social Security and Medicare.

[RaymondO668575]

I believe we need a watchdog on Congress and Senate on this issue.

I've formed an editorial team, now we need researchers to share

fact checked data.

We can start with AARP by writing an article that will bring in more talent.

Anybody here submitted an article to AARP? If so, did it get published?

-rko

[BrianL306623]

Yeh, where is Ralph Nader when you need him not that he really made a difference? He turned 90 this year.

Editorial team with MoveOn?  Fact check what? You might find a lot of good information in this thread posted by @GailL1 & @Tonster521.

There are 3 pages of conversation and contributors to this subject.

[RaymondO668575]

CheckYouTube for the Ralph Nader Radio show although he is not championing

Social Security, for that you are better with Senator Elizabeth Warren. 

With our editorial team we are taking stock who is championing what issues.

Fact check whatever we are writing about, lest the writer look like a fool. I personally like PolitiFact for the purpose of fact checking.

-rko

[GailL1]

https://community.aarp.org/t5/Social-Security/How-to-Improve-Social-Security-s-Minimum-Benefit-AARP-... 

I did not see anyplace in these reports on how to get any Social Security revenues to cover what they would like to do with this minimum benefit - especially since it would also be linked to these folks retaining their Supplemental Security Income and thus their linked Medicaid.

It is always easier to give stuff and pay for it later - or never.  Many Americans live this way - why not government programs too.  The BIG CREDIT CARD in the Sky - maybe China will lend us the money.  NO - we don’t have to do that - we can just tax the rich.  

[BrianL306623]

@GailL1 @Tonster521 @RickS467730 @sktn77a @MichaelM873962 Well, the B@$t@rds did it! 😞 

Senate approves bill to expand Social Security to millions of Americans - CBS News

[MichaelM873962]

This is progress but we still have to win two major fights.

1. The long term full solvency issue.

2. Republicans plan to gut SS to pay the debt created by tax breaks to the rich.

[GailL1]

@BrianL306623 @Tonster521 and anybody else - 

I thought I would give you this link to the tool at this website - I have no idea if it is correct in present time - but it is interesting to test out any theories.

Committee for Responsible Federal Budget (cfrb).org- THE REFORMER - An Interactive Tool to Fix Socia... 

Some types of analysis have already been done and can be referenced on the page too. 

[BrianL306623]

@GailL1 That is an interesting tool. UNder my plan, Social Security will be sustainably solvent for the next 75 years and beyond. Here are my inputs:

• Slow Benefit Growth for Top 70% of Earners
• Raise Age from 67 to 68
• Limit Spousal Benefits for High Earners
• Subject All Wages to Payroll Tax

In 2050 my plan would reduce total scheduled benefits by 13% and increase payable benefits by 9%. My plan would increase taxes by 18%. However, if I understand this correctly, the reduction in benefits and increase in taxes only affects the higher earners, including Congress!

I am sure there would be push back, yet you cannot please everyone!

[GailL1]

@BrianL306623 

What is the income limit you are using for the high income earners?

[BrianL306623]

@GailL1  I subjected all the wages to payroll taxes. The other option was taxing all wages above $400K and that option would pay out benefits equal to 2% of the newly-taxed income instead of the 15% rate that applies to earnings just below the taxable maximum. So, I gave the higher earners a break! 😉

[BrianL306623]

@GailL1 thank you, I will check this out.

[GailL1]

@BrianL306623 @Tonster521 @RickS467730 @sktn77a @MichaelM873962 

THIS IS A 2019 PROPOSAL FROM REP. JOHN LARSON - it is the only proposal that would fix Social Security for the long term - Of course, it did not pass - why because people wanted more expansion or they wanted to fix something they thought was a problem.  He has reintroduced this same proposal title over the years. with each giving more benefits but not getting enough in revenues to close the solvency problem.  

So years ago (2019), I took one of Rep. John Larsons’ SS proposals and broke it all down, explaining the changes and asked what people thought about it - not much response, at least not from very many people.

I am gonna post the link to them here - it was a two part post.   

It seems to me that most people don’t want yo know what’s in a particular proposal - all they want to know is how much will they get with any expansion or a certainty that they will not have to pay anymore.  It is as simple as that.  So as long as the proposal taxes somebody else and as long as the proposal gives them something they don’t have now - IT IS A WIN - right?

PART I of II - The Social Security 2100 Act Analysis 02/02/2019 - AARP Social Security Community Dis... 

PART II of II - The Social Security 2100 Act Analysis 02/04/2019 - AARP Social Security Community Di... 

Now the above is the 2019 version.  If you want to read the latest, well the last one that the SS Actuary analyzed to see how it has changed thru the years - Here it is. 

Social Security 2100 Act Proposal introduced 07/12/2023 Rep. John Larson 

This proposal is still around although it has been changed several times in the years since.  So it doesn’t look to much like the one that I analyzed in 2019.  But he keeps trying - adding more expansion and getting as much as possible from raising the tax max cap.   Hasn’t helped - I count he has done a total of 3 - 4 of these Social Security 2100 Act Proposals thru the years.  Want something that isn’t there - give him a shout and he can probably squeeze it into the next one. [sarcasm]

[BrianL306623]

@GailL1 @Tonster521 @MichaelM873962 @RickS467730 @sktn77a

Gail, thank you for the exhaustive & informative analysis of Rep Larson's proposal. I cannot truly say I understand all of it, yet still trying. I wonder why the $400,000 would start a new %, why not everything above the cap? I understand the 'Board' you are on now.

I think @Tonster521 has it right that in spite of what lead sponsors of the bill in the House said, "The time to put an end to this theft is now," the Act is BS and the theft will be under those who do not have the government pension. AND the Act does not even provide for an expansion of the cap. 😞

[GailL1]

@BrianL306623 wrote

I wonder why the $400,000 would start a new %, why not everything above the cap?

When President Biden took over in 2021, he vowed not to raise taxes on anybody making less than $400,000.  

Before that time, the figures to raise the cap above a (certain) level were all over the place  - $ 200,000, $ 250,000, $ 400,000 -

Simply this is a figure that can be easily used to bring in more or less income so they tweaked it to the $$ needs in the rest of their proposal.  

In all of the proposals, they also keep the current method of raising the cap  annually if we get a COLA (inflation). and thus at some time down the road, the two cap would then join and ALL employee W2 eor self-employed earnings would be taxes.

But the cap raising  is only (1) part of the equation - the cap relates to the top benefit calculated.  Raise the cap, raise the benefit - then the math doesn’t do what they want, that is bring in revenues - so the plan also has to include a method to recalculate any benefit or just eliminate any benefit altogether.

You all are making this way too hard - The program of Social Security is based in law and because the way the law is written there are only a few ways to raise revenues unless the law is also changed to tax other income sources.  ‘

So if you want to change Social Security there are just a few basics that one needs to decide on -

1.  should the Social Security Program be changed to only fix the solvency problem

             OR

should it be expanded or expanded and fix some of the things to which people feel they have been cheated (like the WEP/GPO) {LOL]. IOW, do it all in one big swift law revision.

2.  Where should the added income come from ?  There is only a few placed - (A). contribution increases on everybody who is vested into the program by work earnings (B) raise the cap AND determine how these extra contributions by the higher earners will be figure into benefits OR NOT give any benefit for them  (C) expand the income sources of contribution taxation. (D). more taxes or benefits or NOT (E) increase the federal government interest paid on the special treasuries where any money left after paying benefits is kept

So you figure out which IF ANY expansion of benefits and then the revenue sources.  

But with so many people, there is never agreement on which of these to do.  Somebody is always gonna feel slighted because they think they deserve more of a fair share.

•  It is a political hot potato, politicians can lose their jobs.
• It is a heart string pulling social hot potato,- the needy, the inequality
• it is a mathematical and social hot potato that will affect things like employment and our economy. 

[BrianL306623]

@GailL1 @Tonster521 @RickS467730 @sktn77a @MichaelM873962 

Gail, you have eloquently presented the issues, the feelings, the partisanship, etc. Yet, the real issue is to get SS to be solvent for the next 75 years at least.  There is no way that everyone will be pleased, they never are, and you brought up reasons why they are not pleased. However, what I do not get is that this is an issue that affects every working American citizen that pays into this system that was enacted to provide "old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, and aid for dependent mothers and children, persons who are blind, and persons with disabilities." So, we have riots & protests for social inequality, racial inequality, gender inequality, police brutality, antisemitism, etc. oh the list goes on. Yet, why don't we have a concerted effort to push Congress into fixing this issue? Rhetorical question? Not sure! As @GailL1 has pointed out, there have been numerous 'solution' that never see the President's desk. AS @Tonster521 pointed out the aptly named "The Social Security Unfairness Act" is just that, does not take care of the solvency issue and provides benefits for those who, well @Tonster521 summarized it quite well. 

So, the question is, how do we bring this issue to the forefront so American citizens will act? I believe the media is one way, yet we would need all the media to be singing the same tune. Ha! I am trying to connect with Reshma Mehta, Vice President, Campaigns, AARP because this is a campaign they should be fully behind and not just ask their paying members to write Congress. I am also pursuing other avenues. Does anyone else have thoughts or ideas? I am still waiting to hear back from @MichaelM873962  on his EVENTS suggestion.  Thanks all.

[GailL1]

@BrianL306623 wrote

what I do not get is that this is an issue that affects every working American citizen that pays into this system that was enacted to provide "old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, and aid for dependent mothers and children, persons who are blind, and persons with disabilities."

===================

Please understand that there is a difference in the Social Security LAW and Social Security THE PROGRAM.  

 The LAW covers a lot of different social welfare programs - meaning for the good of the people - THE PROGRAM of Social Security is the only one that is completely funded by TRUST FUND(S) with specific funding methods.  This is the program that only covers benefits that have been earned by work and contributions (1) OLD AGE RETIREMENT (2) SURVIVORS BENEFITS (3) Social Security DISABILITY 

All the others are funded by General Taz Revenues or from a combination of general tax revenues and payment from another source - like employers for unemployment insurance.

The Supplemental Security Income (SSI) program is also administered by the Social Security Administration but it is completely separate from THE PROGRAM of Social Security.  SSI is completely funded by General Tax revenues and has nothing to do with THE PROGRAM of Social Security except they are both administered by the Social Security Administration.  

That’s another area of confusion - people don’t understand the differences and the government does nothing to correct their misconception in fact they propagate it - for confusion, yes, maybe.  So be leery when people use the acronym of SSI because they think it means Social Security Insurance but it doesn’t - it means Supplemental Security Income - 

SO when you or others talk about fixing Social Security, it will help if you used the term THE PROGRAM of SOCIAL SECURITY or the TRUST FUND Program of SOCIAL SECURITY.  

This is especially true of the disability program because BOTH programs administered by the Social Security Administration - The TRUST FUND one and the GENERAL REVENUES one  are both disability programs - one is an earned benefit and the other is a welfare program for those who haven’t earned the benefit or have a limited amount of earned benefits.

If you just want the Trust Funds fixed for solvency (and I say, TrustS Funds - plural, because they are broken down onto (2) parts - One is for the Social Security programs of OLD AGE RETIREMENT and SURVIVORS BENEFITS and the other is for SOCIAL SECURITY DISABILITY.    Contributions are also broken down to the (2) Trust Funds too, then we need to fix the solvency of THE PROGRAM of Social Security - the earned benefits of OLD AGE RETIREMENT, SURVIVORS BENEFITS and SOCIAL SECURITY DISABILITY. We need to increase the TRUST FUND BALANCES by increasing the revenues for any covered benefits - the benefits that are now covered + any of the ones that might be added or are planned to be added.

ADDING to the TRUST FUNDS revenues isn’t hard at all - The hard part is selling it to the American People because that’s where the unintended consequences will come into play.  They only want the increase in revenues coming from a place that does NOT affect them, meaning paying in more by some means.

It seems to me that the big sale to the American people of any proposal has to be how they see the fairness of it - nobody wants to pay more. 

So how do you convince the American people that to fix the system for the long term that everybody is gonna have to do some part in fixing it?  How do you convince them that not just taxing the “rich” is gonna fix it when most believe that it will and that’s all that needs to be done.  

The solvency methods has to be sold to them.  

When President Reagan and Tip ONeill came up with their compromises in the 1980’s to save THE Program of Social Security, they sold it as saving the system and it did but many of their proposals were for long term inclusion - like raising the retirement age - we are only now reaching that age 67 full retirement age and it was proposed and began the trek to in the 1980’s.

So I believe that anything that we do will have to be done in incremental steps whether that is increasing tor eliminating the cap, raising the retirement age with still an early retirement option or raising the contribution rate - all done incrementally for the next 30 or more years.  OR ALL OF THE ABOVE ⤴️

But IF WE don’t start things like this SOON - we lose the incremental change options.  Then it becomes emergency action.  NOT GOOD

With incremental change, we give the people a chance to adjust.  Just like the year after year Trustee REport says:

“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”

2024 Social Security Trustee REport Summary 

I really have no fight in this game, so to speak, I am closer to death age now than I am to my full retirement age.  I planned well and have a pretty good retirement income with several assets and resources.  I pay a good amount of taxes on my Social Security Benefits every year, I pay Income Related Monthly Adjusted Amount (IRMAA) Medicare Part B premium surcharges every month on my Medicare benefits.

Kiplinger.com IRMAA 2025 rates by income 

I was really ticked off when the 1980’s changes were made cause it did affect me & husband, both self-employed.  But we adjusted and after time, the upset emotion faded.

But what do you want to bet that in this day and the political strife among politicians and people - that nothing gets done or if it does, massive rebellion.  Seeing a bunch of old people and disabled people protesting in the street is something don’t want to see.

And who knows - the Millenials and those younger might not even want this Social Security Program system - they may want something else. 

So MY plan is to prepare for what is right in front of us now - come around 2035 or so - benefits will be cut about 20% +/- so I am preparing my finance structure for it.  

Good Luck 

[BrianL306623]

@GailL1 Thanks. I believe the millennials will need the luck more than we do. I am glad to hear you are secure and wish you the best. Thank you for all your insights.

[RickS467730]

I completely agree that while AARP encourages us to email Congress, they rarely offer concrete solutions themselves. Everyone recognizes the urgent need for a viable solution to the challenges facing Social Security. However, the key question remains: what exactly should we propose to Congress?

In my view, raising taxes is not the answer. Doing so would only reduce the take-home pay of hardworking individuals, placing an even greater burden on them. Instead, I believe the best path forward is to consider a model similar to the reforms implemented in Sweden during the 1990s.

We should move toward a partial privatization of Social Security—not an all-or-nothing approach, but a balanced strategy. Privatizing a portion, such as half of the program, could introduce greater flexibility and potential growth for individual accounts while maintaining the security and stability of the traditional system for those who depend on it most.

Partial privatization, like Sweden’s model, could give individuals more control over their retirement savings and potentially provide higher returns compared to the current system. It would also allow for diversification, which could improve the program's long-term sustainability. At the same time, retaining a public portion ensures a safety net for those who might struggle with the inherent risks of market investments.

That said, implementing such a plan would require careful consideration of several factors, including transition costs, potential market risks, and ensuring fairness across all income groups. To address concerns about investment risks, individuals could have the flexibility to choose their own level of risk, tailoring their investments to align with their financial goals and risk tolerance. It would also be essential to clarify the government’s role in managing this system and address public concerns about shifting more responsibility to individuals.