Social Security is not an entitlement program.

[Mountainman]

Half of the money in Social Security was taken from our paychecks and the other half was paid on our behalf by our employers for a specific purpose. That purpose is to provide money to retired persons as income.

Social Security money is not like general revenue that can be used for many purposes. Social Security is really an insurance plan and not tax at all. Entitlement programs come from general revenue.

We pay into a pool of money that the government administers for us. The money is borrowed by the government but it is not general revenue money. It is to be paid back and the right to receiving that money on retirement is not an entitlement.

Don't let the repukes frame cutting Social Security as the government cutting entitlement programs. They are saying that there is no free lunch. Well Social Security is not a free lunch because we have already paid for our lunch while we worked. The repukes took the Social Security trust fund and gave it away as tax breaks for the wealthy. The borrowed Social Security to fund their wars and don't intend to give it back to us.

If privatization is put into action, the next thing they will say is that there is no need for Social Security since young people are putting their money into private accounts and there is no money to pay current benefits because the county is broke and can't afford to assume more debt. This is why Bush cannot tell us the details of his plan because we would never go for it.


So the big lie in this fight is that Social Security is a free lunch entitlement program that should be done away with and people should instead put money into a private account. Thus the end of Social Security.

[leftyandproud]

1. your first sentence

is a bit naive. The full amount is taken from your paychecks. Every employer factors it into your salary before you are even hired. You can double the "FICA" tax shown on your paycheck and that is what you are really paying into the system.

[RC]

2. Try telling that to the self employed.

[LiberalFighter]

18. Would every employer pay that share if they didn't have to pay govt?

Would every employer pay their employee the matching amount employees pay for FICA if they didn't have to pay it to the govt?

It's just like when employers could match the amount that employees put into their 401k or if they bought stock in the company. My company didn't do the 401k and the company stock was for a short time.

[berniew1]

3. The author is only partially correct. SS is both insurence and entitlemen

t but the money doesn't come from Gov't borrowing, but from funds generated by the SS tax and paid into the SS trust fund. And the only problem with SS is that BushII, BushI, and Reagan have robbed trillions of dollars out of the SSTF to pay for increased military spending while also giving huge tax breaks to their rich friends and contributors. This year Bush has stolen $250 billion out of the TF to fund his wars and his big tax cuts, that he wasn't willing to pay for through taxes. Similar for previous years and same during Reagan and Bush years. And additionally they have created huge "off books debt" such as the Savings & Loan bailout, Fanny Mae, and other GSEs to cook the books and not show the huge debt as part of the national debt.
The money stolen from the SSTF by these 3 that Bush clearly has no intention to pay back through taxes is the only problem with SS currently, and that should be the focus of attention. What to do with the trillions that have been transferred out of the SSTF to rich people in return for their support of the Repub administrations. These funds came out of the contributions of myself and my generation. Now these recent radical and unethical Repub presidents have stolen the money from it and created a huge problem that we must face. Do we pay back all of the huge amounts that were transferred to their friends or reduce our generations SS benefits. And if the answer is pay them back(as was the original intention of the program and past administrations before Reagan), who pays? Those who the funds were transferred to, or the poor and middle class tax payers.
The periods under Reagan and the Bushes have been the periods of the largest transfer of wealth from poor and middle class to the rich in the U.S. and the greatest difference in wealth between rich and poor in the U.S. in history. We are approaching a distribution very similar to banana republics.
So why doesn't the public understand this and wise up? We can't afford to go on in this direction much further.

[Maraya1969]

4. Interesting that in such a crapy economy they want people to invest

on their own. Can you imagine people investing in a company like ENRON with their "private" money?

[China_cat]

8. People seem to keep forgetting

that the 'owner' of the private/personal account will NOT be the one investing it. A whole new government agency will be created to do the investing...with the fees going to the 'owner'.

Who do you think will be in charge of this new agency? People who want to see you actually make some money? Or those who will make sure they manage to garner the largest transaction fees?

[Kashka-Kat]

10. not govt agency, probably some Halliburton-esque corporation

who will skim off a lot of $$$ for admin fees (and conveniently manage to "lose" a few billion here & there Im sure). Thats what they mean by "privatization," I think. Not that we will have our own little accounts and stockbrokers that we consult with. Nor the option of "socially aware" investments...

[MousePlayingDaffodil]

5. Sorry, but your characterization of Social Security . . .

. . . is almost completely incorrect.

The Social Security payroll tax is indeed a "tax," in the most straightforward sense of the word.

You assert that "Social Security money is not like general revenue that can be used for many purposes." It isn't? I hate to break this to you, but that's how "Social Security money" has been used almost from the inception of the program. Do you honestly think that the cash the federal government takes out of your paycheck (assuming you get one) goes into a specially earmarked "Social Security account," for use solely to pay Social Security benefits? It doesn't work that way, and it never has. All of the dollars collected by the federal government through taxation is fungible: money comes in as general revenue and money is spent as appropriated by Congress. Some of the money that is spent is indeed provided to Social Security recipients, pursuant to whatever benefits formula is in place at the time. But the idea that Social Security recipients are somehow receiving "earmarked" Social Security dollars is silly.

Similarly, your assertion that retirees currently receiving Social Security benefits are simply receiving the "lunch" they "already paid for" is misplaced. The money current retirees paid in Social Security payroll taxes was spent long, long ago. Their "lunch" is being paid today, on a going-forward basis, by those currently working.

You say that the money that is taken from a person's paycheck in Social Security taxes is "to be paid back and the right to receiving that money on retirement is not an entitlement." Actually, what I think you want to be saying is that one's Social Security benefits ARE an "entitlement." An "entitlement" is something that one is ENTITLED to, that's all.

But you're literally correct in what you said: one's "expected" future Social Security benefits are NOT an "entitlement." That is, you have no property interest in -- i.e., no legally-cognizable "right" to receive -- any Social Security benefits, no matter how much you may have "paid into the system" over the years. This is established by U.S. Supreme Court precedent. As a matter of law and legislation, Congress could abolish the Social Security program tomorrow with a stroke of its pen, and end immediately the payment of benefits even to those currently receiving them. The Social Security program's continued vitality is solely at a matter of political will.

We might not like this reality, but this is indeed the reality of the situation.

[sadiesworld]

11. SS has approx. $1.7T in treasury bonds which do in fact

represent a debt owed the SS fund and its future recipients. This debt is no different than that owed individual investors. Shall you be the one to tell the bond-holding citizens of this country that they are holding worthless paper b/c the $ has been spent?

[Igel]

13. I don't think his point was relevant to the "lock box is empty"

discussion.

FICA taxes are taxes; if Congress feels like disbanding the entire system tomorrow, there is no legal claim by people that are paying in today or are currently receiving money.

The benefits are set by Congress; the tax is set by Congress. And there is no implied contract that anybody will receive one dime next year. There is merely an "inferred contract", if I may coin a term, which is pretty much nonsense.

[sadiesworld]

15. Of course his point was relevant to the "lockbox is empty"

discussion. The poster simply regurgitated the RW talking points--the SS surplus is gone, Congress doesn't have to do a damn thing about it, and there really is no difference b/t SS and the general fund. Technically, Congress doesn't have to do a damn thing about the debt owed Japan or China, but I don't hear much about defaulting on those debts. "Full faith and credit" is now an "inferred contract"? Rubbish.

[Igel]

19. No, even if the "lock box" was brimming over with

actual money, there would still be no requirement that it be paid out to retirees.

FICA is a fancy name for a tax that Congress has said it will reserve for SS benefits, but has also withheld the right to spend it on pizza.

If Congress fully redeemed all the t-bills held by the trust fund, there is no law that Congress cannot alter that would prevent them from taking that money and putting it right back in the general fund. This is equivalent to the SS trust fund never redeeming the bonds, or having the government default on just the SS-held bonds, it just shows up differently on paper.

As to whether Congress will pay out benefits, I think they will; I think they'll redeem the bonds, raising taxes to increase general fund revenues to cover them or increasing the deficits (which will just move ownership of the t-bills from the SS trust fund to private citizens, in the US or elsewhere). I also think they'll be forced to make the age at which people collect benefits later, and reduce benefits, so as to not make the tax increases so punishing. But this is a different point from whether they're legally obligated to pay out SS benefits at a certain level, or at all.

[sadiesworld]

20. I can only hope the RW adopts your arguments verbatim.

:toast:

[Igel]

22. Do you understand before you answer?

Or is "RW talking point" your language's way of saying "I don't like what you're saying"?

This isn't a RW/LW issue. This is just the law and the way the Supreme Court's ruled.

Sort of like "signal before turning left". Or is that also a RW talking point?

[MousePlayingDaffodil]

16. The precise problem is . . .

. . . the Treasury bonds that constitute the Social Security trust fund surplus are NOT held by the "citizens of this country." Don't you understand that? Do you pay Social Security payroll taxes? Has the federal government ever sent you a bond, payable to you, that represents that portion of the surplus that is attributable to your payroll tax payments? What, do you think that somewhere out there there's a file cabinet containing a bond with YOUR name on it? Oh, there is literally a file cabinet containing bonds alright (I think it's somewhere in West Virginia), but those bonds are payable to the Social Security Administration (i.e., a federal agency), NOT to the millions of future Social Security recipients. All you've gotten so far, I'd wager, is a piece of paper sent to you each year that tells you how much you might expect to receive in the future (provided, that is, that Congress doesn't change things; read the small print).

That's the whole point. This stupid debate that revolves around whether it's "worthless government IOUs" or "Treasury bonds backed by the full faith and credit of the United States government" is utterly and completely beside the point. It is a red-herring, an argument about nothing important at all.

Do these Treasury bonds (i.e., these "IOUs") represent a "promise to pay"? Yes, absolutely. In fact, they represent the best "promise to pay" that a person could probably find. And that fact is altogether irrelevant.

The issue isn't whether the federal Treasury would make good on its "promise to pay" when the Social Security Administration comes to redeem the bonds. It surely would. The issue is whether, in the future, the Social Security Administration WILL come calling, and, if so, what it will ask for. Put another way, the federal Treasury's obligation to "make good" on its bonds becomes a relevant issue only when (and if) it is ever ASKED to make good on those bonds.

That is, if it chose, Congress could, in the future, drastically cut benefits, and/or raise the retirement age (hell, it could raise the retirement age to 90, if it wanted to). Congress could abolish the Social Security program (and, with it, the Social Security Administration) altogether.

The fight we are facing is a political fight. That's the only message I'm trying to communicate. It does us no good to obfuscate, intentionally or through muddled-headed ignorance, as to the true nature of the Social Security program. Let's leave the misleading messages to the Repugs. We'll win or lose, politically, telling the truth.

[sadiesworld]

17. Okay, at least you now acknowledge that the SSA is a separate entity

and is owed a very real debt. The question is: How will that debt be repaid? Will we pay it the same way we pay other debts, i.e., raising (non-payroll) taxes and/or cutting spending? Or will we pretend that there is an inherent problem in the SS system and look there for the pound of flesh?

The tax cuts for the wealthy should not be made permanent and those funds should be used to pay the debt owed SS. Pretty simple, eh?

edit to add: "It does no good to obfuscate, either intentionally or through muddle-headed ignorance". Methinks you doth project too much.

[Kashka-Kat]

12. I take op post to be referring 2 "spirit" of the law, not "letter"

you know psychologically, culturally weve not viewed it as "entitlement" in same sense as like say "aid for dependent children," due to the prepayment feature and the universality of participation.

Money you pay into your homeowners insurance isn't put into your own little savings account either but still there is the expectation (heck legal responsibility) that the corp. will pay out under circumstances described in your contract.

op (and all of us) are well justified in our outrage and sense of betrayal at less than scrupulous individuals and orgs who want to take advantage of the weaknesses in the system for fun and profit, and FINALLY getting rid of that evil bastard FDR (sarcasm).

Ive been around for quite a few decades now and always this "borrowing" from ss was accompanied with discussion of the need to "someday" repay this... And now, like, suddenly we're supposed to say "oh, ok, I guess the law sez our benefits are 'entitlement' which can be cut." I don't think so...

[papau]

14. Indeed Gov Bonds can be made worthless - the clawback on private accts

made 100% - making the "private accounts" a cheap little term insurance policy for tiny amounts.

all at the stroke of a pen.

So why do you try to sell the idea that private accounts are more "ours" than a Social Security Account?

Indeed promises for future conduct is all one ever gets in return for insurance premiums.

So what is the big deal that the insurance company - or the gov - spends the cash?

Those full faith and credit gov bonds are not about to be defaulted on - cause folks with bigger sticks than the aged - like Japan - are out there to prevent that.

[justgamma]

6. One of Shrub's talking points

is that you might not get your money back from SS.

Let me tell you this is one insurance payment that I don't mind making. I pay almost as much for car insurance that I will never get back, but it's there if I need it.
Health insurance is the same thing. Most of us will never get back what we payed in, but you can't afford not to have it.

[scarletlib]

9. this is an excellent analogy for all the people

out there who just don't get it. I would like to suggest you start this as an individual thread. This could really help explain/clarify the issue to many people.

To talk government speak I can tell the original poster that Social Security is an entitlement program. It is also an insurance program. You are entitled to it when you have paid into the program long enough--generally 40 quarters or 10 years and then meet the required conditions to receive the benefit such as age or disability. It is an entitlement because you have paid a specific tax for a specific purpose and must meet specific conditions. Not everyone in the country will get a social security check.

A welfare program is not an entitlement program and social security is not welfare. In a welfare program you may receive a benefit paid to you by the government that is funded by tax dollars from general revenue or another source. You must meet specific requirements to get the welfare payment and it can be stopped.

If you are ENTITLED to a benefit such as Social Security then it cannot be stopped once you get it no matter if you are rich, in jail etc. (Caveat for SSA Disabiltiy under 65 yrs if you can go back to work it will stop until you are disabled or until you reach retirement age)

SSA is an entitlement. You paid a specific tax for it and once you get it, it cannot be stopped.

SSI (Supplemental Security Income) is run by SSA but is a welfare payment. This can be received by people who didn't pay enough into SSA to get money back. Or people who never worked can get SSI if they meet the requirements. It is NEEDS BASED. You must be within income and asset standards. If your income or assets exceed those standards or if other standards are not met then the payments will stop.

Hope this clarifies for some.

[berniew1]

7. SS is not the real economic crisis we are facing- Bush has bankrupted U.S

Under Bush the national debt has ballooned to about $7.5 trillion already which amounts to about $30,000 per person or $120,000 for the average family of 4. And a family's annual interest on the national debt is over $5,000 per year. So Bush has given us all a big mortgage with his borrowing to pay for his wars and big tax breaks to his rich supporters. And given his tax policy, its clear that the poor and middle class and your kids are the ones expected to pay off this huge debt.
Additionally we this year had the biggest trade deficit in history, over $600 billion. About half of this is for energy/fuel imports.
The huge debt and trade deficits are causing a devaluing of the dollar and making us all collectively poorer each year. And the Bush policies are accelerating these trends. We are running out of oil and natural gas(and the cleaner types of coal) in the U.S. and the huge energy use of the world's biggest and most inefficient energy user country have already become huge problems that aren't being addressed.
This in addition to the fact that the ever increasing use of fossil fuels is leading to an environmental crisis even more serious than the economic problems. Global warming and global mercury pollution
are having huge effects all over the world and will only get much worse. Nothing to avoid major catastrophies now, but we could still reduce the effects significantly. And there are currently
available cost effective measures involving energy efficiency and rational energy policy(see RMI) that could make huge differences in our economic and energy picture.

[BoristheBewildered]

21. Oh, but it is. W borrowed from it and now wants to kill it so he won't owe

As simple as that.