The 75-year Social Security 'shortfall' = extending Bush's tax cuts for the top 2%

[sinkingfeeling]

http://www.cbpp.org/cms/index.cfm?fa=view&id=3262

■The program’s shortfall is relatively modest, amounting to 0.7 percent of Gross Domestic Product (GDP) over the next 75 years (and 1.4 percent of GDP in 2084). A mix of tax increases and benefit modifications — carefully crafted to shield recipients of limited means, potentially make benefits more adequate for the neediest beneficiaries, and give ample notice to all participants — could put the program on a sound footing indefinitely.

■The 75-year Social Security shortfall is about the same size as the cost, over that period, of extending the 2001 and 2003 tax cuts for the richest 2 percent of Americans (those with incomes above $250,000 a year). Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable while the Social Security shortfall constitutes a dire fiscal threat.

[rfranklin]

1. The Republicans will claim exactly that...

They can tell you that tax cuts do not cost a cent without cracking a smile. Of course, they have always gone further than that by claiming that tax cuts create jobs and increase tax revenues.

[iamtechus]

2. This has been posted before but myths are hard to bust.

Top 5 Social Security Myths

Myth #1: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever. After 2037, it’ll still be able to pay out 75% of scheduled benefits—and again, that’s without any changes. The program started preparing for the Baby Boomers’ retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.

Myth #2: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than they did 70 years ago. What’s more, what gains there have been are distributed very unevenly—since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half. But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth #3: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come. Right now, high earners only pay Social Security taxes on the first $106,000 of their income. But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth #4: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market—which would have been disastrous—but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth #5: Social Security adds to the deficit

Reality: It’s not just wrong—it’s impossible! By law, Social Security’s funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.
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http://delmontpda.wordpress.com/2010/08/15/top-5-social-security-myths-debunked/

[Faryn Balyncd]

3. K&R .....Thanks.

The attempt to not pay off the bonds in the SS Trust Fund (that is exactly what Simpson and Co. want to do with the Trust Funds bonds - - They are not suggesting to any other bondholders, whether they be Chinese or middle easten=rn oil sheiks, that they not expect full payment of their bonds, or that "They are only a stack of IOU's". Simpson only says this about the SS Trust Funds bond holdings/) - - This attempted raid is an attempt to apply the SS Trust Fund surplus (which was paid by regressive payroll & self-employment taxes) to non-SS expenditures (such as deficits from wars, bailout and corporate welfare). These non=SS expenditures by law & morality should be paid by (modestly progressive)INCOME taxes and other federal revenue.

You are absolutely correct that this manufactured "crisis" is an attempt to avoid income tax hikes on the top 1-2%, by raiding the funds which by law must be used for SS benefits.

Thanks for posting.




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