Social Security and Reagan.

[Navy1960]

. Letter to Congressional Leaders About the Social Security System --July 18, 1981

The highest priority of my Administration is restoring the integrity of the Social Security System. Those 35 million Americans who depend on Social Security expect and are entitled to prompt bipartisan action to resolve the current financial problem.

At the same time, I deplore the opportunistic political maneuvering, cynically designed to play on the fears of many Americans, that some in the Congress are initiating at this time. These efforts appear designed to exploit an issue rather than find a solution to the urgent Social Security problem. They would also have the unfortunate effect of disrupting the budget conference and reversing the actions of a majority of both Houses of the Congress. Such a result would jeopardize our economic recovery program so vital to the well-being of the Nation.

In order to tell the American people the facts, and to let them know that I shall fight to preserve the Social Security System and protect their benefits, I will ask for time on television to address the Nation as soon as possible.

During this address, I will call on the Congress to lay aside partisan politics, and join me in a constructive effort to put Social Security on a permanently sound financial basis as soon as the 97th Congress returns in September.

Sincerely,

Ronald Reagan

I hear often in today's debate about entitlements and then in the next breath from those wishing to destroy the trust between Social Security and this nation how much they are like Ronald Reagan. I would suggest that at least some of them take a real look at the man before advocating reforms to the point where that trust is broken. In fact when asked if he collected Social Security, President Reagan's response was, " of course I do, I paid into it". This is NOT to be taken as a critical opinion on Reagan , on the contrary, I was and still do see the man as a good President for this nation, because his love of this nation was so intense it knew no party it only knew Americans.

I am asking the Congress to restore the minimum benefit for current beneficiaries with low incomes. It was never our intention to take this support away from those who truly need it. There is, however, a sizable percentage of recipients who are adequately provided for by pensions or other income and should not be added to the financial burden of social security.

The same situation prevails with regard to disability payments. No one will deny our obligation to those with legitimate claims, but there's widespread abuse of the system which should not be allowed to continue.

Social Security Online

 

[Wiseacre]

I hear it all the time on TV from the lib/dems, the repubs want to take away or diminish the SS benefit for retirees who worked for 45 years putting into the system and now depend on their monthly check. In fact, no repub has ever said we should reduce anybody's existing benefit, if you're on SS now or about to be within the next 10 years, every GOP plan has excluded those people.

Instead the repubs have tried to make the SS program sustainable for future retirees by raising the retirement age or by recalculating their benefit or even means testing. But the dems have demagogued it to death, electing to try for political points by deliberating lying about the repub intentions.

 

[Navy1960]

Wise, I am all for means testing Social Security for things such as high income individuals, further when Social Security was created the average life span of Americans was shorter than it is today, so thing such as these I take no issue with. Where I part company with others, is when they start to advocate for such things as reducing or eleminating Social Security all together for current people on it and for future generations. Let me cite you small examples, if our nation were truley serious about this conversation then they would recoginze that the Govt. for years both Republican and Democrat have raided the Trust fund to the point where one of the largest debt holders of American debt is Social Security. So it seems to me that by making a scapegoat of Social Security many are shooting themselves in the foot. This idea of making it optional, while on the surface may seem nice what it will eventually lead to is a perpetually underfunded Social Secuirty system, and I submit this does not need to happen when simple fixes , or perhaps dare I say it, focusing on paying back the Trust fund, might just make this less a problem that people seem to make it out to be.

 

[Wiseacre]

I don't like the idea of making it optional or privatizing it either. Dont screw with it, leave it as is except for setting the retirement age to a reasonable number or in some ways making it sustainable. People are supposed to be supplementing their SS, that's what 401ks and IRAs are for. SS isn't supposed to be your only source of income after you stop working.

 

[Navy1960]

Here's something else to consider, and was talking about this morning with a friend, if someone were making lets say, 300K a year and had 5 different retirement incomes then at what point do we "means test" Social Security? The sad thing is for many Social Security is all they have, and if one has been in the Military retirement system for any length of time they know a thing or two about reduction in benefits *lol*. I just believe and still do this nation needs to refocus on the fact Americans should come first then the rest next, and it seems to have lost that concept a little.

 

[Wiseacre]

I don't think we oughta be sending a monthly check to somebody that's making 300k. If I'm not mistaken, the SS tax stops after your 1st $108,600 dollars, true? Well that's where I'd start the means testing, if you're making more than that then you don't need SS IMHO.

 

[waltky]

Don't try to take Granny's social security away from her or ya liable to draw back a bloody nub...

Social Security Trustee: Obama's Tax Plan Could 'End Social Security as We Know It'
December 13, 2011 – A Social Security trustee says that extending the cut in the Social Security tax, as President Obama is demanding, could make the entitlement program more dependent on income tax revenue in the future, leaving it with less political protection than it enjoys now.

Social Security was established as a worker benefit program, to be funded by what employees paid into the system through payroll tax deductions. Replacing much of that financing with income tax revenue would fundamentally change Social Security, making it more like other government entitlement programs that are subject to political whims and budget priorities, Charles P. Blahous III, a member of the board of trustees for Social Security and Medicare, told CNSNews.com. “It’s really basically a conversion of the system from payroll-tax financing to partial income-tax financing,” Blahous said of the plan that Obama is pushing.

Extending the payroll tax cut would not reduce Social Security benefits -- at least in the short term, Blahous said. But, he added “down the line you probably have a greater risk of benefit cuts because of the fact that benefits have less protection when they are subsidized by the general fund.” President Barack Obama and Democrats in Congress want to extend the payroll tax holiday -- a temporary two percent cut in the payroll tax enacted last December -- for another year. House Republicans have proposed an alternative plan to extend the cut.

But doing so would reduce funding for Social Security by $119 billion over the next year – on top of the $105 billion in reduced funding this year. Democrats propose to offset the 2012 funding shortfall by raising taxes, while Republicans propose to offset it by cutting spending. Either way, the offsets to maintain Social Security funding would be drawn from the general fund, which derives mainly from income tax revenue. In a recent commentary, Blahous explained why continuing the payroll tax cut “could eventually end Social Security as we know it.”

When President Franklin D. Roosevelt put Social Security into place, he designed it to be funded separately from the general fund. He was quoted as saying, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

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See also:


Hatch: Payroll Tax Extension ‘Very Dangerous’ to Social Security
December 13, 2011 – Sen. Orrin Hatch (R-Utah), top Republican on the Finance Committee, has concerns about the impact that extending the payroll tax holiday will have on Social Security, but he said the House Republican package debated Tuesday offers avenues to trim spending and spur job growth.

“Let’s face it. They’re taking money out of Peter to pay Paul, where there is no money for Paul to pay it back,” Hatch told CNSNews.com. “In other words, they’re going to take money out of Social Security. “One of the reporters said to me, ‘Well, they’re going to pay for it out of the general fund.’ I said ‘with what? We’re broke,’” Hatch continued. “They’d have to borrow it to pay for it. In my eyes, it’s a very dangerous thing to be doing to Social Security. Democrats say ‘well, yeah, but it gives the middle class some money.’ There may be better ways of getting the money than ripping it out of Social Security.”

Social Security was established as a worker benefit program, ideally to be funded by what employees paid into the system through payroll taxes, rather than income tax revenue like most other government programs. President Barack Obama and Democrats in Congress want to extend the payroll tax holiday – a temporary two percent cut in the payroll tax enacted last December – for another year. House Republicans have proposed an alternative plan to extend the cut. Doing so would reduce funding for Social Security by $119 billion over the next year – on top of the $105 billion in reduced funding this year. Democrats propose to offset the 2012 funding shortfall by raising taxes, while Republicans propose to offset it by cutting spending.

Either way, the offsets to maintain Social Security funding would be drawn from the general fund, which derives mainly from income tax revenue. “The Democrats pay for it with a permanent tax increase. We’ve played that game now for 35 years that I’ve been here,” Hatch said. “They always promise, ‘if you’ll raise taxes, they we will cut spending.’ The spending cuts never materialize, the tax increases continue. That’s a game that I’m just sick and tired of playing. We’ve just got to hold their feet to the fire this time.”

Currently, the $2.68 trillion Social Security trust fund draws only five percent from the general fund. If Obama’s payroll tax proposal is adopted, that would increase to 14 percent, according to Social Security Trustee Charles Blahous’s estimates. The Social Security and Medicare trustees issued a report in August that said Social Security ran a deficit in 2010 for the first time since 1983. The deficit for 2010 was $49 billion, and the deficit for 2011 is projected to be $46 billion, the report said. The Senate Democratic majority sought a three percent surcharge tax on millionaires to offset the lack of revenue going into Social Security, but the legislation failed. Meanwhile, House Republicans backed a bill to extend the payroll tax cut for another year while also gradually reducing unemployment benefits from 99 weeks to 59 weeks, while approving the Keystone oil pipeline from Canada into the United States.

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[waltky]

Social Security in the red for 2011...

Social Security Ran $45 Billion Deficit in 2011
February 14, 2012 – Social Security ran a deficit of approximately $45 billion in 2011, according to official government figures and CNSNews.com calculations. That figure is slightly lower than the $49 billion deficit the government reported in 2010.

Social Security had been projected to run a $46 billion deficit in 2011, according to the 2011 report from the program’s trustees that covered 2010. According to Social Security Administration (SSA) figures, the program was in the red eight months out of the year, and needed to draw on its trust fund in order to pay benefits. The average deficit during those months was $6.3 billion.

SSA data indicate that the program paid out approximately $714 billion in benefits during 2011 while taking in $669 billion in payroll taxes – a deficit of $45 billion. The deficit figure is preliminary, however, because SSA only reported estimated benefit payments for October, November, and December of 2011. The final deficit figure could therefore be slightly higher or lower, depending on the final benefit figures for those three months.

The estimated benefit payment figures for the last three months of 2011 are lower on average than the actual benefit payments SSA reported. If the final figures for October, November and December end up being closer to those of benefit payments made throughout the year, then Social Security’s deficit for 2011 would be higher than the $45 billion estimate. This will be the second year since 1983 that the program has run a cash deficit, a trend its trustees expect to continue until the program completely exhausts its trust funds in 2036.

Social Security is in fact already insolvent because its trust funds are invested in non-marketable Treasury bills, not in real assets. In other words, the trust funds contain no cash or other assets, merely special Treasury bonds indicating that one government account – the Treasury’s General Fund – owes another government account – the Social Security trust funds – money. Both the principal and the interest on those special bonds are paid out of General Fund tax revenue – the same as with any other government spending program.

Source

 

[Procrustes Stretched]

. Letter to Congressional Leaders About the Social Security System --July 18, 1981

The highest priority of my Administration is restoring the integrity of the Social Security System. Those 35 million Americans who depend on Social Security expect and are entitled to prompt bipartisan action to resolve the current financial problem.

At the same time, I deplore the opportunistic political maneuvering, cynically designed to play on the fears of many Americans, that some in the Congress are initiating at this time. These efforts appear designed to exploit an issue rather than find a solution to the urgent Social Security problem. They would also have the unfortunate effect of disrupting the budget conference and reversing the actions of a majority of both Houses of the Congress. Such a result would jeopardize our economic recovery program so vital to the well-being of the Nation.

In order to tell the American people the facts, and to let them know that I shall fight to preserve the Social Security System and protect their benefits, I will ask for time on television to address the Nation as soon as possible.

During this address, I will call on the Congress to lay aside partisan politics, and join me in a constructive effort to put Social Security on a permanently sound financial basis as soon as the 97th Congress returns in September.

Sincerely,

Ronald Reagan

I hear often in today's debate about entitlements and then in the next breath from those wishing to destroy the trust between Social Security and this nation how much they are like Ronald Reagan. I would suggest that at least some of them take a real look at the man before advocating reforms to the point where that trust is broken. In fact when asked if he collected Social Security, President Reagan's response was, " of course I do, I paid into it". This is NOT to be taken as a critical opinion on Reagan , on the contrary, I was and still do see the man as a good President for this nation, because his love of this nation was so intense it knew no party it only knew Americans.

I am asking the Congress to restore the minimum benefit for current beneficiaries with low incomes. It was never our intention to take this support away from those who truly need it. There is, however, a sizable percentage of recipients who are adequately provided for by pensions or other income and should not be added to the financial burden of social security.

The same situation prevails with regard to disability payments. No one will deny our obligation to those with legitimate claims, but there's widespread abuse of the system which should not be allowed to continue.

Social Security Online