The Social Security Conundrum

[DGS49]

Social Security, as it now operates, is totally unconstitutional. Congress has no power to create or operate or fund a compulsory national retirement fund. In basic terms, the Courts have allowed it to exist based on two unpalatable points: First, the social security tax is just that: a tax. It is not a contribution to a retirement fund or a trust fund, or an investment, or anything like that. It is a tax. Hence, Congress can increase, decrease, or eliminate it, at will, with no recourse by anyone. Second, social security benefits are an "entitlement". While entitlements are anathema to the Constitution, the courts have allowed entitlements, as long as they don't run afoul of the equal protection provisions of the Constitution. But because they are Entitlements, Congress can increase them, decrease them, eliminate them, change eligibility criteria, or whatever, as long as "we" are all treated "equally." That is to say, people in the same classifications have to be treated equally, regardless of race, gender, what state they live in, and so on.

But we want Social Security. We like Social Security. We don't want it to go away, or shrink precipitously as we grow older (NOTE: I am 68 years old and collecting SS).

There are two possible ways to make Social Security Constitutional. One, of course would be to promulgate a Constitutional Amendment to permit it (in effect, waiving the Tenth Amendment). The second would be to convert it into a true "trust fund." Take Congress out of it.

A SS Trust Fund would have to be managed by some sort of a committee that would ensure that it is, and remains, economically viable. That is to say, IT CANNOT DRAW FUNDS FROM THE TREASURY, after possibly an initial funding initiative to make it initially solvent (and recognize at least some of the billions paid in by living contributors). So it would have to be set up with an annual BALANCED budget, and have enough flexibility to not go bankrupt as the boomers continue to retire, without dramatically reducing the stipends received by those who are currently drawing monthly checks.

Clearly, the contribution levels would have to increase. First, the cap on annual contributions would have to go. It would be (roughly) 13% of unlimited earnings, paid jointly by employer and employee. Non-wage income (mainly capital gains, dividends, and interest) would have to be assessed some small percentage.

Disability stipends would have to be re-assessed. Should they be part of Social Security, or should they be maintained by the Federal Government? I say, let Washington pay for them, because the recipients have simply not paid enough to be eligible to retire.

Finally, and most painfully, some sort of means-testing would have to be implemented. If assets are high (levels to be determined), or if other sources of income exist, then the payout might have to be adjusted for the system to remain solvent.

But all of this would not be controlled by Congress. All Congress would do is institute legal and criminal penalties for not paying or for fraud. The decisions would all be crafted by an elected Social Security Trust Fund Board. Or something like that.

Social Security is unconstitutional, and it's time to do something about it.

 

[Toro]

Social security should be set up like a regular pension plan fund, like the Canada Pension Plan, which is the Canadian SS. It should be compulsory for all, but participants should be allowed to opt out once, and they would then have to invest it in something like a 401k. It should be allowed to invest in stocks, bonds, real estate, commodities, etc. The governing structure should be totally independent of political interference, made up of directors with significant investment experience.

If we did this, it would not only make SS solvent, it would lower participant contributions because the rate of return would rise above the rate used to compound assets today. SS may be a pay-as-you-go system but it is designed to act exactly like a government Treasury security fund. Government Treasury securities long-term return will be low. By investing in riskier assets, the rate of return will rise, and people's FICA taxes would go down.

 

[regent]

It seems the cry, "Social Security is communism" has lessened.

 

[depotoo]

Sounds similar to the gop plan they have wanted for years.

Social security should be set up like a regular pension plan fund, like the Canada Pension Plan, which is the Canadian SS. It should be compulsory for all, but participants should be allowed to opt out once, and they would then have to invest it in something like a 401k. It should be allowed to invest in stocks, bonds, real estate, commodities, etc. The governing structure should be totally independent of political interference, made up of directors with significant investment experience.

If we did this, it would not only make SS solvent, it would lower participant contributions because the rate of return would rise above the rate used to compound assets today. SS may be a pay-as-you-go system but it is designed to act exactly like a government Treasury security fund. Government Treasury securities long-term return will be low. By investing in riskier assets, the rate of return will rise, and people's FICA taxes would go down.

 

[Anathema]

Get rid of it, permanently. Its an illegal, unconstitutional and immoral program and always has been.

 

[WinterBorn]

Social security should be set up like a regular pension plan fund, like the Canada Pension Plan, which is the Canadian SS. It should be compulsory for all, but participants should be allowed to opt out once, and they would then have to invest it in something like a 401k. It should be allowed to invest in stocks, bonds, real estate, commodities, etc. The governing structure should be totally independent of political interference, made up of directors with significant investment experience.

If we did this, it would not only make SS solvent, it would lower participant contributions because the rate of return would rise above the rate used to compound assets today. SS may be a pay-as-you-go system but it is designed to act exactly like a government Treasury security fund. Government Treasury securities long-term return will be low. By investing in riskier assets, the rate of return will rise, and people's FICA taxes would go down.

Before we try to "fix" SSI, the gov't needs to pay back the $2.9 trillion it borrowed from the fund.

 

[WinterBorn]

Get rid of it, permanently. Its an illegal, unconstitutional and immoral program and always has been.

I have no problem with that. Just give us our money back. Right now the US Gov't owes $2.9 trillion to the SSI fund. It has continually borrowed and not paid back one cent.

 

[Anathema]

I have no problem with that. Just give us our money back. Right now the US Gov't owes $2.9 trillion to the SSI fund. It has continually borrowed and not paid back one cent.

I don't even want the collected money back. Just stop taking it out of my pay going forward.

 

[WinterBorn]

I have no problem with that. Just give us our money back. Right now the US Gov't owes $2.9 trillion to the SSI fund. It has continually borrowed and not paid back one cent.

I don't even want the collected money back. Just stop taking it out of my pay going forward.

Unacceptable. The money was taken from me by force. Then it was taken from the fund without my approval, but with the agreement that it would be paid back. I see no evidence that there was ever ANY intention of paying it back. Remove the pay raises Congress voted itself, and take away the tax cuts put in place over the last 20+ years until the SSI fund is made whole.

 

[Dan Stubbs]

Social Security, as it now operates, is totally unconstitutional. Congress has no power to create or operate or fund a compulsory national retirement fund. In basic terms, the Courts have allowed it to exist based on two unpalatable points: First, the social security tax is just that: a tax. It is not a contribution to a retirement fund or a trust fund, or an investment, or anything like that. It is a tax. Hence, Congress can increase, decrease, or eliminate it, at will, with no recourse by anyone. Second, social security benefits are an "entitlement". While entitlements are anathema to the Constitution, the courts have allowed entitlements, as long as they don't run afoul of the equal protection provisions of the Constitution. But because they are Entitlements, Congress can increase them, decrease them, eliminate them, change eligibility criteria, or whatever, as long as "we" are all treated "equally." That is to say, people in the same classifications have to be treated equally, regardless of race, gender, what state they live in, and so on.

But we want Social Security. We like Social Security. We don't want it to go away, or shrink precipitously as we grow older (NOTE: I am 68 years old and collecting SS).

There are two possible ways to make Social Security Constitutional. One, of course would be to promulgate a Constitutional Amendment to permit it (in effect, waiving the Tenth Amendment). The second would be to convert it into a true "trust fund." Take Congress out of it.

A SS Trust Fund would have to be managed by some sort of a committee that would ensure that it is, and remains, economically viable. That is to say, IT CANNOT DRAW FUNDS FROM THE TREASURY, after possibly an initial funding initiative to make it initially solvent (and recognize at least some of the billions paid in by living contributors). So it would have to be set up with an annual BALANCED budget, and have enough flexibility to not go bankrupt as the boomers continue to retire, without dramatically reducing the stipends received by those who are currently drawing monthly checks.

Clearly, the contribution levels would have to increase. First, the cap on annual contributions would have to go. It would be (roughly) 13% of unlimited earnings, paid jointly by employer and employee. Non-wage income (mainly capital gains, dividends, and interest) would have to be assessed some small percentage.

Disability stipends would have to be re-assessed. Should they be part of Social Security, or should they be maintained by the Federal Government? I say, let Washington pay for them, because the recipients have simply not paid enough to be eligible to retire.

Finally, and most painfully, some sort of means-testing would have to be implemented. If assets are high (levels to be determined), or if other sources of income exist, then the payout might have to be adjusted for the system to remain solvent.

But all of this would not be controlled by Congress. All Congress would do is institute legal and criminal penalties for not paying or for fraud. The decisions would all be crafted by an elected Social Security Trust Fund Board. Or something like that.

Social Security is unconstitutional, and it's time to do something about it.

I agree only in part. SS was increased in the 70 s and covered more than it was suppose to. The Democrats had a field day spending on new departments like the Education, and others Department were formed and not needed. The SSN needs to cut off paying people who are getting 70k and years in retirement payments from other sources and reduce payments to those who have incomes over 40k and year. Lets face it older people are not equitable nor equal in how much money they have. I use to be family took care of family now we farm the old folks out to the "Retirement Homes" that cost Billions of dollars. No one is at home to look after anyone. It is said when the government gets involved the system goes to hell.

 

[Anathema]

Unacceptable....

Good for you. Go tilt with that windmill. See how far you get.

All I want us for them to stop taking the money going forward. That's a pipe dream by itself, but getting anything back is high fantay.

 

[flacaltenn]

Sounds similar to the gop plan they have wanted for years.

Social security should be set up like a regular pension plan fund, like the Canada Pension Plan, which is the Canadian SS. It should be compulsory for all, but participants should be allowed to opt out once, and they would then have to invest it in something like a 401k. It should be allowed to invest in stocks, bonds, real estate, commodities, etc. The governing structure should be totally independent of political interference, made up of directors with significant investment experience.

If we did this, it would not only make SS solvent, it would lower participant contributions because the rate of return would rise above the rate used to compound assets today. SS may be a pay-as-you-go system but it is designed to act exactly like a government Treasury security fund. Government Treasury securities long-term return will be low. By investing in riskier assets, the rate of return will rise, and people's FICA taxes would go down.

Difference was the Repub proposals, many of which came from Libertarian think tanks had an important distinction. And that was because at the TIME -- SS was running huge SURPLUSES which were being squandered and laundered to have the APPEARANCE of "lowering the yearly deficits". Which was a TOTAL bookkeeping fraud and theft.

The plans all centered around USING THE SURPLUSES to defer future liabilities to the plan. Allowing folks to use a SMALL portion of their FICA tax to invest in pension funds like Toro suggested. ---- In exchange for them taking less benefits at retirement. Would have LESSENED the theft of surplus from working poor Americans and greatly LEVERAGED future system liquidity.

Can't do that now. Because we are IN the crisis that everybody knew was coming. And $50Bill surpluses have already turned into $50Bill deficits. And the $100Bill SWING in the ACTUAL treasury budget has to be funded by floating NEW debt every year.

 

[Jarlaxle]

Social security should be set up like a regular pension plan fund, like the Canada Pension Plan, which is the Canadian SS. It should be compulsory for all, but participants should be allowed to opt out once, and they would then have to invest it in something like a 401k. It should be allowed to invest in stocks, bonds, real estate, commodities, etc. The governing structure should be totally independent of political interference, made up of directors with significant investment experience.

If we did this, it would not only make SS solvent, it would lower participant contributions because the rate of return would rise above the rate used to compound assets today. SS may be a pay-as-you-go system but it is designed to act exactly like a government Treasury security fund. Government Treasury securities long-term return will be low. By investing in riskier assets, the rate of return will rise, and people's FICA taxes would go down.

Before we try to "fix" SSI, the gov't needs to pay back the $2.9 trillion it borrowed from the fund.

Nope. It's gone forever.

 

[Jarlaxle]

It seems the cry, "Social Security is communism" has lessened.

Naah...it's just a Ponzi scheme.

 

[regent]

It seems the cry, "Social Security is communism" has lessened.

Naah...it's just a Ponzi scheme.

Thank God for that. All these years I thought maybe it was communistic but now I find it's only a scheme. So Republicans have lied to us since 1935.

 

[Humorme]

Social Security, as it now operates, is totally unconstitutional. Congress has no power to create or operate or fund a compulsory national retirement fund. In basic terms, the Courts have allowed it to exist based on two unpalatable points: First, the social security tax is just that: a tax. It is not a contribution to a retirement fund or a trust fund, or an investment, or anything like that. It is a tax. Hence, Congress can increase, decrease, or eliminate it, at will, with no recourse by anyone. Second, social security benefits are an "entitlement". While entitlements are anathema to the Constitution, the courts have allowed entitlements, as long as they don't run afoul of the equal protection provisions of the Constitution. But because they are Entitlements, Congress can increase them, decrease them, eliminate them, change eligibility criteria, or whatever, as long as "we" are all treated "equally." That is to say, people in the same classifications have to be treated equally, regardless of race, gender, what state they live in, and so on.

But we want Social Security. We like Social Security. We don't want it to go away, or shrink precipitously as we grow older (NOTE: I am 68 years old and collecting SS).

There are two possible ways to make Social Security Constitutional. One, of course would be to promulgate a Constitutional Amendment to permit it (in effect, waiving the Tenth Amendment). The second would be to convert it into a true "trust fund." Take Congress out of it.

A SS Trust Fund would have to be managed by some sort of a committee that would ensure that it is, and remains, economically viable. That is to say, IT CANNOT DRAW FUNDS FROM THE TREASURY, after possibly an initial funding initiative to make it initially solvent (and recognize at least some of the billions paid in by living contributors). So it would have to be set up with an annual BALANCED budget, and have enough flexibility to not go bankrupt as the boomers continue to retire, without dramatically reducing the stipends received by those who are currently drawing monthly checks.

Clearly, the contribution levels would have to increase. First, the cap on annual contributions would have to go. It would be (roughly) 13% of unlimited earnings, paid jointly by employer and employee. Non-wage income (mainly capital gains, dividends, and interest) would have to be assessed some small percentage.

Disability stipends would have to be re-assessed. Should they be part of Social Security, or should they be maintained by the Federal Government? I say, let Washington pay for them, because the recipients have simply not paid enough to be eligible to retire.

Finally, and most painfully, some sort of means-testing would have to be implemented. If assets are high (levels to be determined), or if other sources of income exist, then the payout might have to be adjusted for the system to remain solvent.

But all of this would not be controlled by Congress. All Congress would do is institute legal and criminal penalties for not paying or for fraud. The decisions would all be crafted by an elected Social Security Trust Fund Board. Or something like that.

Social Security is unconstitutional, and it's time to do something about it.

I agree only in part. SS was increased in the 70 s and covered more than it was suppose to. The Democrats had a field day spending on new departments like the Education, and others Department were formed and not needed. The SSN needs to cut off paying people who are getting 70k and years in retirement payments from other sources and reduce payments to those who have incomes over 40k and year. Lets face it older people are not equitable nor equal in how much money they have. I use to be family took care of family now we farm the old folks out to the "Retirement Homes" that cost Billions of dollars. No one is at home to look after anyone. It is said when the government gets involved the system goes to hell.

So if you are affluent, you get to pay in, but not get any of your money back? Are you really advocating socialism?

 

[Zander]

My 2 cents. SS is never going to get properly fixed BUT it not going to go away any time soon.

My guess is they'll raise the age gradually and they'll raise the threshold of income that is subject to the tax. Then they'll raise the tax paid by EMPLOYERS. Finally the tax paid by Employees.

Each of these moves will increase the life of the program and ensure it survives.

As for getting back the Trillions of $$$ they've raided from the program?

 

[Mr Natural]

Give me everything I’ve paid into over the years, (plus a reasonable rate of return) and I’ll gladly opt out.

 

[DGS49]

Repeat after me: "THERE IS NO TRUST FUND!" It is a tax. The money goes into the General Fund. It always has. There was never any "surplus." That was just a fiction to make people forget that their payments were being pissed away as soon as paid, and make them think it was somehow being held for them.

The talk about Social Security running out of funds sometime in the future is a silly, insidious accounting charade.

The statements you get, telling you how much you have paid are a joke. That money is GONE. It is the same as if they did the same thing with your FIT. It would be meaningless.

 

[regent]

Does anyone remember when Social Security was not running out of funds?