TAKE ON TOPICS
By TRACI BARNES
I was watching the news and once again saw where people are bringing up the term “means testing” for Social Security. I want to start out by saying right up front I am opposed to means testing for your Social Security and Medicare benefits (healthcare benefits).
I am also against privatization of Social Security. Nor do I believe the retirement age needs to be increased. If you work and you pay into the mandatory system, then you are entitled to what you were promised.
Please remember because the two terms sound similar Medicare is the healthcare that you paid into along with Social Security for all these years through payroll deductions. Medicaid (DHS) is a program to help when there is not enough money, more commonly known as welfare. I am only talking about Medicare and Social Security benefits in the following article.
Social Security was officially called “Old-Age, Survivors, and Disability Insurance”, hence OASDI. This referenced the three components of the program. It is primarily funded through a dedicated payroll tax and was introduced by President Franklin Roosevelt as part of his “New Deal” program in 1935.
Total benefits of $686 billion were paid out verses income (taxes and interest) at $807 billion, during 2009. This was a 121 billion annual surplus. An estimated 156 million people paid into the program and 53 million received benefits, about 2.94 workers per beneficiary.
We are hearing that in 2015 and afterwards that the expenses are expected to exceed cash revenues. This is due to the aging boomer generation, followed by a lower ratio of workers, increased life expectancy. And last that the government has borrowed and spent the accumulated surplus funds, called the Social Security Trust Fund.
In 2010 the Trust Fund held $2.5 trillion and during 2011 it was up to 2.6 trillion dollars. The Trust Fund is made up of the savings of worker contributions and associated interest. It is to be used for future benefit payments. The funds are held in United States Treasury Bonds and US Securities backed by the full faith and credit of the government.
The funds borrowed from worker contributions are part of the total national debt of $14.3 trillion as of March 2011. The government is expected to have borrowed nearly 3.25 trillion from the Social Security Trust Fund.
If between 2015 and 2037 Social Security draws from other government tax sources besides payroll (which it has the legal means to do) it will fully fund the program. But, this will deplete the trust fund by 2037. Then the only funds to fund it will be the ongoing payroll tax collections which will cover approximately 78 percent of the scheduled payout amounts.
This will decline to 75 percent by 2084. Without changes to the law Social Security would have no legal authority to draw other government funds to cover the short falls and payments. This is why they are hitting us with the possibility of a large tax/revenue increase or increasing the eligibility age.
So here is a novel idea repay the surplus amounts from The Social Security Trust Fund and make a new law where it has to be left there for future funding of Social Security and Medicare. Privatizing social security raises many questions for me. What happens to the people who invest poorly, do they then end up on state assistance? Doesn’t privatization also create a windfall for Wall Street and who will manage private funds?
During 2004, Social Security constituted more than half of the income of nearly two-thirds of retired Americans. For one in six, it is their only income.
I see the word entitlement being one of the dirty words this last year. Rightly so in many occasions, such as the ones who do not work but feel entitled to various programs. But for the hard working people who hold down jobs and pay into the social security system I say the word entitlement is fitting.
You are entitled to what you were promised when you have been mandated to pay. The answer is to fix the problems and I do not believe the “crisis” is quite as bad as they portray it. There are other things that can be cut before we deprive our “old age” benefits to our citizens. Isn’t it a measure of how we treat our elders that really counts?