My Opinion

Hillary Clinton’s fix for Social Security 

No responsible person in or out of politics wants to cut Social Security benefits. That means no cut for any person receiving benefits and no cut to any benefits already earned. That leaves little room to make the program solvent and sustainable except to raise revenue. 

The Committee for a Responsible Federal Budget calculator indicates that after removing the cap on taxable wages Social Security remains insolvent. The trust fund will run out in 2067 at which point all beneficiaries will face a sudden 14% benefit cut. Only 76% percent of 75-year shortfall is closed (34% of shortfall closed in 75th year). 

Clinton and others propose this change as a way to expand benefits. This begs the question how one uses the same money to do two separate things while not solving the main problem; making Social Security totally and permanently sustainable

If we are going to fix Social Security, let’s fix it rather than making more promises not paid for and requiring ongoing future changes. It can be done. Make the program self adjusting to remain sustainable as circumstances change in the future. 

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3 replies »

  1. Members of the boomer generation (born 1946-1964) still have 13 years before the last of us turn 65. After they leave the work force for good, there will likely be a true labor shortage.

    Just one mentioned way to keep people in the work force voluntarily is to stop the SS pay-roll tax once one hits a certain age, say 62 to 64. This gives an immediate boost to real income for the worker who then has an incentive to stay in the work force longer than s/he would otherwise, and still be paying federal income tax and not drawing SS annuity.

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    • Vince, this would only help if the SS tax the employer pays would go to the worker. $96 more per month on each $25,000 in income after paying the 25 % income tax is not enough. I am not sure $192 per month or more is enough to keep many on the job. When they can take their SS benefit of $1250 per month or more, it l looks better than staying on the job.

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