OK: what's your plan for Social Security? There is, of course, a (modest, but real) actuarial shortfall over the medium-to-long term. What should be done about it? Nothing? Push the retirement age up a bit? Raise the amount of taxed income? Some combination?
Are there any other changes you would like to make in Social Security?
Sunday, December 12, 2010
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Extend the income contribution limit.
ReplyDeleteTax the rich, share the wealth.
(Let them return some of the ill-gotten gains they receive from their lobbying and politician-buying.)
Option 2: Establish a live-in "Adopt The Retired" program whereby the rich allow a few lower-class families to live on their estates.
It's so obvious that it is unthinkable to the beltway crowd. Of course, that's because it would require them to pony up more of their own fair share:
ReplyDeleteLift the cap on taxable payroll back up to 90% on the employee side, and eliminate it on the employer side.
So that'll never happen.
Lift the cap and charge the payroll tax to a much higher level than currently-- at least to $250,000 if not higher and then they could also lower the rate some for everybody. I don't think they should up the age because it's been pointed out to me that hard laboring people (like my father) don't live any older than they ever did. Upping the retirement age would be unfair to them.
ReplyDeleteMy plan would be to means-test, but start with the oldest people. So, if you're 100 or older, your payments would be means-tested. Over time, the age at which means-testing starts would drop, perhaps by a quarter-year or half-year per year, so by the time today's newborns are 70, their payments would be means-tested.
ReplyDeleteI don't know the actuarial numbers for this, but I think such a plan would be fair, as the people who tend to live the longest are also well-off, and most of their money will just be passed down to someone else.
Gradually lift the wage cap (to capture about 90 percent of wages/salaries again) and also gradually increase the 6.2 percent tax rate (people should contribute more to cover their extra years of receiving retirement benefits, caused by life expectancy increases). We're talking extremely slow and not burdensome tax increases over several decades--increases far less than wage increases--to preserve the system and benefit levels. It's surprisingly easy. And the increases can be halted if the trustees find that their projections were overly pessimistic, which has happened in the past.
ReplyDeleteMy "if I were king" plan for Social Security would be to turn it into a basic income system.
ReplyDeleteTotally off topic but: in his column in the Jan/Feb TAP (www.prospect.org/cs/articles?article=telling_tales) Robert Reich off-handedly calls for "resurrection of the fairness doctrine for broadcasters," so there's something to cross off on your bingo card.
ReplyDeleteDon't make it means tested, that is the first step in marginalizing the program.
ReplyDeleteIt is really fairly simple: raise the cap on taxable income -- if you make it, tax it. Why even cap it at 90%? While you are at it, make the whole rate structure progressive on the first $100k or so, then flatten it out up to 100%.
Yes, I realize that will encourage the growth in non-payroll compensation, tax that too -- there is no reason why I should have a better effective tax rate (unless you believe on piss-on-the-little-people, I mean "trickle down" economics) because I make enough much I can afford to get some compensation in insurance, deferred compensation, etc. rather than cash wages. The "lock box" or "trust fund" is imaginary anyway. Improve general revenue, and Social Security is fine.
Medicare, on the other hand...
Don't just raise the ceiling - remove it. Subject all income - every penny of salaries, wages, bonuses, dividends, capital gains, and anything else I might have forgotten.
ReplyDeleteNo means testing needed; no raising the retirement age needed. With a broader contributory base, the percentage could be reduced, probably quite substantially, since the upper 1% make more than the bottom 50%.
Cheers!
JzB
I'm with JzB...the ceiling makes no sense whatsoever to me. It is flatly regressive.
ReplyDeleteHowever, I also favor raising the retirement age, and changing the basket of goods used to calculate SS increases, making medical services and goods a bigger component. This latter change might actually increase SS costs, but I don't like the idea of making a program solvent just to have it not quite work. Hence, raising the age and increasing the take (by killing the ceiling)
Here is the thing about raising the retirement age, that people who are actually at the table with respect to policy don't get.
ReplyDeleteTake a truck driver. A truck driver must pass a physical every two years to keep his commercial license. Over the years, it is inevitable that the truck driver experiences permanent hearing loss on the traffic side. There is a threshold of hearing ability under which the driver can no longer hold his license, even with hearing correction. In addition to that, after long years of pounding the highways, he suffers lumbar compression, so he suffers diminished capacity to stand for long periods. Now, after 30-40 years of pounding the highways delivering your T-bones and TeeVees, he loses his commercial license due to his hearing loss, and he can't be a WalMart greeter because of his back problem. Neither condition will qualify for disability. What to do? What to do?
A nurse. On her feet caring for patients for 30-40 years -- not standing but walking, turning, running, kneeling, eventually the varicose veins get excruciatingly painful. Diminished eyesight makes it dangerously difficult to read the tiny font on the med labels, more difficult to put in an IV tube or a catheter, diminished hearing compromises the ability to take a blood pressure. Her aching feet prevent her from doing a full shift as a WalMart greeter. What to do? What to do? These conditions do not qualify as a disability -- they aren't, really.
A machinist. Diminished eyesight, diminished hearing. An auto worker, diminished strength to move those car bumpers into place, to sling those tires any longer. A waitress, years and years on the feet, no longer bright and attractive. A floor manager, on his feet all day. A landscaper, bending and cutting and hauling. A traveling sales person -- Willie Loman, no longer able to close the deal. A cop, a public health investigator, becoming more and more of a target in the bad neighborhoods where they spend their working life, unable to run or jump over fences to escape the junkyard dogs. An FBI investigator. An electrician. A construction worker. A farmer. What happens to these people when their bodies wear out?
These are not the "back-breaking" jobs, but common, every day jobs that the majority of workers do to make a living every day.
Yet, they don't get to be at the table when it is getting decided whether to raise the retirement age. No, the people at the table are those whose jobs, cushy jobs opining and pontificating and spending a few hours a few days a week lecturing, those who have no clue what physical work does to a body after 30-40 years. The people at the table are those whose professions enable them to work -- without competition -- into their 70's or 80's.
Here's the thing. The VAST majority of American citizens like Social Security just the way it is. They are not in favor of raising the retirement age. So the pontificators need to deal with that reality, and find another way to deal with the purported shortfall, 40 years from now. The people want and like Social Security the way it is. Leave it the hell alone.
Hmm. Or how about this. Better idea. Let's go with JzB all the way.
ReplyDeleteRemove ALL compensation caps. Social Security Trust Fund would be floating in money. Reduce the retirement age to 60. Mandatory retirement for all university professors and politicians and corporate CEOs and journos at age 65. After all, they made Walter Cronkite retire at 65. Just think of all the calcified columnists that could be replaced by better pontificators: David Broder, Richard Cohen, George Will.
This scheme will bring the unemployment rate waayyy down: Fewer people in the labor force. More job mobility: Younger workers wouldn't have to wait for someone to croak to get a promotion. It will increase productivity: Imaginative younger go-getters would replace the worn out, calcified Old Guard. And in all likelihood, it will reduce Medicare costs: Workers will spend fewer years driving their worn out, arthritic bodies beyond their useful life before they get the pittance that Social Security provides for a lifetime of hard work.
So simple, so elegant. I'm surprised no one else is floating the idea.
I see a very strong case for making SS more generous. But that pipe dream aside, I would wait until at most 10 years before the actual date SS benefits first exceed revenues before making any changes. Economic projections several decades into the future are almost completely worthless. It doesn't make sense to put more burdens on the elderly, workers, and employers before it's absolutely necessary. Let's wait and see where we stand closer to the deadline date. The projected shortfall is fairly small in the scheme of things. There's no urgency to address it this far in advance.
ReplyDeleteIf we want to do something about the medium term and long term financial problems of the government, we should look at general revenues, defense, and health care instead.
Allow more young high-skill immigrants to enter the country! Their contributions will keep the system afloat.
ReplyDelete