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Friendly reminder that all we need to do to make it solvent is get rid of the cap.
It's insane we have a max limit and not a minimum. Someone making 160k won't even notice the 6.2% on all of it, someone making 20k tho the 6.2% is life-changing.
The existing system was never designed for this level of wealth inequality.
Unfortunately the Republicans want to break it further and the Dem leadership refuse to acknowledge the obvious solution.
the current wealth inequity is the main driver of all our current social ills.
It's actually insane how little payroll deductions hit when you're at the 401k and social security max for the year. It's normal to see 1-2k more per check. Everyone benefits directly or indirectly from social security and we should all pay into it.
Ultimately the cap is because there is a max on how much you can receive per month. So they align with each other. But honestly if you're at the point where you're hitting the social security cap, then it's not even going to be your primary source of retirement. In which case capping benefits but not capping contributions would hardly be noticeable, but would help keep social security solvent.
To be clear, a maximum on monthly benefit, not total!
Ultimately the cap is because there is a max on how much you can receive.
Its an insurance program. The cap on how much you receive is based entirely on how long you live. If you die at age 65, you get nothing. If you die at age 102, you'll potentially receive much more than you deposited. Same for if you're disabled or you're a dependent of an insured person. Paul Ryan bragged about his dead father's SS benefits paying for his college degree, while advocating for an end to the survivor's benefit program.
Given that wealthier people tend to live longer, it makes perfect sense to uncap how much they pay.
The monthly payout of social security is based on how much you earned while you were working, which is roughly correlated with how much you payed in [0]. However, the monthly payment has a hard cap. No matter how much you earned while working, SS will not pay you more than someone who averaged $168,600/year. Even below that cap, there is a progressive structure, where those with a lower income see a larger marginal benefit.
[0] not exactly, as it only looks at you inflation adjusted best 35 years
The monthly payout of social security is based on how much you earned while you were working
But the lifetime payout is set by how long you live. Your total recoupment is based on the number of months you receive SS. There is never an age when you lose eligibility.
Even below that cap, there is a progressive structure, where those with a lower income see a larger marginal benefit.
People with low incomes have a host of additional problems - higher stress levels, poorer nutrition, less access to preventative and life sustaining medication.
This lowers their overall life expectancy and - as a consequence - the total recoupment they expect to receive from SS.
Ultimately the cap is because there is a max on how much you can receive.
If you think OASDI is an investment...
It's not OASDI's fault you don't know what the acronym stands for.
What?! How in the world did you get that out of what I said.
There is a maximum monthly benefit. Maybe I need to go back and reword it or something, because this totally misses my point.
I assume they'll the Republicans will then refund everyone every single cent they've put in, right? Right?
Anyone who runs on "Social Security is bankrupt" is inevitably angling to bankrupt social security. These kinds of comments are a way of looting the system while insisting the vaults were empty the whole time.
At the end of the day, none of the parties can afford losing voters on social security. As always, they'll find a fix at the very last minute while spending all the time in the runup blaming each other. Same story every time.
none of the parties can afford losing voters on social security
The solution to this problem is to pitch SS as already in crisis and to campaign on a "fix" that makes it more solvent by reducing the number of people who rely on it.
Same story every time.
Because the problem is so big and there are so many consequences across so many districts to a change in SS policy, the easiest thing for Congress to do in the face of any proposed changes is to punt. However, we've seen SS cut successfully in the past. Reagan's "fix" to SS was to raise the retirement age (effectively a cut) and shift more of the tax burden onto the employees. Bush Jr came very close to a full scale privatization of the Trust, effectively turning the broad social program into a series of individualized 401k-esque savings accounts that the federal government would never suffer liability over. Obama can dangerously close to a big cut to retirement payments as part of the 2013 Debt Ceiling negotiations, only failing because Tea Party Republicans scuttled the deal and forced a continuing resolution to keep the government funded. Trump toyed with privatization again, with Paul Ryan's House championing a number of big cuts to Social Security that were ultimately parsed down to back-door cuts by way of how inflation was calculated (but this still ended up shaving billions off the next generation of program operations).
These cuts are always pitched as methods of preserving the program. They inevitably come at the expense of taxpayers, making the system less and less attractive to defend.
I think a lot of these apologists (whether they realize that's what they're being or not) don't realize that it's already not going to take care of anybody under the age of like 45 or something. That's just a rough estimate. Millennials will be the first group to not be able to rely on it, and we've known it for a long time. Gen Z seems to really know that it's not something they're going to have.
Unless things change dramatically.
Ohhh totaaaaalllly. Right after "Infrastructure Week".
In a future where dumpy is president until 2024.... six years pass
2026: "The problem with democrats is that they ruined social security! they are making it bankrupt!"-Republican Party, who voted down the "re-fund social security by taxing billionaires 1% more" bill across party lines in the senate, 51-49. (or simply filibustered forever...)
Massive economic collapse in Bush's last year as president
Repubs: Obama tanked the economy!!
Worldwide pandemic is his last year, ignored by the giant orange turd, caused most of the world to be shut down which tanks the world economy.
Repubs: nobody can afford anything in bidens economy!!
Would someone please give me the ELI5 on why Republicans want to destroy Social Security? Do they want to privatize it by making everyone put money into a 401K that is controlled by Wall Street money managers, who then skim their share? Are they STILL pissed about Roosevelt? Are rich Republicans pissed that poor people might not have to eat cat food in their old age? Is it that the foundational idea is that we all contribute...and that's COMMUNISM!?!? I just don't understand their motivation.
As some others have pointed out, paying social security directly costs companies money.
However, there is also a secondary set of costs to social security. Social security dramatically decreases a companies grip on a worker as the worker grows closer to retirement. A lot of workers would not be able to retire with out the income that social security provides. Without social security, once a worker passes the age at which they become less desirable for other companies to hire away then they essentially become slaves. And knowing you're heading towards what is essentially slavery is going to have a lot of knock-on effects too. Pay and compensation negotiations, changing companies, how afraid people will be of being fired, ect... Are all going to swing heavily into the companies favor.
Certain people are staunchly against what they call "handouts", even though Social Security is not that at all. The argument they make is that it costs other money to operate and maintain that they wouldn't need to spend if they just TRUST in whatever company would be managing that money if they privatize it. It's one of the dumbest arguments you'll hear about social programs.
The sad part is that I would hesitate to even call it a social program either - it’s the bare fucking minimum. It’s just taking the money that you paid into it and paying it back out to you later in life. It provides some financial structure and stability to those who otherwise would not have it, and that’s important, sure. But considering that this is height of our vital government social programs, then the bar is already so pathetically low. This is fighting to keep the scraps when private industry is already milking us for healthcare, education, public transit, utilities, etc, etc, etc, and it’s pitiful that we have to fight to even keep this.
To do my best ELI5::
They don’t want to pay ANY taxes; they want you to pay taxes.
It doesn’t matter if stuff fails; in fact that’s a feature not a bug. The very rich will pay for the stuff they need, and they DON’T care if you or everyone else suffers…. If you are not rich that is your own fault.
You were correct until tbe last sentence. That might be an excuse occasionally but it isn't actually part of the thought process. They simply dont care if you or everyone else suffers as long as they get what they want.
In short, oligarchs want to get richer and want more power (there's never enough), you would think that poor conditions would wake people up, but as long as there less fortunate ones as us we are fine with it. It is easy to set us up against each other by telling that our misfortune is because of minorities and immigrants.
There's a book called On Freedom by Timothy Snyder that talks about it. I think everyone should read it. Once you are aware of the mechanisms it is easy to see.
You would think that Republicans breaking social security would surely lose them votes, but it is really easy to manipulate their base and tell them that there's not enough money in SSN because immigrants are getting free money and once again we are fighting with each other and once again oligarchs walk away with more wealth.
The Social Security Trust Fund does not exist. It is an accounting fiction. When Social Security was passed, it came with a tax increase to offset the increased spending. For decades, the tax increase was greater than the spending increase, so the government spent the difference on other stuff; but made a note that Social Security had a surplus. However, since 2010, this flipped and the cost of Social Security has exceeded the income of its associated tax. The bean counters would the flip happened in 2021, but that is because they believe in the fiction of the Social Security Trust Fund, so that interest on the Trust Fund counts as income to Social Security, despite the fact that said interest is paid by the federal government.
So, why does this accounting fiction called the Social Security Trust Fund matter? Because it has the force of law. Under current US law, Social Security is exempt from the the typical budgetting rules. As long as the bean counters would say the Trust Fund has a positive balance, Social Security is authorized to increase it's budget to meet it's obligations. In contrast, most Federal programs get their budgets increased as part of the yearly budget (or a continuing resolution when Congress can't pass a budget. Or they just close when Congress can't pass a CR).
So, what happens when the trust fund runs out?
Option 1, Congress does not authorize continued spending at current levels. This is typically known as a spending cut. But because it is triggered by an existing law and Republicans have spent decades playing up the trust fund, they can act like this cut was a force of nature, and not them actively deciding to cut it in the congressional budget.
Option 2, Congress funds social security just like it funds everything else, through an appropriations bill. SS keeps operating, and becomes another political football in the annual budget fight
Option 3, Congress picks some way to tell the bean counters that the social security trust fund is still positive. Social security keeps operating at current lol levels, and remains exempt from the normal appropriations process.
So, what is all this talk about removing the cap on the Social Security payroll tax? If we ignore all the accounting trickery, that is about taking a regressive income tax payed by workers earning less that $168,600/year and turning it into a flat tax. Nothing whatsoever to do with social security, but I agree that a flat tax is better than a regressive tax. Still not as good as a progressive tax, which is the only thing that would have been politically viable but for the fiction that this tax is at all related to Social Security benefits (and their associated limit).
Social Security isn't even the only federal program to have this issue. Our highway system is payed for by the Highway Trust Fund, which is funded by a tax on gasoline. This fund has been insolvent since 2008, so Congress just included highway funding in their appropriations bills and payed for the difference like they pay for most Federal programs.
I get where you're coming from with all this, but you might want to source your statements for the folks who don't.
You wrote all of that, and you're still wrong.
How does that feel?