Bernie Sanders puts Social Security challenge to Hillary Clinton

[Don2 (Don1 Revised)]

Sen. Bernie Sanders on Wednesday urged Hillary Clinton to back a plan endorsed by leading Democrats and seniors’ advocates to strengthen Social Security.

Sanders has introduced legislation to make the wealthiest Americans who make more than $250,000 a year pay the same share of their income into the retirement system as everyone else. Current law now caps the amount of income subject to payroll taxes at $118,500.

Sanders’ plan is patterned after a proposal to scrap the cap first brought forward by President Barack Obama in 2008. Senate Minority Leader Harry Reid of Nevada in the last session of Congress was a cosponsor of Sanders’ legislation to scrap the cap on the payroll tax.

“I hope Hillary Clinton joins us because I believe that we’ve got to stand with seniors,” Sanders said. “We need not only to extend social security benefits, we need to expand them,” he added.

http://augustafreepress.com/bernie-sanders-puts-social-security-challenge-to-hillary-clinton/

There is also a time-limit cap on whether you've payed into SS long enough, 10 quarters I think.

I don't mind paying extra into SS or paying into SS for a few more quarters provided that

• money is used to increase the longevity of SS (which will benefit everyone including myself);
• money is used to make cost of living increase that failed to be added this year (which also will benefit everyone including me).

What are your thoughts?

 

[AthenaAwakened]

Sen. Bernie Sanders on Wednesday urged Hillary Clinton to back a plan endorsed by leading Democrats and seniors’ advocates to strengthen Social Security.

Sanders has introduced legislation to make the wealthiest Americans who make more than $250,000 a year pay the same share of their income into the retirement system as everyone else. Current law now caps the amount of income subject to payroll taxes at $118,500.

Sanders’ plan is patterned after a proposal to scrap the cap first brought forward by President Barack Obama in 2008. Senate Minority Leader Harry Reid of Nevada in the last session of Congress was a cosponsor of Sanders’ legislation to scrap the cap on the payroll tax.

“I hope Hillary Clinton joins us because I believe that we’ve got to stand with seniors,” Sanders said. “We need not only to extend social security benefits, we need to expand them,” he added.

http://augustafreepress.com/bernie-sanders-puts-social-security-challenge-to-hillary-clinton/

There is also a time-limit cap on whether you've payed into SS long enough, 10 quarters I think.

I don't mind paying extra into SS or paying into SS for a few more quarters provided that

• money is used to increase the longevity of SS (which will benefit everyone including myself);
• money is used to make cost of living increase that failed to be added this year (which also will benefit everyone including me).

What are your thoughts?

I agree with Bernie. The Cap has never made sense to me and unlike Rightwing economics, SS really does lift all boats

 

[dismal]

I agree with Bernie. The Cap has never made sense to me and unlike Rightwing economics, SS really does lift all boats

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

 

[SimpleDon]

We saved Social Security once already in 1986 when we increased the payroll tax to raise more money than was being paid out in benefits. Over the period from 1986 to today this tax increase, the largest single tax increase in history, has totalled over 2 trillion dollars more than was paid in benefits.

The money was used over this time in the general fund, paying for defense, paying for welfare, etc. and allowing tax cuts largely for the wealthy, because they pay most of the taxes. We are now told that this money can't be repaid by the general fund to pay for Social Security benefits, because only payroll taxes can be used to pay these benefits.

That all of the tax receipts from the excessive payroll taxes collected over the last thirty years or so went into the general fund to provide tax relief for the wealthy, but we can't expect the general fund to now fund Social Security, because it might require a tax increase on the wealthy to do so. That this would be intergenerational theft, because it would be a tax on today's wealthy to pay for tax cuts for yesterday's wealthy.

In essence the whole argument boils down to that the government can't save money.

If you accept this argument, and conservatives do accept it, then you can't accept the intergenerational theft of the Social Security payroll tax either. Because it is paying taxes today to pay today's benefits to people who paid much lower payroll taxes themselves. And you can't accept the existence of a Social Security Trust Fund to do more than to cover short term mismatches of tax collections every quarter versus benefits paid every month.

If Social Security is useful and a benefit for the nation as a whole, it should be paid for out of the general fund. If it is not useful and a benefit to the whole nation then it shouldn't be funded at all. The people who believe the latter should propose eliminating Social Security and let the chips fall where they may come election time.

It is really that simple.

 

[jonatha]

I agree with Bernie. The Cap has never made sense to me and unlike Rightwing economics, SS really does lift all boats

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

- - - Updated - - -

We are now told that this money can't be repaid by the general fund to pay for Social Security benefits, because only payroll taxes can be used to pay these benefits.

Somebody's saying we can't cash in the special bonds Social Security holds (in exchange for all those loans to the general fund) and use the proceeds to pay the benefits?

 

[Jimmy Higgins]

I'm against raising the cap. I think that a FICA tax of 12.2% should be added to all investment income above the Social Security cap, so if the cap is $120,000, any investment income above $120,000 should be subject to the FICA tax, no ceiling.

 

[dismal]

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

 

[SimpleDon]

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

- - - Updated - - -

We are now told that this money can't be repaid by the general fund to pay for Social Security benefits, because only payroll taxes can be used to pay these benefits.

Somebody's saying we can't cash in the special bonds Social Security holds (in exchange for all those loans to the general fund) and use the proceeds to pay the benefits?

In a more general sense they are denying the rationale behind the intergenerational theft of insurance. Or confirming that they don't understand the rationale behind insurance in general. Which they repeatedly confirmed with statements like the ACA makes me pay for benefits I can never use.

 

[SimpleDon]

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

- - - Updated - - -

We are now told that this money can't be repaid by the general fund to pay for Social Security benefits, because only payroll taxes can be used to pay these benefits.

Somebody's saying we can't cash in the special bonds Social Security holds (in exchange for all those loans to the general fund) and use the proceeds to pay the benefits?

Yes, they are saying that. They don't want to payback the bonds because it probably would require a tax increase, since they can't find enough spending to cut. The portion of discretionary, non-defense, spending is only about 6% of the federal budget including SS now. And they want to increase defense spending. And every Republican presidential candidate is proposing more tax cuts, largely for the rich.

Ask dismal if he supports paying for Social Security benefits out of the general fund.

 

[dismal]

Ask dismal if he supports paying for Social Security benefits out of the general fund.

As opposed to what? What we have now is not different in any material respect than if it all came out to the general fund so it seems hard to get too worked up about if that would be the only difference.

 

[SimpleDon]

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

This is true if you ignore the temporal. For the entire history of the Social Security system and to today the benefits for all recipients has been much more than they paid in.

 

[Horatio Parker]

Eliminate FICA, fund SS from the general fund.

The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

http://www.huffingtonpost.com/warren-mosler/the-mmt-grand-bargain-rai_b_2268875.html

 

[SimpleDon]

Ask dismal if he supports paying for Social Security benefits out of the general fund.

As opposed to what? What we have now is not different in any material respect than if it all came out to the general fund so it seems hard to get too worked up about if that would be the only difference.

So you agree that there is no problem with Social Security and that it is fully funded through 2030, assuming the worse possible economic conditions?

I am sorry, I misjudged you. But you have to agree that this is not the position of the Republican party.

 

[untermensche]

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

Is that how it works with all insurance?

Or just SS insurance?

 

[dismal]

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

This is true if you ignore the temporal. For the entire history of the Social Security system and to today the benefits for all recipients has been much more than they paid in.

This is true, but I wouldn't describe it as a temporal problem. If you want to call it a problem at all. It's a fact that has been masked by demographics for the last several decades, if that's what you mean by "temporal".

But if you look at the long range forecasts for SS there is a ~20% funding gap between current taxes and current benefits when the baby boom demographics even out.

 

[dismal]

As opposed to what? What we have now is not different in any material respect than if it all came out to the general fund so it seems hard to get too worked up about if that would be the only difference.

So you agree that there is no problem with Social Security and that it is fully funded through 2030, assuming the worse possible economic conditions?

I am sorry, I misjudged you. But you have to agree that this is not the position of the Republican party.

It's not "funded" at all. The government pays it as it goes.

 

[coloradoatheist]

As opposed to what? What we have now is not different in any material respect than if it all came out to the general fund so it seems hard to get too worked up about if that would be the only difference.

So you agree that there is no problem with Social Security and that it is fully funded through 2030, assuming the worse possible economic conditions?

I am sorry, I misjudged you. But you have to agree that this is not the position of the Republican party.

It's not fully funded though, just an accounting gimmick. Congress can say we'll extend SS benefits until 2500 and it will depend on if the government can raise enough taxes or borrow it for that period of time.

 

[untermensche]

So you agree that there is no problem with Social Security and that it is fully funded through 2030, assuming the worse possible economic conditions?

I am sorry, I misjudged you. But you have to agree that this is not the position of the Republican party.

It's not "funded" at all. The government pays it as it goes.

That's like saying no insurance plan is funded.

They just pay as they go along.

 

[coloradoatheist]

It's not "funded" at all. The government pays it as it goes.

That's like saying no insurance plan is funded.

They just pay as they go along.

Yes and no. Usually the plan needs to have assets that an auditor believes would be enough to cover future costs. The US government has no assets to cover the future costs.

 

[untermensche]

That's like saying no insurance plan is funded.

They just pay as they go along.

Yes and no. Usually the plan needs to have assets that an auditor believes would be enough to cover future costs. The US government has no assets to cover the future costs.

There are problems with the plan, but they are based on assumptions that are not panning out.

The plan assumes wages will rise over time, especially if the overall wealth of the nation is rising.

It didn't anticipate so much wealth would be taken by so few, a major flaw in the economic system.

The way you overcome this economic flaw is to tax the most wealthy who take the most and who are harmed the least by taxes.

And you apply these taxes to the SS system.

Until one day a fair realistic economic system is devised.