SOCIAL SECURITY PART 5

HELLO WORLD

                        SOCIAL SECURITY PART 1       Published Dec. 30, 2010

                        SOCIAL SECURITY PART 2       Published Jan. 10, 2011

                        SOCIAL SECURITY PART 3       Published Jan. 17, 2011

                        SOCIAL SECURITY PART 4       Published Jan. 24, 2011

                        SOCIAL SECURITY PART 5       Published Jan. 31, 2011

SOCIAL SECURITY PART 5

STATE  OF  THE  UNION  SPEECH

Well, it has been quite a week.  The STATE OF THE UNION speech has pretty well dominated the political news this week.  There have been mixed feelings about how good or bad it was.  Personally I think it was pretty good, considering the position the President is in with the opposing party controlling the House of Representatives.  He has to be a little soft, in some ways, if he expects to get anything he wants through Congress.  On the other hand, I thought he was quite forceful at times.  For example, when he said that there was not to be any changes in Social Security.  That, however, doesn't change the fact that there is a problem that must be addressed.

Also, I don't recall of any President, before, stating that he would veto any bill that came to his desk that had earmarks in it.  I thought that was being very forceful.  Of course, the Republicans will attached some earmarks to a "must pass" bill and try to make the President back down that way.

The budget, and reducing spending is going to be the next big discussion in Congress and that is when the attacks on Social Security are going to start.  The Republicans are even talking about complete abolishment of SS and Medicare and substitute it with a voucher system and people can do whatever they want to do with the vouchers.  This is really a drastic move and we must watch real close as to what is going to actually be brought up for Committee hearings. 

THE  THREE  SOCIAL  SECURITY  PROBLEMS 

1. The need for the Government to repay the SS Trust Fund the 2+ trillion dollars it has, illegally, taken from the Fund.

2. The use of the Social Security (SS) premiums as though they are General Revenue.

3. Find a way to make up the short fall in receipt of SS Insurance premiums resulting from the severe recession we have been experiencing.

WHAT  TO  DO  ABOUT  THESE  PROBLEMS

Regardless of what the President had to say about SS, these three problems still exist and must be addressed.  There are a number of dates floating around, from different sources, as to when the SS Trust Fund will run out of money.  I have seen 2051, 2041, 2037 and 2015.   From what I have been reviewing, the most realistic, to me, seems to be 2041.  That is, of course, if the SS Trust Fund was repaid all that has been taken out of it for General Revenue.  Also. the 1982 study commission's plan would make SS solvent to 2041, which, they determined, would be the year that the youngest Baby Boomer would be 79 years old.  

LET'S TAKE A SUMMARY LOOK, AGAIN, AT WHAT COULD BE DONE ABOUT THESE THREE PROBLEMS AND HOW ALL OF US, TOGETHER, CAN MAKE IT HAPPEN.

NOW  THIS  NEXT  PARAGRAPH  IS  VERY  IMPORTANT

First, and of utmost importance, is to keep saying, and pointing out, what SS is and isn't.  It isn't an ENTITLEMENT PROGRAM.   It is an INSURANCE PROGRAM.  There is a big difference.  The official name is "OLD AGE, SURVIVORS AND DISABILITY INSURANCE" (OASDI).  Every official writing calls SS "INSURANCE."  Also, what is referred to as "payroll taxes" relating to SS, is not a tax at all. It is an insurance premium. The official name of that withholding is "FEDERAL INSURANCE CONTRIBUTION ACCOUNT" (FICA).  That means that it is your contribution to your SS account.  DID YOU GET THAT?  YOUR ACCOUNT --not the Government's General Revenue account.  You have every right to expect your account to pay for the benefits, that you have been told, by legislation, you should get at a certain time.

Now, I know that your contributions, since 1983, have been paying for your parents benefits, as well as your own.  That's the double whammy referred to in SS Part 4.  Never the less, it is your account as I have said above.

PROBLEM   NUMBER  ONE  --  GETTING  THE  TRUST  FUND  REPAID

Remember, the Special Government Bonds (IOUs) in the Trust Fund are included in the National Debt.  If the Government would borrow, from the public, the 2+ trillion dollars needed to retire those Special Government Bonds, the increase that would occur in the National Debt would be, immediately, canceled when the Special Government Bonds no longer exist.

That is the quick and simple way to solve problem number one, BUT HARD TO GET DONE.

PROBLEM  NUMBER  TWO  --  USING  THE  FICA  MONEY  AS  GENERAL  REVENUE.

Correcting this problem is not as straight forward as fixing problem number one.  As has been pointed out before, it already is illegal, per the Budget Enforcement Act of 1990, to use FICA money as General Revenue.  There are two things that could be done that might solve this problem. 

First, once again, in updated legislation, make it illegal to use FICA money as General Revenue. 

Second,  make it so widely known that it is illegal that Congress just wouldn't dare to, again, use the FICA money as General Revenue.  There may be other ways and maybe some of you can come up with more and better ways to solve problem number two.  Also, maybe some of you can come up with a better way to solve problem number one.

PROBLEM  NUMBER  THREE  --  MAKING  UP  FOR  THE  SHORT  FALL  RESULTING  FROM  THE  RECESSION.

While this is a real problem and needs to be solved, it is not as devastating as problems one and two.  As of 2009, the income cap for paying FICA was $106,800.00.  If this cap was raised, it would increase the FICA and help to off set the short fall.  At this time, this is the only thing that I know of that would help to solve problem number three. 

I don't want to get every body confused with the different groups of letters and terms.  You probably realize that "insurance premiums" and "FICA" are one and the same and "OASDI"  is "Social Security."

See you next week.

Floyd

PS:  After re-reading the above, I feel the need to add a little bit more.  I have now written six messages about SS.  As near as I can tell, there have been only 3 people that have read some or all of them.  My Son is one, as he edits these for me.  My Sister and Dr. Allen W. Smith PH. D.  are the other two.  Folks, there are consequences to all actions or non-actions.  You, apparently, have decided to take the non-action route.  Therefore, you will have to suffer the consequences and I do mean suffer.  Of course, I don't think anyone will be reading this either so it really doesn't matter.  I simply cannot imagine the amount of dedication Dr. Smith has used in spending 10 years of his life trying to bring about the right consequences.