This is the best article about the threat to Social Security that I have yet
read. I hope you will join me in letting your congresscritter know of your
opposition to any changes to this fundamental of American life.
Hajja Romi
Serious Danger to Social Security
Social Security's funding security has gone away
A friend’s comments:
NOTE IMHO the so called compromise bill is the first real attack on Social
Security since its inception in 1935. It actually reduces funding when this
program needs more, not less of it. The Republicans must be drooling. They have
long considered SS and Medicare to be socialist programs. This is NOT change we
can believe in; this is change we can fear. It won't affect us seniors, but
certainly will affect our children and grandchildren's chances of having SS
there for them when they are our ages. This bill takes $120 billion out of the
soc. sec. funds each year. The shortfall in soc. sec. could be made up by
removing the cap on payments over $106,800, which favor the very rich; but the
Republicans have been adamant about any extra tax on the very rich, or any new
taxes on anything.
I searched the web for a good article on this, and found the one below which
explains it very well.
AARP and the other senior citizens organizations: Where are you when we need
you?
***********************
David Morris: Tax compromise adds up to a raw deal
Social Security's funding security has gone away
By DAVID MORRIS
STAR TRIBUNE MINNEAPOLIS-ST.PAUL MINNESOTA
Last update: December 14, 2010 - 7:14 PM
Commentary
Today, 75 years and four months since Franklin Delano Roosevelt signed the
Social Security Act, a Democratic president has abandoned FDR's strategy for
protecting the program from shifting political winds.
If congressional Democrats go along with Obama on this, it could mark the
beginning of the end of Social Security as we have known it.
Roosevelt regarded Social Security as the cornerstone of the New Deal.
Today, Social Security keeps more than 20 million Americans out of poverty.
Almost 90 percent of the elderly receive benefits: 69 percent receive more than
half their income from Social Security, and more than 40 percent receive 90
percent.
"No other New Deal measure proved more lastingly consequential," notes Stanford
historian David M. Kennedy.
One reason Social Security has proven so enduring and substantial is because of
the financing strategy chosen, a payroll tax.
Many of FDR's advisers wanted financing to come out of general appropriations.
They counseled, using an argument eerily similar to that offered today, that in
1935 the economy was still emerging from a deep depression and a payroll tax
would have a detrimental impact.
FDR understood the argument. But he believed it far more important to adopt a
funding mechanism that would protect Social Security from the depredations of
future politicians.
He had seen congressional Republicans overwhelmingly vote against the Social
Security Act, and he knew the political wheel of fortune would turn in the
future.
As FDR recalled in 1941, "We put those payroll contributions there so as to
give the contributors a legal, moral and political right to collect their
pensions. ... With those taxes in there, no damn politician can ever scrap my
social security program."
Social Security was to be an insurance fund. People paid in during their
working years and received payouts when they stopped working. The money was
theirs, by right. They didn't have to beg Congress for it.
But Obama's tax deal will cut the payroll tax by 2 percentage points, reducing
payments into the Social Security trust fund by $120 billion a year. Not to
worry, says the White House.
The $120 billion will come from the general fund. Social Security revenues
would remain intact. And the payroll tax reduction, they insist, will disappear
in two years.
Well, if anyone believes that in two years the Republicans will agree to raise
payroll taxes or that the Democrats will insist on it, I have a bridge to sell
you.
The payroll tax cut will be permanent. The elderly and disabled will have to
compete for $120 billion a year against all other claimants on the federal
budget -- the Pentagon, Medicaid, education, environment. Or, the payroll tax
will become a bargaining chip for a Republican demand that Social Security
benefits be reduced.
I suspect that the first step will be for politicians to undermine the "social"
in Social Security by insisting that the rich shouldn't receive benefits
because they don't need them. That may sound equitable, but means-tested
programs do not fare well. Look at welfare and Medicaid.
As Nancy Altman of Social Security Works, who has been leading the campaign to
educate the nation about the implications of the payroll tax holiday, observes,
New Dealers "understood the adage that programs exclusively for the poor made
poor programs."
The irony is that Social Security's finances do need bolstering.
As many have pointed out, the modest shortfall could be fully made up by
applying the existing payroll tax to incomes above the current cap of $106,800,
an income level exceeded by only 6 percent of the population.
Instead the Democratic Party has decided to decrease the payroll tax and double
Social Security's projected deficit.
The only obstacle to this ominous proposal is a revolt by House Democrats
against the whole tax deal.
One hopes they will hold firm and that, as the implications of the deal for the
future of Social Security become more widely known, the voters will rise up to
put a stop to this mischief.
__________________________________
David Morris, Minneapolis, is the vice president of the Institute for Local
Self-Reliance.
________________________________________
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