Social Security Fairness Act passes the Senate

dockmurgw said:
SS payments for people that didn't pay into the system. Yet again, the old goats are sticking it to the young that are being bled dry paying into the system and continue to have the day they qualify pushed out into the future. They have to pay the crippling .gov pensions, and now they have to pay for this. This is a terrible change; I pity the younger generations that have to pay for this.
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You touched on a not often discussed aspect of SS.

What most do not acknowledge and our elected officials do not make clear - SS is a tax. No different than any other tax. There's no promise of "I paid in, I get something back" or that it's our $$$ held in trust. Paying SS tax in no way creates an obligation for the government to pay out any money at all to those who paid the tax.

So the justification of "I paid in = give me $$$" doesn't apply. Likewise, those who didn't pay the tax can't really be excluded from receiving $$$ based solely on not contributing.

If a person doesn't pay property taxes or state or federal income taxes, are they denied police protection? Fire department won't respond? They can't send their kids to public schools? Nope all around.

What Congress just did is make clear with a big middle finger to everyone is that "paying in" has nothing to do with "paying out". And this is the 1st round of "sorry, you get nothing" to those coming down the pike expecting $$$.

I'm guessing there may be a lot of "hey pal, you got it all wrong - I paid in" responses. But separate the morality of the situation or public posturing by the government. It's a tax, and further - if you pay the tax and drop dead the day you are supposed to receive the benefit - that suits the government just fine.
 
The elimination of the WEP doesn't give benefits to people who didn't pay into the system, but eliminates the reduction of benefits to people who paid social security taxes on at least 40 quarters (ten years) of sufficient earnings to qualify for benefits, but paid into the system on less than 30 years of substantial earnings before retiring from a social security exempt position with a pension plan. There's an argument to be made as to whether elimination of the "windfall" is fair, but, contrary to what some have suggested here, this isn't provision of benefits to people who never paid into the system.

I submit there's less of a fairness argument to be made with respect to the repeal of the Government Pension Offset, which could drastically reduce a person's own social security benefits merely because their spouse retired with a government pension.
 
This isn't giving SS to someone that didn't pay in.

You will only draw based off what you did pay in.

For instance I had 16 or so years paying into SS prior to going to work for a PD that didn't pay it.

While working at said PD I paid SS on several part time jobs I worked.

Once I retired I have been working and paying SS again.

Under the WEP I am penalized approximately 50% of what I was entitled to based off what I paid in.

Now that has been corrected.

So I, and those like me were the ones getting the finger and paying into a fund to pay others what we paid in.
 
yaktamer said:
If you paid social security taxes on "substantial earnings" -- an amount set on an annual basis -- for at least 30 years the WEP wouldn't have affected you at all. It only applied to those with less than thirty years, with a sliding scale for the penalty, maxing out for those under 20 years.

I paid on 28 years of substantial earnings, so I wasn't looking at much of a reduction. The repeal will only net me about $117 per month more when I pull the plug. But I'll take it.

Correction: I think the 30 calculation was tied to the years prior to the one in which you turned 62 (???), so individual mileage may vary.
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But 2 of those 30 years were after I started drawing at FRA, so I should get a small bump up from whatever 28 years got me. Maybe.
 
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dockmurgw said:
Fairness Act...yea right. SS payments for people that didn't pay into the system. Yet again, the old goats are sticking it to the young that are being bled dry paying into the system and continue to have the day they qualify pushed out into the future. They have to pay the crippling .gov pensions, and now they have to pay for this. This is a terrible change; I pity the younger generations that have to pay for this.
Click to expand...

No - it's for those who paid in 40+ qualifying quarters or more beyond their pensions.
 
The WEP assumed you got a really fat retirement (think 65% or more of final salary, indexed linked) from wherever so the reduction would not hurt that much. Thing is that assumption is not always correct. In my case I got hit by the WEP because of a pension from the UK that had the benefits frozen after 28 years of contributions. Worse, because I came out of the scheme early, I got 35% of final salary (index linked, thank goodness). The max I could have got was 50% for working 40 years. Drawing on it early (before 60 years of age) would have killed the amount thanks to the actuaries.

The SSA girl was quite apologetic for the WEP hitting me because of the 20-year criterion given the amount of my UK pension. Fortunately, I knew that day would come and loaded up my US based IRA and 401k contributions accordingly. That and some inheritance money left me just about OK. Now the WEP is gone, I'll be $400/month better off, but I'm treating it as a cushion to be built up rather than an excuse to hit the toy stores every week.
 
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dsf said:
You touched on a not often discussed aspect of SS.

What most do not acknowledge and our elected officials do not make clear - SS is a tax. No different than any other tax. There's no promise of "I paid in, I get something back" or that it's our $$$ held in trust. Paying SS tax in no way creates an obligation for the government to pay out any money at all to those who paid the tax.

So the justification of "I paid in = give me $$$" doesn't apply. Likewise, those who didn't pay the tax can't really be excluded from receiving $$$ based solely on not contributing.

If a person doesn't pay property taxes or state or federal income taxes, are they denied police protection? Fire department won't respond? They can't send their kids to public schools? Nope all around.

What Congress just did is make clear with a big middle finger to everyone is that "paying in" has nothing to do with "paying out". And this is the 1st round of "sorry, you get nothing" to those coming down the pike expecting $$$.

I'm guessing there may be a lot of "hey pal, you got it all wrong - I paid in" responses. But separate the morality of the situation or public posturing by the government. It's a tax, and further - if you pay the tax and drop dead the day you are supposed to receive the benefit - that suits the government just fine.
Click to expand...

Correct. This was addressed back in the early days of SS, when the constitutionality of it was challenged (I forget the court case). The court ruled that SS is a tax that is paid into the general fund. Despite getting statements of taxes paid and estimated benefit, there is no account with your name on it, the government has no obligation to pay you anything, and you have no legal claim to receive anything. In fact, when SS was first created, current retirees at the time immediately received benefits, even though they had never paid any SS tax.

I think it was during the Reagan administration, but they decided they didn't like the large deficits that he was running up. So they changed the accounting rules so that the deficit could be offset by the SS fund surplus. Or in other words, they spent it.
 
WEP & GPO explained: Suppose you and I took identical paths, and both, fresh out of college, worked 25 years working for IBM, working the same job, for the same pay, paid the same into social security, and both took early retirements from IBM when they offered them. Both of our wives worked in the private sector for equal salaries, and made more than either of us did (ya hoo!). I stayed retired, you didn't, you decided to work for the state or the feds in a position that lead to a government pension, and you did not have you pay into social security during that government time. When we each hit 65 we decided to draw on the social security benefit from our IBM days. Because you worked for the government, your social security benefit would be about half of what mine will be. And since my wife had earned a greater social security benefit than me, if she passed before me, I would get hers (instead of mine); whereas if your wife passed before you, you would not get hers. That is what they just changed.
 
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johngalt said:
Correct. This was addressed back in the early days of SS, when the constitutionality of it was challenged (I forget the court case). The court ruled that SS is a tax that is paid into the general fund. Despite getting statements of taxes paid and estimated benefit, there is no account with your name on it, the government has no obligation to pay you anything, and you have no legal claim to receive anything. In fact, when SS was first created, current retirees at the time immediately received benefits, even though they had never paid any SS tax.

I think it was during the Reagan administration, but they decided they didn't like the large deficits that he was running up. So they changed the accounting rules so that the deficit could be offset by the SS fund surplus. Or in other words, they spent it.
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Have you ever noticed we get a recounting of our work history earnings along with a "this is what you'll get from SS" statement shortly after federal income taxes are due?

I believe this is called a "reach-around". And we all know what comes before a reach-around. :)
 
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326MOD10 said:
You will only draw based off what you did pay in.
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Except that you never "paid in" anything! You were paying a tax all those years. That's all. You were not paying money that went into an account, and was saved and invested for you, like they make it sound. You paid a tax. Now you are entitled to a welfare payment out. That's what it amounts to.

And, no, I am not some young guy who is going to get screwed 20 years from now when SS goes bankrupt. I am a retiree receiving SS payments right now. And I will get even more as a result of this new change. And I still think that it is WRONG!

They always talk about it using words that make it sound like you have a bank account somewhere, that has been building up over all these years, and once you retire you get to draw out of that account. That is COMPLETE BS!!! It doesn't work that way! Social Security is welfare for old people. Nothing more, and nothing less. You are only deluding yourself if you think that somehow you have paid in, and are now receiving your own money back.

I might just as well argue that I've been paying taxes all these years that went to food stamps, and the Dept. of Energy, and the Dept. of Defense, and so now I am entitled to get that money back in the form of free food, and utilities, and ammunition! It amounts to the same thing.

I know this rubs a lot of people the wrong way. Tough luck. This is the reality of how the system works, whether you like facing up to it or not.

Our government is trillions of dollars in debt. There is no "account," or "trust fund," or anything else, anywhere! It is all just IOUs from one government agency to another. How much is an IOU that you write to yourself worth? Yeah, that's what the Social Security "trust fund" is.

This is a massive problem that our Congress has been kicking down the road for decades. We are now only a few decades away from the time when it is going to explode in our faces. The good news for me and my wife is that we will probably have shuffled off this mortal coil before the bill comes due. The bad news is that our children are not nearly so lucky.

God help us all!
 
Denverd0n said:
Except that you never "paid in" anything! You were paying a tax all those years. That's all. You were not paying money that went into an account, and was saved and invested for you, like they make it sound. You paid a tax. Now you are entitled to a welfare payment out. That's what it amounts to.

And, no, I am not some young guy who is going to get screwed 20 years from now when SS goes bankrupt. I am a retiree receiving SS payments right now. And I will get even more as a result of this new change. And I still think that it is WRONG!

They always talk about it using words that make it sound like you have a bank account somewhere, that has been building up over all these years, and once you retire you get to draw out of that account. That is COMPLETE BS!!! It doesn't work that way! Social Security is welfare for old people. Nothing more, and nothing less. You are only deluding yourself if you think that somehow you have paid in, and are now receiving your own money back.

I might just as well argue that I've been paying taxes all these years that went to food stamps, and the Dept. of Energy, and the Dept. of Defense, and so now I am entitled to get that money back in the form of free food, and utilities, and ammunition! It amounts to the same thing.

I know this rubs a lot of people the wrong way. Tough luck. This is the reality of how the system works, whether you like facing up to it or not.

Our government is trillions of dollars in debt. There is no "account," or "trust fund," or anything else, anywhere! It is all just IOUs from one government agency to another. How much is an IOU that you write to yourself worth? Yeah, that's what the Social Security "trust fund" is.

This is a massive problem that our Congress has been kicking down the road for decades. We are now only a few decades away from the time when it is going to explode in our faces. The good news for me and my wife is that we will probably have shuffled off this mortal coil before the bill comes due. The bad news is that our children are not nearly so lucky.

God help us all!
Click to expand...

Yes, Social Security is a tax - it also pays, by law, a specific benefit to every taxpayer based on what they paid in and for how long. Never, ever has SocSec not paid what they owe those who've paid in enough money for long enough. Speculating that it may someday default is doing exactly that, speculating, and doing so about something that has never once happened since the inception of the program.

Social Security, Workmen's Compensation, Unemployment Insurance are all social insurance - if you pay enough, long enough, you get benefits in the circumstances they cover.

When someone doesn't get their proper benefit, then complaining will be justified - it is not now justified; the 90 year history of SocSec bears this out. Folks can also take the administering agencies to court if they feel they've actually been treated wrongly on benefits.

We could imitate Russia.

The social pension in Russia is currently 6,242 rubles (approx. $82), which is below the subsistence level that varies from region to region. That is why pensioners are compensated the difference between the subsistence level and their social pension. Thus, in Moscow, the social pension in 2022 is 21,193 rubles (approx. $280), whereas, for example, in Barnaul it is 10,882 rubles (approx. $143) and in Vladivostok, 12,119 rubles (approx. $160).

Is it possible to survive on a pension?

In 2019, the Russian Audit Chamber calculated that, in order to survive on a pension, a pensioner in Russia has to live on not more than 200 rubles (approx. $2.60) a day. According to the Audit Chamber, this is the amount pensioners will have left for groceries after paying their utility bills and buying medicines. Spending on clothes and footwear not envisaged at all. How much money would you receive if you were a pensioner in Russia? - Russia Beyond
 
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Well, I did pay in something and I have the pay stubs to prove it.

It may be a tax and it may go into the general fund but at this point the system shows here is what I get in return.

Next month that may all change and I may never see a dime.

Bottom line is this provides some relief for folks right now. I don't see the US miraculously getting itself out of debt anytime soon but in the mean time every little bit helps.

You can respond with an overly long explanation of how I am an idiot if you like. I really don't care because all I know for sure at this very moment is I stand to get double what I would have when I start to draw.



Denverd0n said:
Except that you never "paid in" anything! You were paying a tax all those years. That's all. You were not paying money that went into an account, and was saved and invested for you, like they make it sound. You paid a tax. Now you are entitled to a welfare payment out. That's what it amounts to.

And, no, I am not some young guy who is going to get screwed 20 years from now when SS goes bankrupt. I am a retiree receiving SS payments right now. And I will get even more as a result of this new change. And I still think that it is WRONG!

They always talk about it using words that make it sound like you have a bank account somewhere, that has been building up over all these years, and once you retire you get to draw out of that account. That is COMPLETE BS!!! It doesn't work that way! Social Security is welfare for old people. Nothing more, and nothing less. You are only deluding yourself if you think that somehow you have paid in, and are now receiving your own money back.

I might just as well argue that I've been paying taxes all these years that went to food stamps, and the Dept. of Energy, and the Dept. of Defense, and so now I am entitled to get that money back in the form of free food, and utilities, and ammunition! It amounts to the same thing.

I know this rubs a lot of people the wrong way. Tough luck. This is the reality of how the system works, whether you like facing up to it or not.

Our government is trillions of dollars in debt. There is no "account," or "trust fund," or anything else, anywhere! It is all just IOUs from one government agency to another. How much is an IOU that you write to yourself worth? Yeah, that's what the Social Security "trust fund" is.

This is a massive problem that our Congress has been kicking down the road for decades. We are now only a few decades away from the time when it is going to explode in our faces. The good news for me and my wife is that we will probably have shuffled off this mortal coil before the bill comes due. The bad news is that our children are not nearly so lucky.

God help us all!
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I don't know how to double "like" so I'll say "hear hear!".

326MOD10 said:
Well, I did pay in something and I have the pay stubs to prove it.

It may be a tax and it may go into the general fund but at this point the system shows here is what I get in return.

Next month that may all change and I may never see a dime.

Bottom line is this provides some relief for folks right now. I don't see the US miraculously getting itself out of debt anytime soon but in the mean time every little bit helps.

You can respond with an overly long explanation of how I am an idiot if you like. I really don't care because all I know for sure at this very moment is I stand to get double what I would have when I start to draw.
Click to expand...
 
No one ever said that anyone here is an idiot. Certainly not me. I'm just saying that the way they talk about the system is very misleading. It does not work the way that they try to make it SEEM like it works.

And it is true that Social Security has never defaulted on payments... yet. It's also true that our government has never been even remotely close to how far in debt they are right now. Relative to GDP, we are MUCH further in debt now than we were at the height of WWII, or during the Civil War, or any other time in our history. Think about that. We are more in debt now, during a time of relative peace, than we have been during the worst and most expensive wars in history.

The bill is going to come due some day, and when it does, it will NOT be pretty!
 
From Trustees Report Summary

Based on our best estimates, this year's reports show that:

• The Old-Age and Survivors and Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, unchanged from last year's report. At that time, the fund's reserves will become depleted continuing program income will be sufficient to pay 79 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund is projected to be able to pay 100 percent of total scheduled benefits through at least 2098, the last year of this report's projection period. Last year's report projected that the DI Trust Fund would be able to pay scheduled benefits through at least 2097, the last year of that report's projection period.

The above is if they change nothing. But the Congress isn't going to cut every SocSec recipient 21% in 2034; those over 65 vote in greater numbers than any other age group. Congress will do what they did Friday when the govt was about shut down - fix it at the last instant in the stupidest possible way.

And debt isn't good but we are far from the condition of some other major economies.

Top 10 Countries with the Highest Debt-to-GDP Ratios (%)

Japan 264% (4th largest economy in the world)
Venezuela 241%
Sudan 186%
Greece 173%
Singapore 168%
Eritrea 164%
Lebanon 151%
Italy 142% (same GDP as Russia)
United States 129%
Cape Verde 127%

Debt to GDP Ratio by Country 2024
​
 
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