Social Security Fairness Act passes the Senate

[vt_shooter]

An insightful analysis of the changes by someone who will benefit from them, and who was an employee of the Social Security Administration for many years...
The Social Security Fairness Act: A $200 Billion Boondoggle, by Tom Margenau | Creators Syndicate

Mr. Insightful thinks social security benefits should be means-tested, but only if government pensions are involved, such as a town pension. If he thinks SS should be means tested, why not for everyone, like the guy with a $million in his 401K? (that day will probably come)

 

[BC38]

My PD pension, while decent, does not pay me more than I could have received in SS had I worked a higher paying private job.

I have almost 20 years into SS without counting what I paid in on part time jobs, while at PD, and may get $1500 if I am lucky.

I worked the PD job not to get rich but I should get what I earned.

Yeah, LEO isn't paid enough, that's for sure.
You're one of those I described as Person B above.
Someone who fits the profile of Person A who gets a great pension and who also paid into SS for 20 years getting the same $1500 benefit you get is the kind of unfair situation I was talking about.
It shouldn't be a one-size-fits all deal IMO.

 

[BC38]

Mr. Insightful thinks social security benefits should be means-tested, but only if government pensions are involved, such as a town pension. If he thinks SS should be means tested, why not for everyone, like the guy with a $million in his 401K? (that day will probably come)

Well, I don't have a million $ in my 401k, BUT what I have I got by NOT driving brand-new cars, or buying brand-new houses, or taking lavish vacations, etc. We've always lived well below our means and put away as much as we could towards retirement.

I never thought I'd get anything out of SS - I didn't figure it would be around long enough for me to collect it.

So, should I be "means tested" and denied SS benefits I paid for over my 45 year working career? Should I be penalized for NOT spending every dime I made - like so many others I know?

I realize that isn't what you're saying, but there are those in government who are.

Ever heard politicians float the idea of taxing unrealized capital gains? That is exactly what it would amount to.

Because my retirement investments are in stocks and mutual funds and a 401k that have all made significant capital gains.

And now they want to tax those gains and take some of it away from me - even before I actually receive it.

That amounts to penalizing me for having invested instead of living high on the hog all these years.

It is one thing to apply a means test to fixed-benefit plans that we have no choice about participating in - like SS or a government pension that was meant as a replacement for SS.

It is quite another thing to apply a means test to assets we have scrimped and saved our whole lives to acquire.

 

[biku324]

Mr. Insightful thinks social security benefits should be means-tested, but only if government pensions are involved, such as a town pension. If he thinks SS should be means tested, why not for everyone, like the guy with a $million in his 401K? (that day will probably come)

Then he is a socialist. Social insurance is simple - if you pay in, you draw out based on your contribution. It's not a freebie.

 

[GaryS]

At least not for those of us who work for a living.

There are also people who think that there should be an opt out option. They feel that they can do better than what SS will pay when they are ready to retired. That's if SS is still around then.

It always had some aspects of a Ponzi scheme to it, especially early on when the age was above the average life span for males. Since few females paid in, it was mostly men who would receive the payouts.

Then he is a socialist. Social insurance is simple - if you pay in, you draw out based on your contribution. It's not a freebie.

 

[Kinman]

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.

You touched a nerve with me on this subject. There were two different departments where I worked. The old guard were all on S.S., the new group were allowed an "alternative", by law they could take the alternative which took the required amount of money the employer would normally send to the IRS along with whatever amount the employee wanted to add and put it into a seperate IRA. Many of those people did much better than S.S. but as with most investments, there was no guarantee...unlike S.S. which does imply a certain degree of certainty. I'm all for people getting what they justly deserve but when like some were paid more up front instead of paying into social security I have little sympathy, especially if it was considered an option. We were a public entity and there were certain laws requiring the alternative to be equal to or better than social security. Our pension was handled seperately and ended up being a total cock-up until we petitioned and won the right to buy into the state pension program for every year were public employees. I got screwed out of nine years as a private employee but managed to secure my state pension with an $88K buy in from my 401K, couldn't be happier. Some were concerned about those that didn't make it into the time frame or retired prior to the new ruling. You can't cry over spilled milk.

 

[BC38]

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.

You are correct in stating that SS is a "tax" on the working man.

HOWEVER, you seem to be overlooking the fact that when the SS system was first proposed, it was "sold" to the American public based on the promise that if you paid into the system, you'd be GUARANTEED to receive a benefit from the system.

If the politicians had told the American people that they had no choice but to pay the tax, and that they MIGHT get some benefit from it - but they might NOT - then the proposal would never have been implemented and there would never have been a SS system to begin with.

Social Security was proposed and sold to the American public as a social contract. If you pay into the system, you'll receive a benefit for participating in the program. Period.

Attempting to deny any part of that is simply revisionist history IMO.

 

[johngalt]

You are correct in stating that SS is a "tax" on the working man.

HOWEVER, you seem to be overlooking the fact that when the SS system was first proposed, it was "sold" to the American public based on the promise that if you paid into the system, you'd be GUARANTEED to receive a benefit from the system.

If the politicians had told the American people that they had no choice but to pay the tax, and that they MIGHT get some benefit from it - but they might NOT - then the proposal would never have been implemented and there would never have been a SS system to begin with.

Social Security was proposed and sold to the American public as a social contract. If you pay into the system, you'll receive a benefit for participating in the program. Period.

Attempting to deny any part of that is simply revisionist history IMO.

Not really revisionist. In Helvering vs Davis, in 1937, the Supreme Court ruled that it did not violate the 10th Amendment because the spending under the act is allowed under the "general welfare" clause of the Constitution - it wasn't making promises to individuals.

So yes, it was sold that way, but they lied. And they were able to prop up the illusion because the taxpayer to beneficiary ratio was much higher then than now. Today the ponzi scheme is collapsing.

 

[H Richard]

I was always told that SSA was a "Supplement", and your retirement savings/pension should be your primary source of retirement income.

 

[BC38]

I was always told that SSA was a "Supplement", and your retirement savings/pension should be your primary source of retirement income.

Absolutely! But there was still the promise that by paying in you'd get something out.

But as johngault said - the promise is/was a lie.

Lying politicians - a redundant phrase.

 

[Autonomous]

Railroad Retirement was mentioned earlier. I'd like to make a clarification.
Basically, it is a mandatory employee funded annuity. It pays more than SS but it costs much more too.
So far it hasn't been successfully raided but greedy politicians have certainly tried.

I paid into SS for 15 years and RR for 30 years. My benefit is combined into one check. I could have them separated but there would be no advantage.

 

[biku324]

Absolutely! But there was still the promise that by paying in you'd get something out.

But as johngault said - the promise is/was a lie.

Lying politicians - a redundant phrase.

Who has paid in 40 qualifying quarters, reached retirement age, and gotten nothing out? In the past eighty years?

 

[BC38]

Who has paid in 40 qualifying quarters, reached retirement age, and gotten nothing out? In the past eighty years?

Nobody, YET.
Come 2032 (maybe sooner) that may very well change.
Especially if they keep changing the rules, pandering to special interests, to let people who HAVEN'T paid in for 40 qualifyinf quarters.
Unless I misunderstood, that is what this new rule change allows.
I may be mistaken about that, if so feel free to correct my misunderstanding.

 

[biku324]

So; the promise was made in the 1930s and is now still being kept - no lie there.

From 2033/2034 to 2097, according to the SocSec trustees, benefits can then be paid at 79% of whar they are now IF politicians are willing to anger the largest, most reliably voting group in the country by not fixing the system. The 2024 OASDI Trustees Report

 

[Kinman]

So; the promise was made in the 1930s and is now still being kept - no lie there.

From 2033/2034 to 2097, according to the SocSec trustees, benefits can be paid at 79% of whar they are now IF politicians are willing to anger the largest, most reliably voting group in the country by not fixing the system. The 2024 OASDI Trustees Report

While working in Union business I once was at a meeting where my Congressman Thomas Foley stood in front of us when questioned about loosing Social Security back on those days. The gist of what he had to say was that S.S. was never designed to be anything other than a supplement and the thing to remember is that nearly everyone in politics is likely on the path to receive S.S. benefits just like the rest of us, why cut off your nose to spite your face. Whether or not an individual needs the extra dollars in one thing, I have a wealthy friend that uses his S.S. income to buy a new Corvette every year or two.
The system has plenty of flaws. I know back when the Soviet Union collapsed and we seemed to be up to our eyeballs in former Soviet immigrants, they were put on S.S. roles in one form or another, as one of them told me "What a wonderful country." People that truly do not qualify for S.S. disability but have lost jobs in the coal industry have sympathetic/greedy doctors signing them up for S.S. then prescribing opiates for the pain of sitting around the house in your 40's with nothing to do. Call me cynical if you like...

 

[biku324]

But the simple fact remains that what was promised is being paid.

Here's the regulation on paying former Soviets: SSA - POMS: RS 02650.020 - SSA Restrictions on Payments to the Former Republics of the Soviet Union - 04/14/2022

Here are the rules for SSI for noncitizens:

Who can get Supplemental
Security Income?

To be eligible for SSI as a noncitizen, you must be in
one of certain classifications granted by the Department
of Homeland Security (DHS). You may be eligible for
SSI if you are:

• Lawfully admitted for permanent residence.
• Granted conditional entry.
• Paroled into the United States.
• Admitted as a refugee.
• Granted asylum.
• An alien whose removal is being withheld.
• A Cuban or Haitian Entrant.
• Admitted as an Amerasian Immigrant.
• Admitted as an Afghan or Iraqi Special Immigrant.
• Admitted as an Afghan humanitarian parolee or
Afghan Non-Special Immigrant Parolee.
• Admitted as a Ukrainian humanitarian parolee.

In addition to being in one of the above classifications,
you must also satisfy one of these requirements to be
eligible for SSI as a noncitizen:

• You were lawfully residing in the United States
on Aug. 22, 1996, and you're blind or develop a
disability.
• You were receiving SSI on Aug. 22, 1996, and
you're lawfully residing in the United States
on Aug. 22, 1996, and you're blind or develop a
disability.
• You were receiving SSI on Aug. 22, 1996, and
you're lawfully residing in the United States.
• You were lawfully admitted for permanent residence
and you have a total of 40 credits of work in the
United States. (Your spouse's or parent's work also
may count).
• You're a veteran or active duty member of the
United States Armed Forces, or a spouse or
dependent of a veteran or active duty member of the
United States Armed Forces.
• You're an American Indian born in Canada.
• You're a noncitizen member of a federally
recognized Indian tribe.
• You're a victim of severe forms of human trafficking.

There are others who may be eligible for payments. If
you're a noncitizen and want to apply for SSI, contact us
to see if you're eligible. https://www.ssa.gov/pubs/EN-05-11051.pdf

 

[sigp220.45]

This stuff makes my eyes glaze over. Did Biden sign the thing?

If my dole goes up, good. If not, no biggie.

50 years ago my paystub from Woolworths showed a deduction for Social Security. My Dad and older brothers said it would absolutely be gone by the time I was 65.

I'm 65 and have been getting paid for three years now.

 

[biku324]

It's signed, and if you login to your SSA account you should see your new annuity.

 

[BC38]

So; the promise was made in the 1930s and is now still being kept - no lie there.

From 2033/2034 to 2097, according to the SocSec trustees, benefits can then be paid at 79% of whar they are now IF politicians are willing to anger the largest, most reliably voting group in the country by not fixing the system. The 2024 OASDI Trustees Report

Oh, OK, they can make the program last - if they reduce everyone's benefits by 21%.

I believe those estimates were accurate when they were made. HOWEVER, that report was written in MAY - before this new rule change. The latest article I read said that the new rule will mean another 200 BILLION in payouts between now and then - and will accelerate the depletion of the fund to zero a few years sooner.

For older retirees like my parents, and my wife's parents, who are just barely surviving on their Social Security checks (and what we can afford to send them every month) this rule change is going to really HURT when the benefits have to be so drastically reduced. And they will have to be - unless Congress decides to significantly jack up the withholding rates on those who are still working. Another extremely unpopular proposal when so many people are just getting by paycheck to paycheck now. The numbers don't lie.

It probably won't hurt me too much, because I grew up knowing that SS was only going to be a portion of my retirement - if I ever got anything out of it - so I invested accordingly. Our parents didn't - they grew up being told that SS would ensure them at least a minimal decent standard of living.

It barely is living up to that promise now and when it becomes insolvent the 21% reduction will have devastating effects on their lives. Together they collect around $2900 a month. Reducing that 21% to less than $2300 a month will have a HUGE impact.

 

[BC38]

But the simple fact remains that what was promised is being paid.

Here's the regulation on paying former Soviets: SSA - POMS: RS 02650.020 - SSA Restrictions on Payments to the Former Republics of the Soviet Union - 04/14/2022

Here are the rules for SSI for noncitizens:

Who can get Supplemental
Security Income?

To be eligible for SSI as a noncitizen, you must be in
one of certain classifications granted by the Department
of Homeland Security (DHS). You may be eligible for
SSI if you are:

• Lawfully admitted for permanent residence.
• Granted conditional entry.
• Paroled into the United States.
• Admitted as a refugee.
• Granted asylum.
• An alien whose removal is being withheld.
• A Cuban or Haitian Entrant.
• Admitted as an Amerasian Immigrant.
• Admitted as an Afghan or Iraqi Special Immigrant.
• Admitted as an Afghan humanitarian parolee or
Afghan Non-Special Immigrant Parolee.
• Admitted as a Ukrainian humanitarian parolee.

In addition to being in one of the above classifications,
you must also satisfy one of these requirements to be
eligible for SSI as a noncitizen:

• You were lawfully residing in the United States
on Aug. 22, 1996, and you're blind or develop a
disability.
• You were receiving SSI on Aug. 22, 1996, and
you're lawfully residing in the United States
on Aug. 22, 1996, and you're blind or develop a
disability.
• You were receiving SSI on Aug. 22, 1996, and
you're lawfully residing in the United States.
• You were lawfully admitted for permanent residence
and you have a total of 40 credits of work in the
United States. (Your spouse's or parent's work also
may count).
• You're a veteran or active duty member of the
United States Armed Forces, or a spouse or
dependent of a veteran or active duty member of the
United States Armed Forces.
• You're an American Indian born in Canada.
• You're a noncitizen member of a federally
recognized Indian tribe.
• You're a victim of severe forms of human trafficking.

There are others who may be eligible for payments. If
you're a noncitizen and want to apply for SSI, contact us
to see if you're eligible. https://www.ssa.gov/pubs/EN-05-11051.pdf

Yeah, that is another significant problem. Giving SS payouts to people who didn't pay in - including non-citizens.
Is it any wonder the program is headed towards bankruptcy.