It was just a few weeks ago that cuts in Social Security looked like they had been taken off the table indefinitely but recent reports show that the sheer size of the budget deficit are having even Democrats take another peek at this sensitive issue. A Wall Street Journal story on March 21 said that the Democrats had broken ranks and some were favoring raising the retirement limit and other moves to help reduce the budget deficit. Senate Majority Leader Harry Reid (D., Nev.) and Sen. Chuck Shumer are said to be vehemently opposed to any such move, stating that Social Security is in a trust fund and cuts in it would have no impact on the deficit. Dozens of other Senators and the American Association for Retired Persons are also lobbying heavily against linking Social Security to the deficit. There are three Democratic Senators (Mark Warner of Virginia, Kent Conrad of North Dakota and Richard Durbin of Illinois) who are said to be leading the charge of doing just that, negotiating with three Republicans who together are now dubbed the "Gang of Six". They are looking to cut $4 trillion from the Federal budget deficit over the next decade in part by cutting entitlement programs.
Although in theory Social Security is in a separate fund which is not supposed to be linked to the deficit, in fact for decades the government took in more in Social Security withholding taxes than it paid out in benefits. The fund used this surplus to buy U.S. Treasury Bonds, effectively loaning money to the government out of the Social Security fund. The Gang of Six is now looking at raising the retirement age to 69 by 2075, increasing payroll taxes for high wage earnings and "trimming benefits for certain groups". No elaboration has been given on this plan for trimming, which will face huge opposition from many in the Senate, not to mention the American Association for Retired Persons, which represents those over 50 years old and has a huge lobbying budget. "Nobody wants to hit a buzz-saw called 'people over the age of 50,'" said American Association for Retired Persons spokesperson Nancy LeaMond.
There is no question we have a problem on our hands but it's surprising that politicians want to risk bringing up cuts to Social Security just prior to the Presidential elections next year. The fund is projected to be solvent through 2037, after which it would only be able to pay out about 75-80% of promised benefits. At Family inHome Caregiving of Monterey, we have Clients all over the Peninsula, from Carmel, Pacific Grove and Pebble Beach up to Seaside, Marina, Sand City and Moss Landing. They come from all walks of life, but they are all concerned about the lack of an inflationary (CPI) increase in their social security payments over the past two years while day-to-day costs like food, gas and medical bills shoot through the roof. I am urging them all to get out and vote. Please, make your voices heard on important issues like this.
http://online.wsj.com/article/SB10001424052748704360404576207070403848038.html?mod=googlenews_wsj
http://online.wsj.com/article/SB10001424052748704360404576207070403848038.html?mod=googlenews_wsj
Although in theory Social Security is in a separate fund which is not supposed to be linked to the deficit, in fact for decades the government took in more in Social Security withholding taxes than it paid out in benefits. The fund used this surplus to buy U.S. Treasury Bonds, effectively loaning money to the government out of the Social Security fund. The Gang of Six is now looking at raising the retirement age to 69 by 2075, increasing payroll taxes for high wage earnings and "trimming benefits for certain groups". No elaboration has been given on this plan for trimming, which will face huge opposition from many in the Senate, not to mention the American Association for Retired Persons, which represents those over 50 years old and has a huge lobbying budget. "Nobody wants to hit a buzz-saw called 'people over the age of 50,'" said American Association for Retired Persons spokesperson Nancy LeaMond.
There is no question we have a problem on our hands but it's surprising that politicians want to risk bringing up cuts to Social Security just prior to the Presidential elections next year. The fund is projected to be solvent through 2037, after which it would only be able to pay out about 75-80% of promised benefits. At Family inHome Caregiving of Monterey, we have Clients all over the Peninsula, from Carmel, Pacific Grove and Pebble Beach up to Seaside, Marina, Sand City and Moss Landing. They come from all walks of life, but they are all concerned about the lack of an inflationary (CPI) increase in their social security payments over the past two years while day-to-day costs like food, gas and medical bills shoot through the roof. I am urging them all to get out and vote. Please, make your voices heard on important issues like this.
http://online.wsj.com/article/SB10001424052748704360404576207070403848038.html?mod=googlenews_wsj
http://online.wsj.com/article/SB10001424052748704360404576207070403848038.html?mod=googlenews_wsj
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