Newsweek Article - How Should Social Security Be Reformed ?

[LisaS961881]

 
   I just wanted to share an article that I read this morning :

https://www.newsweek.com/social-security-funding-reform-seniors-consider-options-2103944

     ~ Lisa 🌈🙋💰🤔

[LisaS961881]

….. a gloomier article just three weeks later:

https://www.newsweek.com/americans-fear-end-social-security-poll-2113953

     ~ Lisa 🙋

[GailL1]

@LisaS961881 

So Do You think that President Reagan with the help of a Democratically lead Congress could get the changes they passed in 1983 - passed today in this political climate?

I would say “NO” - 

[LisaS961881]

  Gail - I totally agree.

With both political parties being more concerned with tearing each other down rather than reaching across the Maginot Line and creating a solution together, I cannot foresee a comprehensive solution anytime soon.

   Yup - gloomy….

[sktn77a]

When Social security was first implemented, average lifespans were less than the retirement age(65).  Today, average lifespan is almost 20 year longer than retirement age.  No wonder it's going broke.

Raise the full retirement age to 70 and raise the early retirement age from 62 to 66.

[GailL1]

I hear and read everybody saying that it would be fixed if we raised the cap - NOPE Not unless the benefits of those who are paying in so much more is also limited - very limited.  So how is that fair as the article thinks people feel - ?

So what happens to those who work (2) jobs and make over the cap?  Right now, they and their employer get their withholding back.  

EDITED TO ADD:  The Social Security Actuary when analyzing various proposals also look at behavioral responses - the founded ones.  

What they say over and over again is  “We assume employers and employees will

redistribute total employee compensation among taxes, wages, and other compensation. This behavioral response reduces the increase in both payroll tax revenue and scheduled benefits that would occur in the absence of this behavioral response.”

MY BIGGEST SUGGESTION and it could be done right away - is to have employees and employers begin to pay withholding taxes for both Social Security and Medicare on the employee health benefits that employers give as a benefit instead of salary to their individual employees.  Itis still compensation and should be treated as such.  Plus it would also increase our tax revenues.  WHY iS THIS NOT EVER TALKED ABOUT AS A FIX or at least part of the fix?  

If we want to tax investment income for Social Security and maybe even Medicare, then I think it should all investment income should be taxes for everybody - not limited by income level.  

Would those paying more into the SS system with this tax on investments get any benefit based on this or is it only for funding for those who are getting a benefit.

Personally,I think we also need to revise some of the benefits - especially the early retirement.  OH, there is nothing wrong with filing for retirement benefits early but a person should not be able to get auxiliary benefits when they are just filing for early retirement.  

I also think that we did a disservice to the whole system by eliminating the WEP and the GPO instead of passing a new formula.  But the deed has been done - BIPARTISANLY - so who are I.  Will those same people stand up for the higher earners getting their just benefit when they are paying in more by increasing greatly or eliminating the Social Security cap?  

[RickS467730]

You’re raising important questions—and I agree that raising the cap alone isn’t a magic fix, especially if benefit formulas aren’t adjusted alongside it. But we also have to be careful about policies that treat higher earners like bottomless ATMs without a proportional return. That undermines the “earned benefit” premise of Social Security.

You also make a strong point about behavioral responses. If we keep hiking taxes on labor or investment, people will naturally shift compensation structures or delay work—hurting the very funding we’re trying to protect.

As for taxing employer-provided health benefits—technically that’s compensation, yes, but there are real consequences to making those benefits more expensive for both employers and workers. It could even push more people onto the public system or reduce employer coverage altogether.

I’ve said in the Social Security section a few times now that I’m personally more drawn to ideas like partial privatization—something along the lines of the Sweden model or President Bush’s proposed carve-out accounts. These give younger workers the chance to earn market-based returns while still protecting current retirees and those close to retirement. But every time it’s suggested, it gets dismissed outright as “unacceptable,” without even a serious debate.

Your point on WEP and GPO is also spot on. I’ve said before that repealing them without creating a fair and thoughtful replacement was a mistake. Bipartisan or not, it weakened the long-term credibility of the program. If we’re asking higher earners to pay significantly more, fairness demands they see a benefit tied to that extra contribution.

We can’t fix this if we won’t talk openly about tradeoffs and realistic, forward-thinking options—especially ones that don’t just raise taxes or keep pushing the retirement age up. Too many people shy away from opposing viewpoints, and that’s part of why we’re stuck.

[Tonster521]

@RickS467730, The Scandinavian countries have very high tax rates compared to the USA. In the USA, you can save the difference in tax rates and contribute that money to an IRA or 401 K and end up with a better result. https://taxfoundation.org/blog/scandinavian-social-programs-taxes-2023/  

[RickS467730]

Scandinavian models do come with higher tax burdens overall. But the Sweden Social Security reform wasn’t about raising taxes; it was about restructuring how contributions are used. Their system includes a mandatory, individualized investment account carved out from payroll taxes—essentially a form of partial privatization within a public framework.

The key difference is: Sweden made structural changes to make their system solvent for the long term. We haven’t. And while Americans can save in IRAs or 401(k)s, the reality is most don’t—or can’t. That’s why a carved-out account within Social Security, like Bush proposed in 2006 or Sweden implemented in the ‘90s, deserves another look. It preserves the “earned benefit” premise while giving younger workers a chance to grow their retirement through market-based returns. That should go hand in hand with cutting waste and making real reforms to our current broken system.

Optional savings plans are great—but they aren’t a replacement for fixing the core system. We need both reform and personal responsibility—and yes, that includes cutting waste.

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[LisaS961881]

   Rick,

       I agree that we need that “thoughtful disagreement”.  It seems to me that we are currently hindered by both parties’ “groupthink”.

      When I finished reading what you had written, I remembered JFK’s Think Tank with wistful nostalgia.  Now, more than ever, I believe we need that type of bare-bones analysis and honesty.  
       
       I imagine that, if the innovative “outside the box” ideas that are being generated in this forum were even suggested in those hallowed halls, the individual proposing them would be scathingly branded, “not a team player”.  In retrospect, maybe that’s why the WEP and GPO were simply lopped off. Maybe, not only was there a sigh of relief that this was a bipartisan effort and a quick and easy “fix”, but also there was an underlying certainty that asking the hard questions would lead to dissension within the two groups.  And, well, that just couldn’t be allowed to happen.  

      Thank you.

               ~ Lisa 🙋

[RickS467730]

I couldn’t agree more about the dangers of groupthink—it’s a huge barrier to honest reform. Thoughtful disagreement and “outside the box” thinking are essential, but too often they’re treated as threats instead of opportunities.

And you’re absolutely right: both parties today seem more worried about how their constituents feel than about taking real action. That’s a big part of why we keep getting temporary patches instead of permanent fixes.

As for WEP and GPO, they weren’t just quietly phased out—they were eliminated under President Biden, and not through a serious, well-reasoned replacement formula. It was a political move designed to look like progress, but it dodged the harder questions and long-term consequences.

We need more of what you said—something like JFK’s Think Tank. A place where the focus is on long-term solvency, not political optics. Because until we’re willing to challenge comfortable narratives—on both sides—we’re not getting anywhere.

[GailL1]

@RickS467730 wrote. . . . . we also have to be careful about policies that treat higher earners like bottomless ATMs without a proportional return. That undermines the “earned benefit” premise of Social Security.

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I completely agree although many don’t seem to share our agreement - 

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@RickS467730 wrote . . . . As for taxing employer-provided health benefits—technically that’s compensation, yes, but there are real consequences to making those benefits more expensive for both employers and workers. It could even push more people onto the public system or reduce employer coverage altogether.

========================

That’s true and I support both employees and employers paying more for these employer provided benefits to be considered what they are - compensation.  WE will reap the rewards 

1.  The employee will earn a higher Social Security benefit for their contributions to the Trust Funds

2.  The employee and the employer will pay more in taxes as they should in this situation.

3.  The employer will also pay more in the matched amount of withholding taxes helping the system to become healthier financially.

4.  I like the idea of decoupling from employer provided health benefits - and would help each person to realize the cost of healthcare fully and their use of it.  Nothing makes this hit home harder than having to pay for ones own health insurance. 

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@RickS467730 wrote . . . . I’ve said in the Social Security section a few times now that I’m personally more drawn to ideas like partial privatization

=====================

Sounds fine to me also - in fact perhaps something akin to the Governments Thrift Savings Program for some government employees and some military.

But I do not see much support for employees to like this - but that's because it would have to be their nickel directly invested into this program - OH, MY they may have to learn something and make a decision for themselves.  I mean why don’t people set up their own IRA and fund it now?  Especially if their employer does not have a plan.  

Getting employers to do these “life” things for employees is for many of them a crutch - from supplying health insurance to setting up investment vehicles to save for retirement.  Many of the employees are willing to let the employer do it all - take their money, choose the investment(s) or pick the insurance plan(s); some don’t even make a choice - only checking the box of letting the employer decide. 

Even when they leave the company - many of the retirement investments stay right there - sometimes not even earning anymore - WHY??

In my state, legislators have been trying to set up a state plan for employers to set up retirement savings accounts for employees - these  would be funded by the employee and would be portable - but it cannot get leverage from many of the legislators.

The Federal Secure Act and the Secure 2.0 Act established a retirement savings for employees - wonder how those might be going?

=========================

In my rather advanced age, I have become quite the cynic - maybe I have just been on boards such as this or reddit for too long and have been disillusioned - To have an open mind, one has to have one to open.  To consider workable solutions , one has to understand how the programs work to begin with and many don’t.  

All I hear many times is “we want this or we NEED that”; tax the more well off to pay for it - seems to be successful nowadays, many others think there has been some shenanigans - so they should pay more for the more of us. 

You can take up the shaft of change here - I’m retiring. 

[Tonster521]

@gail1, The subject of taxing health insurance benefits has been tossed around in the past. As I recall, the question that needs to be answered is how do you tax the health insurance benefits. Many employers are self insured. Smaller employers may buy reinsurance in addition to self insurance. So, do you tax (issue a 1099) when a claim is paid. This can be a financial burden for large claim payments. For example, a hospital claim for $35,000 is paid. Do you issue a 1099 for $35,000 to that individual. How would you withhold FICA and Medicare taxes? The other approach is to develop the average cost per employee per year and increase their W2 or issue a 1099 for that amount. For example, $5,000/year employee only and $12,000/year Family. There is going to be a shortfall on their W2 inasmuch as only wages/salaries are FICA/Medicare taxed. Moreover, there are folks that never use their employee benefit plans for years. Do you issue them a 1099 or increase their W2 for benefits that they have not received . Think "phantom taxes". FYI, when the ACA was considering the "Cadillac Tax", it was levied only on the employer. The ACA left it up to the employer if they wanted to pass those increases to the employees/participants via an increase to the employee contribution amounts. I do not believe it was ever resolved how to address the Plans that did not have an employee contribution. Anyway, the "Cadillac Tax" provisions were rescinded after two delays.

[GailL1]

@Tonster521 

As stipulated by the ACA, employers must show their contribution to their employees health insurance benefit and I, believe, any portion that an employee pays, on their annual W-2.  This is not taxed now in any way.  The amounts are listed more for compliance and in determining the % to salary since this is a stipulated % measure for the employee’s ability to either buy their share of the coverage OR be eligible for an ACA plan if the % is above a certain measure.

If an employer is self insured - they still have to assign a value to the plan because if not, they are shooting in the dark as to the cost and I am pretty sure that any smart employer would not do this - it opens up too much of a liability to them.  They know how much the ESI is costing them per employee.

That is the part that should be considered as part of their overall compensation package just like other fringe benefits.

The only reason this has not been done is because of a very old statue that exempts this BENEFIT from the compensation measure.  Employers love it because it saves them lots of tax dollars.  

If it goes on that W2, it should be taxed as compensation both for the employer and the employee.

It is one of the MAJOR tax expenditures we have because we are not taxing this employee benefit as compensation - Which this benefit is - a part of the overall employee’s compensation.

TaxPolicy Center - What are the largest tax expenditures? 

from the link ~

The third largest tax expenditure (an estimated $190.3 billion in fiscal year 2021 is the exclusion of employers’ contributions for employees’ medical insurance premiums and medical care. Under this provision of the tax code, contributions are excluded from an employee’s gross income, while an employer may deduct the cost as a business expense.  Treasury estimates this provision will cost $252.4 billion in 2024.  JCT’s estimate of this tax expenditure is smaller than Treasury’s estimate because JCT assumes that, absent the exclusion of employer contributions, individuals would claim a larger itemized deduction for the higher health insurance costs they would incur.

[Tonster521]

@gail1, the ACA does require employers to report the value of Healthcare coverage. Generally, the amount reported includes both portions paid by employers and employees, if any. Some Unions negotiate that employers pay 100% of the cost. Anyway, the reporting is for informational purposes only. The concept is that such information will provide employees with useful and comparable information on the cost of their Healthcare coverage. Because it would be a cumbersome task to report each employees' specific cost for Healthcare coverage in an employee benefit plan, the IRS suggests 3 methods: the applicable COBRA premium method; a modified COBRA premium method; or the premiums charged for fully insured Healthcare coverage. In a self funded Plan, there are no premiums that are paid to an insurance company. So, for most employees in the USA (approximately 80% or more), their Healthcare coverage is provided by an employer via an employee benefit plan rather than an insurance company. Many employers use an insurance company or a Third Party Administrator to pay benefits (claims) via an Administrative Service Agreement with such organizations. So, a self insured employer does not pay the reported value that appears on a W2 to an insurance company unless that Plan is fully insured. Generally, most employers with over 100 employees find self funding is more cost efficient. However, smaller employers with as few as 50 employees may self fund and buy reinsurance to reimburse the employer for benefit payments (claims) over a certain dollar amount whether individually or in aggregate. Essentially, an employee benefit plan reimburses an employee for covered Healthcare expenses they incur while eligible for such coverage. The amounts of reimbursements can vary from employee to employee and from year to year ($0.00 to $millions). The questions that needs to be answered are do you tax an employee based on an informational value even though such employee received $0.00 or less than the informational value? Or, do you tax the employee on the actual amount of benefits paid or reimbursed to such employee for the Healthcare expenses they incurred during the calendar year? The current Regs.,as I understand them, will tax the employee for the actual amount of benefits paid if an employee benefit plan is non-qualified. This is why compliance with ERISA in maintaining a qualified plan is important. 

To compare a parallel benefit (short term disability) that is available in some employee benefit plans, employees who receive STD pay taxes based on the amounts they receive. They are not issued an average amount based on the average cost per employee. I realize the Government can change the rules from time to time, and they have. 

In summary, employee benefits are not considered as part of an employee's base pay. They are considered part of a total compensation concept, but many benefits are not monetary unless they are needed and used. How do you tax benefits not used? 

[LisaS961881]

  Tonster, Gail, Rick, and TR,

Just a quick interjection here.  Today I just found yet another article about this bi-partisan proposal. 

https://thehill.com/business/budget/5439992-bipartisan-senate-social-security-plan/

This article is clearly stating that this one proposal would only be a “part” of the solution, and that a bi-partisan committee would be formed to address the pending fiscal crisis.  I was relieved to read the acknowledgement that this has happened before - during Reagan’s administration.  I believe that is why he made the decision to tax Social Security benefits, but maybe I’m confusing my presidents.

I am getting the sense that there is a growing understanding that this situation needs to be examined in depth from multiple perspectives, and that a true “solution” will encompass many tweaks, outright revisions, and lots of stuff on the cutting room floor.  

Personally, I am a bit more hopeful.  Two prominent articles about Social Security on The Hill and Newsweek websites in just a week!  It’s not sexy, it’s not an ad for jeans, but it is important. 😇

Thanks - please keep informing us on this Forum. It matters.

   ~ Lisa 🙋🩵

[RickS467730]

I disagree with the framing in The Hill piece. Kaine’s approach leans toward a more socialized solution, which I’m firmly against. The Reagan plan worked well for its time, but today we need an immediate infusion of funds to stabilize the system.

I’ve said many times that partial privatization should be part of the long-term future of Social Security, but that’s not the immediate fix. For the short term, we need to cut waste without cutting benefits.

In a private discussion, I outlined roughly $4 trillion in targeted savings—by reforming administrative overhead, reducing duplicate programs, tightening disability eligibility, and streamlining how we manage federal entitlements. None of this touches earned benefits, and it buys us critical time to implement deeper reforms.

[GailL1]

@RickS467730 wrote  . . . . we need an immediate infusion of funds to stabilize the system.

—————————-

Well that ain’t gonna happen -

This Cassidy/Kaine proposal does not fix the Trust Fund, all this proposal does is provide a work-around so that benefits are not cut by about 20% around 2034.  

The overall system changes to shore up the whole program has to be done in spite of this Cassidy/Kaine proposal.

I don’t know what Senator Kaine’s proposals are to fix the fiscal problems of the Social Security Trust Funds or the program at large.  

This one is just a work around to pay the benefits that are gonna be cut when the program runs short around 2034.  That’s it.

[RickS467730]

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@GailL1 wrote: Well that ain’t gonna happen -

___________________________________

True—but that’s exactly my point. A work-around without a real fix just kicks the can. We need an immediate infusion to stabilize the system now, paired with structural reforms to make it solvent long term. Otherwise, we’ll be right back here in a few years debating another “patch” instead of fixing the foundation.

__________________________________________________________

Gail also wrote: "I don’t know what Senator Kaine’s proposals are to fix the fiscal problems of the Social Security Trust Funds or the program at large"
-----------------------------------------------------------------------------------------------

From what I’ve seen, Senator Kaine’s broader approach leans toward a more socialized model, which doesn’t address the investment side of the equation or focus on cutting waste and tightening the system to ensure sustainability.

[GailL1]

Yea- the Cassidy/Kaine proposal come up short in my book - 

Only solution would be to sell marijuana or do a GOFUND ME drive.

[Tonster521]

@LisaS961881, Thanks for posting the article from The Hill. I was not aware of the Cassidy/Kaine proposal. I had to read it three times to ensure I was understanding their accounting/financial analysis. As I understand the proposal, they are attempting to raise $300 Billion for 5 years in a row or $1.5 Trillion by borrowing the money (sell long Treasuries) and not increase the National Debt. Their belief is that the money ($1.5 Trillion) will be placed in a type of escrow account separate from the existing SS Trust Fund for 70 years and such borrowed money will not be included in the amount of National debt. For comparison, if you own or owned a house, you probably did not buy it for cash. You borrowed the money and used the house as collateral. You still have debt until you pay off the loan (mortgage) or sell the house. Either Cassidy/Kaine are aware of new Financial Accounting Standards (FAS) approved by the Financial Accounting Standards Board (FASB) or they are creating their own FAS on the proverbial "back of a napkin", I do not know how they are not raising the National Debt. Moreover, the SS Trust needs the money now, not 70 years into the future. So, why are they focusing on the long term when the SS Trust is expected to be depleted in 8 or 9 years?

I agree with GaiL1, don't get too excited about a "Commission". If history tells us anything, we are maybe two elections away from any Commission. Because you have indicated an interest in this subject, I suggest you read through the Greenspan Commission's Findings and Recommendations (22 in total). The Report is at the SSA website. It is lengthy and includes a substantial amount of numbers/analysis. The Report was the basis for the SS Amendments in 1983. It should be noted that the economy was shaky due to inflation for many years during the mid to late 1970's. As I recall, inflation reached a high around 11% in 1979. I bought a house in 1977 and had a 8% mortgage which, at that time, was a good deal. Today, people complain about 6%. The economy went into a recession in 1980 for a short period. Then it dropped again from July 1981 to November 1982 which was recorded as the worst downturn since WW2. The unemployment number reached at least 11% using BLS methods for counting. As you may not know, the BLS does not count you as unemployed after Unemployment Compensation is exhausted. In the real world, unemployment could have been double or triple the 11% figure. The SS program was doomed. The SS Trust was estimated to reach depletion ($0.00) in August 1983. For many years prior, Congress and it's bosses, the Presidents, were not proactive. President Reagan had to do something because the demise of the SS program was now on his watch. Although Congress put through the 1983 SS Amendments signed by President Reagan, the long term funding issue was not resolved. The Greenspan Commission recommended that Congress revisit the issue in 2010 and implement a small FICA tax increase from 0.062 to 0.067 for both employee and employer. On $100 of Covered Earnings, FICA taxes would increase from $6.20 to $6.70. As you know, nothing has been done in this regard. The FICA tax rate has essentially been the same since 1990. There was a reduction in 2011 and 2012. It returned to 6.2% in 2013. 

It is not clear why Cassidy/Kaine do not suggest to simply deposit $1.5 Trillion in the SS Trust and buy Special Treasuries that the SS Trust use for funding. If they are concerned the interest rate on the Special Treasuries is too low, Congress can simply increase the rate. 

[GailL1]

The Cassidy/Kaine proposal is interesting - I think we should post the Hill article as a separate post to see what others here might have to say - probably nothing but who knows. What do others in this conversation think about this?

I didn’t read it like you, @Tonster521 - I read it as they would be investing the $300 billion for 5 years to = 1.5 Trillion in investment.  This would come from our Treasury but only as an investment that will be paid back in time - 70 years./ 75 years

This proposal does NOTHING to fix the income / outgo problems that we have with the Social Security Trust Fund which are actually problem we have with the Social Security programs themselves - ALL this proposal does is stop the benefits from being cut around 20% in 2034 or there about.  THAT’S IT.  

HOW IT WORKS ~

1.  the government would create an investment fund separate from the existing Social Security trust funds, into which the government would place $300 billion annually over the next five years.

2. The money would be invested into stocks, bonds and other investments, and it would be held “in escrow for 70 years.”

So no touching for 70 years.  

3.  Any dividends being paid, for example, flow back into the investment fund. So like a DRIP - dividend reinvestment plan

4. As that occurs, we also repeal the law requiring that benefits be cut to match income,  So no cuts to benefits because the Trust Fund reaches insolvency because there is this backstop of earnings but without direct access to these “profits” at the time.

5. The Treasury Department would be responsible for making up the payments for those 75 years.

So Treasury has this [invested and earnings] money on their balance sheet and they are paying the WHOLE amount of any Social Security benefits claim during this 70 - 75 years period - the Treasury would be making up the difference in any SS Trust Fund shortfall year by year.

6.  At the end of this 70 - 75 year period,  the investment fund would pay back the Treasury Department and use its remaining funds to supplement Social Security payments.

7.  So what the Treasury will get back is the

(a) initial investment of 1.5 Trillion +

(b) any money they have put out during the 75 years to make the SS Trust Fund pay out the 100% of benefits - since the Treasury has been picking up any short fall in the income and expenses of the SS Trust Fund during those 75 years.

Personally, it is just a way for government (they don’t even deserve a capital G) to avoid what is coming . .. . . . 

Now IF they combined it with some real law changes to increase the Trust Fund income AND some real law changes to modify the cost of the program, meaning perhaps cuts in benefit design, 

increasing retirement ages, whatever -

The Social Security law changes to benefits + or -  HAVE to come 1st before any of the Cassidy/Kaine proposal is put into play!  

I just don’t see government willing to make these Social Security changes - they are more interested is GIVING MORE - like the Social Security Fairness Act and trying to sooth the masses from paying taxes on their benefits.  

Even the proposals that are coming on board about fixing the solvency problem in the Trust Fund are concentrated on giving more to some and then taking more from others.  

Here I go again - being a CYNIC - Please prove me wrong.

Fixing the program of Social Security is not just about talking more from some and giving more to others in some financial balancing act.  It is a societal problem - and one that I don’t think we can fix - not with the current mindset of most of the population and not with politicians of whatever variety.  

[Tonster521]

@gail1, There is nothing wrong with being a cynic. I believe we need to question and analyze just about everything that comes from the government. With regard to Congress, I would think that the senior members would "lead the way" and the juniors would follow. It appears to me that the seniors have "sat on their hands" with funding the SS program (OASDI and Medicare). I agree with your analysis and will add additional concepts to think about for all of us to review and comment.

I believe the Cassidy/Kaine proposal requires the sale of long Treasuries to raise the $1.5 Trillion. Currently, the longest Treasury Bonds are 30 year. Maybe, there is another part of the proposal to create longer term TBonds (i.e., 50 year, 70 year, 75 year). Who is going to buy these TBonds? If the TBonds are market valued, their prices will fluctuate with interest rates. The same for Corporate Bonds, if not more dramatic, since Corporations cannot tax the population nor print money to make up any loss in value. This is the reason why the SS Trust invests in Special Treasuries (ST). The ST can be redeemed for full value any day along with any interest earned. The ST's only issue is that the interest rate follows a formula authorized by Congress that compares to 5 year Treasury notes. An easy solution is to change the formula which has been in place for 50 to 60 years and increase the interest rate that the Government pays on the ST. No need to take on market risk which will fluctuate over time. I believe long term the USA economy will remain the largest economy on Earth. So, investing in the economy via equities will be rewarded, but the rewards are not consistent month to month. The SS Trust needs revenue. In other words, more income each month to make payroll. 

The Cassidy/Kaine proposal does not indicate how the Treasury will obtain money to pay the approximate 20% shortfall when the SS Trust is depleted. Does the Treasury sell more securities (i.e., TBills, T Notes, and/or TBonds)? If so, the $1.5 Trillion is growing along with interest due on the original and subsequent Treasury sales. This reminds me of paying some of a credit card balance with another credit card.Keep in mind, while this scheme is going on, not one penny is being deposited in the SS Trust to grow. So, the SS Trust is depleted to zero ($0.00) in approximately 2033 or 2034 and there is no solution to grow the funds. 

There is another item that the readers should be aware of: interest on all of those Treasuries for the 70 to 75 year period of time. Using 4% as an interest rate, the original $1.5 Trillion will pay about $60 Billion/year or about $4.2 Trillion over 70 years. I have no way of guessing the amount that the Treasury will need to pay to keep everyone's SS Benefits at 100% after the SS Trust is depleted in either 2033 or 2034. If that amount is $200 Billion/year (20% of $1 Trillion of SS benefits/year, this can accumulate to $14 Trillion over 70 years. You need to add interest in addition to those yearly TBond sales over 70 years. My guess is that the amount owed to the Treasury may accumulate to $20 to $25 Trillion or more after 70 years. Remember, the original investment of $1.5 Trillion is in an Treasury escrow account , not the SS Trust. Can that $1.5 Trillion grow enough to cover the above guesstimate ($25 Trillion)? Maybe. If so, the Treasury has to be paid. I still do not know how the Treasury can sell TBonds and not record the debt. Maybe it is a new Financial Accounting Standard that only Cassidy/Kaine know about. Or, is it something they created on the proverbial "back of a napkin" after one too many?

[GailL1]

@Tonster521 

I think you have asked the Twenty thousand dollar question - rather in this case the 1.5 Trillion dollar question.  Please sit down - I do not want you to fall when laughing so hard with what I am about to say.

Their plan is short on details in the beginning or maybe they are thinking like many government reps think - money grows on trees.  

In order for it to work as designed, the investment money has to come from someplace other than the government - no room for paying out any interest; we need no more debt !

So the only solutions would be we sell something or we sell many somethings - government land, other type real estate, vehicles, equipment, marijuana 🤓, buy the rights to all the GLP-1 drugs, things that are “HOT” and will move in the marketplace.   Do we own any small countries that somebody might want to buy the real estate?   I don’t know enough about crypto to even go there - but I do know that people BUY stuff - we just have to sell them the stuff they want. 

IF we did a national lottery several times a year, I bet people would buy tickets cause everybody wants that get rich quick plan.  We do pretty good here in GA with our Peach State lottery - it has been going a very long time - 30 years and we pay for a lot of kid’s higher education (HOPE Scholarships) and Pre-K for all of our 4-year olds. We do about 300 million +/- a year.  Multiplied by 50 surely we can earn some money for the “Social Security Trust Fund Benefits Fill-in Plan.”

What about TIPS but just for 30 years - at least we would not lose principal if the plan is a bust - right?  Plus if it is a disaster, we could sell them at anytime - right?  Been a long time since I invested in TIPS directly. 

In reality, I think we, ans beneficiaries,  are just gonna have to make our budgets work with 20% less - Or the government will just go into more debt for whatever number the shortfall is every year.  Or those of us who are better off may just be the losers and we turn Social Security into another welfare type program.  

The Cassidy/Kaine plan comes up short in my book.  But actually the plan is par for government.  It is like the person that is already in debt up to their eyeballs thinking that if they just got one more interest free for an interim credit card that they will be home free.  

I have no idea what we are gonna do - seems no politician is ready to make some really hard decisions because the decisions they make may just take away their job.  

If all else fails, there is alway the GOFUND ME method.

[GailL1]

@LisaS961881 

Don’t get too excited about a “Commission” - it’s not like we haven’t been here before with “Commission” input - Plus, there is so much partisan divide - most likely whatever comes out of the “Commission” even if it is a bipartisan group - won’t ever make it to any sort of legislation to fix all the problems.  

The Greenspan Commission was the only one that ever did anything and that was because, the Social Security Trust Fund was in an emergency condition and President Reagan and House Speaker, Tip ONeill (Dem) knew it and things HAD to be done. 

The Advisory Councils got replaced by the Social Security Advisory Board in 1994 and then it got disbanded in 197 

• National Commission on Social Security (1981): This commission performed a comprehensive analysis of the system and offered recommendations, though they didn't lead to immediate legislative changes.
• National Commission on Social Security Reform (Greenspan Commission) (1983): This commission was formed in response to a short-term financial crisis and their recommendations formed the basis of the 1983 Social Security Amendments, which addressed the crisis.
• Advisory Councils: These councils were mandated to review the status of the Social Security Trust Funds and their long-term commitments every four years. This practice was replaced by the Social Security Advisory Board in 1994. 

A provision of Social Security Act required an Advisory Council on Social Security every 4 years to review the status of the Social Security Trust Funds and their relationship to their long-term commitments. This provision was repealed under the Social Security Independence and Program Improvements Act of 1994. The Advisory Councils have been replaced by the Social Security Advisory Board.

The last Advisory Council was appointed in late 1994, continued working until 1996 and and released their final report in 1997. This Council focused on the long-range financing issues of the Social Security system.

Then under Pres Bush there was the The 2001 President's Commission To Strengthen Social Security - (8) Republicans and (8) Democrats - Nothing / Nada 

President Obama didn’t fair much better - he rejected a proposal for a statutory commission and appointed one himself by EO - and they took on Social Security, Medicare and Medicaid - but to not much avail.  The Commission on Fiscal Responsibility and Reform better known as Simpson - Bowles 

I think the “deemed filing rule” came out of this last one - it stopped some double dipping.

The Bipartisan Budget Act of 2015 made some changes to Social Security’s laws about filing for retirement and spousal benefits.

Well, enough about history - even the changes that came about as a result of some of these “commission” were and are gripped about - I mean just today I saw your post about the taxes on Social Security Benefits - that was one of the changes that helped save the program back in 1983 - the reason why the limits were NOT link to inflation is because this tax was designed to bring in more and more money and taxing more and more beneficiaries - so it is working as designed.  In 2024, it brought in 55 billion to the Trust Fund.  More and more every year since it started 1984. 

I hate to be a cynic but I think history is on my side here - in Social Security and Medicare reform.  I see people wanting MORE not less of anything and legislators who seem to agree on giving the MORE but not the less because it goes against the MORE not LESS mindset.

Thing is we also do not seem to want to pay MORE to get MORE or even add any minor risk to earn MORE.  We just want the other person to pay MORE for our MORE - and in the end, we all lose.

[RickS467730]

I think there’s still a lot of confusion out there about what partial privatization really means. It’s not about forcing people to go it alone or yanking money out of the system. The money stays in the individual’s Social Security account—it’s just directed into an area that has the potential to grow faster than the traditional trust fund. I’ve said it in several threads now—this is about a modest carve-out (originally proposed at around 3%) of payroll taxes into personal accounts, similar to the Thrift Savings Plan or the Sweden model (which I’d encourage anyone unfamiliar to read up on). These accounts would give younger workers the ability to earn market-based returns while protecting those already in or near retirement.

Privatization should have been implemented back in 2006, when there was still time for compounding to work its magic for younger workers. But here we are. I still think it should be part of the long-term future of Social Security—but we also need more immediate structural fixes now to stabilize the program. That includes eliminating WEP and GPO, tightening benefit formulas for high earners, and closing loopholes that quietly drain resources from the system. 

Too often, reform ideas get dismissed out of hand without digging into the details. That’s why I appreciate thoughtful disagreement—it’s how we move conversations forward. We’ll never get meaningful reform if we treat debate like a threat instead of a tool.