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25 replies

GailL1
GailL1
Community Champion ⭐⭐⭐
July 27, 2025

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?  

IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna
    R
    RickS467730
    Contributor ⭐⭐
    August 3, 2025

    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.

    T
    Tonster521
    Community Champion ⭐
    August 9, 2025

    @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?

     

    S
    sktn77a
    Contributor ⭐⭐⭐
    July 30, 2025

    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.

    LisaS961881
    LisaS961881Author
    Community Champion ⭐⭐⭐
    August 17, 2025

    ….. a gloomier article just three weeks later:

     

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

     

         ~ Lisa 🙋

    GailL1
    GailL1
    Community Champion ⭐⭐⭐
    August 17, 2025

    @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” - 

    IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna
    LisaS961881
    LisaS961881Author
    Community Champion ⭐⭐⭐
    August 17, 2025

      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….

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