What Social Security Benefits Changes Do You Want? Part One

[GailL1]

What Social Security Benefits Changes Do You Want?  These are some that have recently been proposed - YEA or NAY on these?  If you don’t understand what these are - you need not vote.

There are so many of these that I am only going to post some of them at any one time so as not to overwhelm you.  - Thus this is Part One.

I am not including any proposed offsets if they were mentioned - we can cover those later.  For the ones for which there were no suggested offsets, I did include those and the estimated cost to the Trust Fund.

1.  Should the Repeal of the Windfall Elimination Provision and the Government Pension Offset be extended to the people of our territory Puerto Rico?

This would bring the total increase in liability to the Social Security Trust Fund, including what has already been passed for the repeal of the WEP and GPO to $200+ BILLION over (10) years.

2.  Should the Social Security lump-sum death payment increase from $255 under current law to $2,900 and then indexed to the CPI following the year of initiation. This would cost the Social Security Trust Fund approximately $40 BILLION over (10) years.

3. Should we use the Consumer Price Index for the Elderly (CPI-E) rather
than the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) to calculate the annual cost-of-living adjustment (COLA), if there is an increase?  It is assumed this change would increase the COLA by an average of 0.2 percentage point per year.

4. Provide an option to eliminate the 5-month Social Security Disability Insurance (DI) waiting period with the condition that those who make this election will receive a 6.1 percent reduction in their monthly benefit amount through the period of disability benefit receipt that follows.  New or pending applicants for Social Security disabled worker benefits would have the choice of (a) having their benefit calculated as under current law and starting receipt after the current law 5-month waiting period; or (b) having a 6.1 percent benefit reduction applied to their monthly benefit amount and starting benefit entitlement without the 5-month SSDI waiting period.  This change is estimated to cost the Trust Fund approximately $42 BILLION over (10) years.

Part Two of these Benefit Option proposals will continue after I see how Part One is received and what participation it brings.

[BalbonisMoleskine]

Cap lifetime benefits at the amount paid in over the decades, plus whatever the average interest rate was for each year. It's not sustainable for people to receive 2X or 3X what they paid in payroll taxes.

[GailL1]

@BalbonisMoleskine 

Feel free to start your own list of solutions - my post is about proposals that have already been introduced into legislation.  So you are basically, off topic for this discussion.

But with that said, you are inferring that Social Security is like a retirement account - IT ISN’T, the program of Social Security is NOT a retirement account it is an insurance product that helps to prevent complete and utter poverty when certain conditions come your way - old age (retirement), disability or as a survivor.  

If it were a retirement account, many people would run out of (their own+employer) contribution amount in just a few years - what would happen then?  Since many beneficiaries live ONLY off of their Social Security benefits  when that amount is gone based on your suggestion, what would we do then with people that have absolutely no money (and probably no assets either) to live?

[BalbonisMoleskine]

With insurance, there is a contract. SS has no such contract. The SCOTUS made this clear in Flemming v. Nestor, which is available on the SSA website: "In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right."

For decades, AARP, the SSA and every financial adviser has constantly reminded people that SS is not intended to one's sole source of income in retirement. People who ignored and ignore that do so at their peril.

[GailL1]

@BalbonisMoleskine 

So what - 

Even if we agree in principal on what people SHOULD DO and if they don’t it is their own fault.

The reality is that we don’t hold people accountable for what they SHOULD HAVE DONE.  

In a way, we do have a contract or an agreement as to who gets a Social Security benefits based on time paid in and other eligibility criteria.  We know how benefits are figured within the law once eligibility has been established.  But we don’t have a maximum stay in the benefit - and that is part of the problem - we and those to whom might get some of our benefits get them for a longer period of time - we, as the direct beneficiaries, get them based on our longevity and then others whom may draw a benefit get them for a long time some times A VERY LONG TIME.

Now maybe we could give each a number as to how much in earned typed benefits each could have access to as a draw and once that happened, they would have to go on some other form of helping financial aid - but that’s just switching accounts, not solving the problem.

Please go back to the topic and of the proposals that have been proposed in this Part One topic do you agree with?  I only listed (4) there are many, many more.

[BalbonisMoleskine]

No, there is no contract -- "in a way" or otherwise. The SCOTUS made this clear in Flemming v. Nesttor, which also is the legal foundation for every proposal to means test SS benefits. For example, a retiree whose home and retirement savings total more than $1 million could have her SS benefits reduced or even eliminated, depending on what's necessary to provide SS benefits to people who didn't save.