Social Security crisis? Not if wealthy pay their way

Social Security crisis? Not if wealthy pay their way

By Kevin Drum

IRVINE, CALIF. – Is Social Security headed for a crisis sooner than thought? Although President Bush says so, not everyone agrees. The system's trustees estimate the Social Security trust fund is in good shape for another four decades. The nonpartisan Congressional Budget Office figures five decades. Many independent economists think Social Security is healthy for more like six or seven decades.
But there's a vocal contingent that thinks Social Security has much more urgent problems. For years, Social Security has been amassing surpluses that the system's trustees use to accumulate Treasury bonds in its trust fund.

But as the baby boomers begin to retire, they're going to have to start selling those bonds back to the federal government in order to raise money to pay benefits. This could happen as soon as 2018, little more than a decade away.

To some people, this looks like a shell game, one branch of the government merely redeeming IOUs from another branch. Sen. Wayne Allard (R) of Colorado, for example, told constituents recently, "The money is spent. I don't believe, in my own opinion, we'll be able to raise the funds to pay it back."

This statement betrays a fundamental misunderstanding of how Social Security works. Unlike ordinary government functions, Social Security is funded by its own tax, the payroll tax. In 1983, at a time when Social Security was genuinely facing a crisis - it was mere months away from failing at the time - a commission appointed by President Reagan and headed by Alan Greenspan proposed a series of fixes. Among other things, the Greenspan commission recommended increasing payroll taxes.

http://www.csmonitor.com/2005/0127/p09s01-coop.html

continue to pay payroll tax? If it is, I find it ridiculous to think that someone who makes that much should suddenly be EXEMPT from paying -- this is a logical, fair solution to the problem. Anyone who opposes this is blatantly kissing rich ass ...

2018 as the date that SocSec is in crisis...that's the year the wealthy have to start paying more in income tax to support it.

makes sense now, doesn't it?

dp

is trying to up the limit to $120,000 from what I hear. Dissent in the ranks ?

Bush could care less about lower and middle class retirement - it's all a smoke screen for what they really want to protect - raising taxes on the wealthies.