Why Republicans want to cut Social Security Benefits.

 

Here we are  a week later.  Its October, 2012 and the run for President of the United States is rounding the 4th corner.  When they complete the 4th turn the sound of the engines will become loud and deafening as their feet press the accelerator pedal to its limit.  Their race to be first cross the finish line will pay no attention to the rules, facts or actual intentions.

Today Romney and Obama will have their first debate.  As voters, our question is  will the debaters be asked detailed questions and will they respond with detailed answers.  We know the answer to that. They will not.  They protect themselves by wearing question proof vests.  The debate will be another television circus.  As P T Barnum would say, “There’s a sucker born every minute”.

The media will decide who the debate winner was and talk about it until the next debate.  Each television network will ask their “contributors”, (their word for employee), who won the debate and why.  We will be expected to listen and hold credence to every word.  It’s not only unbelievable but boring.  I guess it’s the best they can do.

You can decide who to vote for based on who you determine answered the questions best or you can decide based on the facts.  The unfortunate thing is that this debate has nothing to do with Congress. They don’t need question proof vests.  The president  is the bait.  Congress is the hunter.

It’s Congress , who in large, holds most of the responsibility for the condition  this country is in. Based on my research I cannot blame any single decade or political party of Congress that would hold more responsibility than the other. They are all responsible.  In my next post I’ll provide the individual voting record of every one who holds a seat in Congress.

When researching the voting records of the Senate you just Google “Senate voting roll call” and there it is. Very transparent. Then try to find the vote tally on congress.  I spent hours getting this information.  Why do you think that this information is difficult to find?  Unless you already have the link title you wont find it in the first 5-7 Google pages.   You can find the total votes, I mean Democrats xxxxx  Republicans xxxxx but no names.

One of the topics that should come up in these debates is Social Security. The fund is supposedly running out of money on its own and now its combined with the Affordable Health Care bill.

The Republicans say that the only way to save SS is to make cuts in the benefits.  It’s true that this broad statement can very well be taken out of context but it wasn’t us who uttered the statement.   Sometimes I wonder if these politicians know that making broad general statements with no details or backup facts can be a double edged sword.   So I have researched  and my understanding of the plight of SS is as follows.

Think of the SS trust as two accounts. One is money coming  in and being paid out (cash flow) , and the other is excess  funds that have been invested over the years and are separate.  This (Trust fund savings account) amount equals  $2.5 Trillion as of the end of 2009.

CRS Report for Congress   http://www.ssa.gov/oact/progdata/fundFAQ.html

Although Social Security is often referred to as a pay-as-you-go system (meaning that current

revenues are used to pay current costs), changes made to the Social Security program in 1983

began a sustained period of annual cash flow surpluses through 2009.14 The 2010 Annual Report

of the Social Security Board of Trustees, however, projects that the Social Security program will

run cash flow deficits (program costs will exceed tax revenues) in 2010 and 2011, followed by a

return to cash flow surpluses in 2012 to 2014. Beginning in 2015, cash flow deficits are projected

to reemerge and continue throughout the remainder of the 75-year projection period (under the

intermediate assumptions).15

In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled “Low Cost”) the trust funds remain solvent for the next 75 years. Under the other two sets (the “Intermediate” and “High Cost”), the trust funds become depleted within the next 25 years. The intermediate assumptions reflect the Trustees’ best estimate of future experience.

Some benefits could be paid even if the trust funds are depleted. For example, under the intermediate assumptions, annual income to the trust funds is projected to equal about three-quarters of program cost once the trust funds become depleted. If no legislation has been enacted to restore long-term solvency by that time, about three-quarters of scheduled benefits could be paid in each year.

The Trustees believe that extensive public discussion and analysis of the long-range financing problems of the Social Security program are essential in developing broad support for changes to restore the long-range balance of the program.

What all this means to me is this.  The cash flow is going to go into the negative in a few years. To make up the difference the Advisory Board is going to begin transferring  funds from the investment account into the cash flow account to make up for the shortage.  The Advisory Board is mandated to project the condition of the Social Security fund 75 years.   Their estimate is that there is only enough money (based on current conditions) to last 25 years.

So what s the solution?   The board has suggested three possibilities.

Reduce the benefit amount. (the amount paid to retirees)

Add to the amount that is being contributed by working people or the under taxed rich.

Or Congress can appropriate funds from the General Budget to “shore up” the fund.

We all know that Romney and Ryan have proposed cutting Social Security Benefits.  Romney has defended himself by saying that benefits for current “victims” would not change and he is correct. He knows that the Social Security Fund will not have depleted the investment trust for about 25 years.  We retirees  will  probably be deceased by then.

My sense is that the Republicans have only one choice, based on the recommendations of the SS advisory Board.  The rich in this country do not care about Social Security benefits. They don’t need it. They do not want to pay into it. They would like to get rid of it but that would be very difficult.

If cuts are not made to  the benefits to retirees by lowering the amount being paid out  to them  or raising the retirement age the only option left is for the rich to pay more into the fund or taking money from the general fund and giving it to Social Security or a combination of the two.

Its clear to me now why the Republicans have been so tenacious in their efforts to repeal the affordable health care bill..  The Health Care Bill is of course an addition to the Social Security benefit package.   How can they cut Social Security Benefits without cutting health care benefits?

I sincerely hope that the candidates are asked questions that relate to this in one of the upcoming debates. I doubt it.

Read the information in the following links and make your own assessment.

Senate votes for many years: good site

http://www.senate.gov/pagelayout/legislative/a_three_sections_with_teasers/votes.htm

Codefore Books

 

 

 

 

 

 

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