Obama pushing to extend payroll holday through 2012 while Social Security account drains.

On Wednesday, President Obama reiterated his push to extend the existing payroll tax holiday through 2012 – a move  objected to by members of his own party who fear the reduction in revenues will undermine Social Security.

“I think that it makes perfect sense for us to take a look at, can we extend the payroll tax, for example, an additional year,” Obama said during a lengthy press conference at the White House.

On Friday, Democratic Reps. Lloyd Doggett (Texas), Ted Deutch (Fla.) and Mark Critz (Pa.) sent a letter to all House Democrats saying the proposed extension “should trouble all who care about preserving” the funding stream for Social Security.

“Social Security’s popularity comes from the direct contributions of American workers, who pay into the system now and benefit when they retire or become disabled,” the lawmakers wrote.

“Unless and until faith in Social Security has been restored to the American people through long-range solvency, short-sighted cuts to the program’s revenue stream must not be part of any debt ceiling or budget deal.”

The letter is also being distributed to select House Republicans, Deutch spokeswoman Ashley Mushnick said Wednesday. The Democrats are also readying a similar letter to send to Obama.

While the cut is just 2 percentage points – from 6.2 percent to 4.2 percent – it represents a real payroll tax reduction of 32 percent.

For instance, a worker currently earning $100,000 should have paid $6,200 in payroll taxes for 2010 wages, but will pay only $4,200 for earnings this year.

A difference of $2,000 that will not be circulated into the Social Security account.

The Congressional Budget Office estimates the cut will reduce federal revenues by $112 billion over the next two years.

Since the tax package is not offset by changes elsewhere in the budget, the government will have to borrow to fill that hole in the Social Security trust fund.

Social Security is already at a loss. It is clear that more people will be drawing on funds that are not available.

We cannot afford to draw down from Social Security even more. We must find other ways of revitalizing our economy without kicking the Baby Booming generation in the teeth.

Copyright (c) June 30, 2011. All rights reserved.


PREVIEW: In an effort of pure genius, a 2012 Budget is on the brink of proposal.

In an effort of pure genius, House Budget Committee Chairman Paul Ryan is set to put forth a 2012 Budget that reduces spending by $6.2 trillion, over 6 times the savings that President Barack Obama’s own budget proposal would generate.

Additionally, the 2012 budget being presented by the Republicans, does not cut Social Security, does not increase the retirement age and invests  in private accounts, keeps the Bush tax cuts in effect and tackles Medicare and Medicaid in an attempt to reduce wasteful and abusive spending while providing relief for our Baby Booming generation and millions of Americans who benefit from receiving the Bush inspired tax cut in the midst of a recessive period.

In the Social Security area,  the 2012 Budget will lay out problems with the program and suggest committees tackle the specifics. It will also propose “trigger thresholds for Social Security that, once reached, would ask the president to propose a way to fix the program.

The Ryan-Rivlin plan is also being pushed for approval which allows citizens who turn 65 in 2021 or later to not enroll in the current Medicare program but instead would receive a voucher to buy private health insurance.

With the concept of “Medicare Advantage for everyone,” under the Ryan-Rivlin plan, future retirees would have a range of private plans to choose from and a federal payment would go to the plan, rather than to the individual retiree. The idea is to inject competition into the system to lower costs.

The Congressional Budget Office in November said the Ryan-Rivlin plan and block granting of Medicaid would save $280 billion, but has the potential for much greater savings in future years.

The Budget Committee chairman has proposed reforms in the past and it is a concern to cut Social Security when it’s a proven fact that the Social Security Trust Fund will be unable to meet its obligations beginning in 2037.

President Obama’s debt commission last year recommended raising the retirement age to 69 by 2075 and changing how inflation is calculated in order to shore up Social Security.

The fiscal commission garnered some Democratic votes, but has drawn a massive negative response from Senate Democratic leaders over the Social Security recommendations.

This would save the federal government money because the share of costs would be converted to a fixed dollar amount that rises according to inflation, rather than automatically to match healthcare costs.

In a vision of relief, Rep. Ryan’s budget will contain no new taxes and will extend all the Bush-era tax rates. 2 items that can cause a severe dip in our already recessive markets, if left to the extremists of the Democratic Party.

The 2012 Budget is expected to be revealed on Tuesday, April 5, 2011.

Bravo Rep. Ryan! I support this budget 110%. Thank you for preparing a document that can be easily digested on the Democratic side, while producing real cuts to 2 of our biggest entitlement programs and for leaving Social Security intact for our baby boomer generation. You have my fullest respect and deepest gratitude for the 2012 Budget.

Copyright (c) March 31, 2011. All rights reserved.

Social Security Index

Good news for Seniors- $250 would not have to be repaid if healthcare appeal passes.

Republicans hold true to their promise of cutting spending.

While Social Security debate rages on, Michigan lowers payroll tax.

Published in: on February 13, 2011 at 8:08 pm  Leave a Comment  

Social Security will run deficits this year. We need a long term plan.

Senate Democrats led by Sens. Charles Schumer and Bernie Sanders are gearing up for a battle with House Republicans over Social Security benefits.

Senate Democrats have unified over the issue after President Obama stayed away from proposing a cut in Social Security benefits at Tuesday’s State of the Union address.

Democratic pollsters warned that if Obama called for raising the retirement age, it would create a schism in the party.

House Republicans have discussed advancing a proposal to privatize Medicare in the budget plan they expect to unveil in the next few weeks.

House GOP Conference Chairman Jeb Hensarling  said Wednesday that many Republicans would support a proposal floated by House Budget Committee Chairman Paul Ryan  to convert Medicare into a voucher system in which beneficiaries would receive $11,000 on average to buy certified plans.

Ryan has also called for letting workers under the age of 55 invest a third of their Social Security taxes into personal retirement accounts.

Mike Steel, a spokesman for House Speaker John Boehner,  has pointed out that Obama has also signaled support for Social Security reform.

“President Obama and Republicans agree on the need to reform Social Security to protect benefits for future generations,” he said. “It seems like some of the President’s Democratic allies on Capitol Hill haven’t gotten the memo from the White House.”

The president said Thursday the solution should not slash benefits for future generations or subject benefits “to the whims of the stock market.”

Schumer, Sanders and several other Democrats have formed the Senate Social Security Caucus, which held its first meeting Thursday.

The meeting came a day after the Congressional Budget Office reported that Social Security would begin running deficits this year. The trust fund is projected to take in $130 billion less in payroll taxes than it will pay out in benefits.

Most of that deficit is due to a one-year payroll tax break that President Obama and congressional Republicans agreed to last year, which knocked the payroll tax rate from 6.2 percent to 4.2 percent for 2011.

It is also generally acknowledged that the trust fund will no longer be able to pay out 100 percent of benefits beginning in 2039.

Influential Republican senators have proposed raising the Social Security retirement age from 67 to 69, using a formula that Congress agreed to in the 1980s.

“We know what to do on Social Security. I put a proposal on the table adjusting the age from 67 to 69,” Sen. Lindsey Graham said Wednesday. “I don’t know how in the heck we save this country from bankruptcy if we don’t reform entitlements.

Although based on reports, raising the retirement age is not going to add a large enough chunk to the social security deficit. Additionally, I have yet to hear how this would be implemented and what the age bracket cut off would be.

The other members of the Social Security Caucus are Sens. Sherrod Brown, Sheldon Whitehouse, Daniel Akaka, Barbara Boxer and Debbie Stabenow.

A fourth Republican senator, Jerry Moran, joined the caucus, which also includes Sens. Jim DeMint, Rand Paul and Mike Lee.  A fifth GOP senator, Pat Toomey, sat in on the meeting.

“The fact that five senators are for privatizing Social Security shows we’re not crying wolf here,” Schumer said. “This is a serious movement to undo the most successful government program of the 20th century.”

Brown said: “If they have five senators already in the first month of January, it’s likely going to be a major thrust of the Republican effort.”

We all know that Social Security is in serious trouble and reform must be made in order for it to keep producing enough money to take care of the Baby Boom Generation.

I truly dont think raising the retirement age a couple of years is going to produce the results needed to make a difference.

I have reservations about the social security waver idea being proposed and will have to research into that more.  What are YOUR thoughts? Is that a good way to tackle the lack of funding issue? Please comment below.

I have always been a supporter of privatizing Social Security but I realize that they still need money from the younger generation to help fund the program.

I have accepted and have come to terms with that so I was thrilled when Representative Ryan suggested that we allow 1/3 of our social security taxes to be privatized while reducing the benefits the younger generation received. That’s the best of both worlds.

Either way, I am thrilled that Congress is noting my concern about Social Security. Now if we can only stop the infighting and get to working on a real proposal before its too late.

Copyright (c) February 3, 2011. All rights reserved.

Published in: on February 3, 2011 at 1:02 pm  Leave a Comment  
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Good news for Seniors- $250 would not have to be repaid if healthcare appeal passes.

Good news for the 2.8 million Medicare seniors who received $250 checks to cover prescription drug costs under the healthcare reform law in 2010.

You will not have to repay the money to the government if the measure is repealed, House Majority Leader Eric Cantor said Tuesday.

“These checks were received under existing law now,” Cantor told reporters.

The rebates were aimed at closing the coverage gap, widely know as the “doughnut hole,” that was created by the 2004 expansion of Medicare. It refers to the thousands of dollars in out-of-pocket expenses that some recipients have to pay if their prescription drug costs exceed what Medicare covers but fall below the level at which “catastrophic” coverage kicks in.

Put another way, “Approximately 3.4 million seniors nationwide with the heaviest reliance on prescription drugs faced the prospect of paying up to $4,000 out of pocket before they qualified for further assistance from Medicare.” stated Senator Dick Durbin

While I am against the Unconstitutionality, reckless spending and burden that the healthcare law will place on our children and grandchildren, this is one aspect that I do support.

I am glad to hear that if a repeal is put into effect- which I render unlikely- the seniors would not have to pay back the rebate.

Seniors need this money to offset living expenses, especially since the cost of living adjustments (COLA) for Social Security was denied for the fiscal year 2011, leaving some Social Security recipients wondering how they are going to make ends meet.

Copyright (c) January 19, 2011. All rights reserved.

While Social Security debate rages on, Michigan lowers payroll tax.

A broad coalition of labor unions  have launched an intense lobbying campaign directed at the White House in advance of President Obama’s State of the Union address.

These groups are concerned about Obama’s taciturn response to the proposal by his fiscal commission to gradually increase the retirement age and use a different calculation for cost-of-living adjustments.

Now that Republicans control the House and Obama is facing re-election, the political dynamic is different and liberal groups fear the president may be willing to cut a deal on Social Security.

Amongst this controversy, Michigan lowered their 2011 Social Security payroll tax rate which directly reduced the monetary input of Social Security which will drop the tax rate by 2 percentage points, from 6.2 percent to 4.2 percent of earnings.  Roughly speaking, a Michigan resident making $50,000 annually, will dip into the Social Security fund and receive $1000 back in an attempt to boost the economy.

This is a perfect example why Social Security is bankrupt. States, like Michigan, feel that they can dip their hands into the pot and while it benefits them almost instanteously- the long term propserity diminishes greatly for the American people. 

Why was this deduction an option when it is common knowledge that Social Security needs every last cent (and then some) payable into the system to keep it a float?

Copyright (c) January 14, 2011. All rights reserved.