Don’t fault our politicians ourselves

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In a recent column, I tried to allay the fears of so many readers who expressed serious concerns about the grim and catastrophic headlines of a few weeks ago that predicted the demise of Social Security. I told people to relax. We have taken this route several times over the 80-year history of the program. Congress will eventually put in place reforms that will maintain the program for generations to come.

I then came up with eight relatively modest reform proposals, some that would reduce future profits and others that would increase future income. The reaction to this column was interesting and predictable on two fronts.

First, I received a flurry of emails from readers accusing Congress of doing nothing to resolve Social Security tax issues.

Before continuing, let me address these issues. Many of you have written and blamed Social Security problems on tax mismanagement or Congress’ bickering with the system’s trust funds. I have addressed these persistent and false rumors several times in previous columns and I will not do so here today.

Social security issues have nothing to do with mismanagement and everything to do with the demographics of the baby boomer bubble. There are 10,000 of us retiring and subscribing to Social Security every day. The system has worked wonderfully for decades with a ratio of three workers to one retiree. But with all of these baby boomers shifting from the working, taxable part of the Social Security pipeline to the retired and receiving part, the system is heading towards a worker / retiree ratio of 2-1. It does not work AS IT IS CURRENTLY STRUCTURED at a 2-1 ratio. But with relatively simple reforms, it can work.

So now let’s go back to all the comments I’ve received accusing Congress of doing nothing to fix Social Security. I remember that line Cassius said to Brutus in Shakespeare’s play Julius Caesar. He tries to explain to Brutus that we are all responsible for our own destiny. He said: “The fault, dear Brutus, is not in our stars, but in ourselves.

I would change that line a bit and say: the fault, dear readers, is not in our politicians, but in ourselves. I believe that we, citizens and voters alike, must accept much of the blame for any inaction on the social security reform front. Here is why I think so. Let’s say I’m Congressman Tom, and I’ve introduced legislation to reform Social Security. My plan foresees a slight long-term increase in the retirement age as well as a very modest increase of a quarter of 1% in social security contributions. These two changes alone will keep the solvent system going for at least the next 75 years.

But then the time for re-election comes, and my opponent throws attack ads that basically say: Don’t vote for Congressman Tom. He has a plan to lower your Social Security checks and raise your taxes at the same time. Guess what? Congressman Tom is defeated. I have seen this happen dozens and dozens of times in past election cycles. So do you see why politicians are afraid to hit Social Security with a 10 foot pole? If we voters weren’t so naive and gullible, perhaps members of Congress would be more inclined to make significant changes to Social Security.

Speaking of these changes, it brings me back to the second wave of reactions to my recent column which offered proposals for social security reform. Let me stress that the reforms I proposed in this column were not my ideas. I was just highlighting some of the most frequently cited proposals for changes to social security.

Anyway, what I learned from the reactions I heard is this: people say they want social security reformed. But what a lot of them are really saying is, I like these reforms that lower other guys ‘social security checks or raise other guys’ taxes. But don’t mess with my social security!

Here is an example of what I mean. One of the proposals called for a very minor reduction, by a quarter of 1%, in the annual cost of living adjustment (COLA) that all social security beneficiaries receive. I pointed out that most economists agree that the Social Security COLA formula is too generous. Well, my God, you would have thought the proposal called for cutting everyone’s Social Security benefits in half. Let me repeat, the suggestion was a quarter reduction of 1%. Not a single elderly person who reacted to this idea of ​​reform liked it. In fact, it would be fair to say that they all hated it and swore they would never vote for anyone who even hinted at such a change.

Most of these people’s emails reinforced my theory that many older people also say: raise other guys’ taxes, not mine! This is because by far the most popular proposition was one that called on the rich to pay more into the system. More specifically, the proposal was to remove the cap on taxable earnings. This cap is currently $ 142,800. In other words, Bill Gates only pays Social Security taxes up to this limit. Removing the cap would mean he would pay taxes on his $ 1 billion annual income.

What I didn’t mention in this recent column is that benefits are tied to a person’s taxable income. So if Bill Gates started paying taxes on his billion dollar income, he could end up with a monthly Social Security check that runs into millions of dollars! What you would have to do to make this proposal work is to remove the cap on taxable income and simultaneously cap the amount of Social Security benefits they receive in return.

I hope people will understand why Congress is having such a hard time managing Social Security reform. On the one hand, there are simply no easy answers. There are many potential reform ideas, but none are easy. Ultimately, someone’s benefits are going to be reduced and / or someone’s taxes are going to be increased.

The second reason Congress finds it difficult to discuss Social Security reform is that they should get the American people to agree on a reform package. We just can’t get everyone to say: Cut other guys ‘profits and raise other guys’ taxes not mine! We all need to be in the same boat.

To learn more about Tom Margenau and read previous columns, visit the Creators Syndicate website at www.creators.com.

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