Cutting Social Security renders FICA contributions that already have been paid

[JDPriestly]

Cutting Social Security renders FICA contributions that already have been paid into ordinary taxes for the general revenue.

That completely reverses our progressive tax system and RETROACTIVELY converts it into a REGRESSIVE SYSTEM -- after the taxes have already been paid.

The money borrowed from the Social Security Trust Fund must be repaid in full plus the interest that has been accrued.

To do otherwise is taxation without representation.

When we were taxed for that money, we were not told that it would actually be used for the general revenue or to pay debts not related to Social Security.

To the extent that this bill will forgive debt owed by the government's general revenue funds to the Social Security Trust Fund (and I haven't seen the text of this bill yet), it is diametrically opposed to what our Founding Fathers fought for.

RETROACTIVE TAXATION WITHOUT REPRESENTATION is un-American.

[The Magistrate]

1. That Is What All This is About, Ma'am

The aim behind all this 'reform Social Security' swill is to convert the F.I.C.A. tax into general revenue, and never pay off the monies 'borrowed' from the Trust Fund. On a colossal, and governmental; scale, it is exactly what corporate raiders delighted to do with pension funds a couple of decades ago.

[Pholus]

4. +1

[midnight]

5. They seem to have the approval of the Dems...

[Lorien]

8. Exactly. nt

[readmoreoften]

14. +1

[UrbScotty]

2. Thankfully, there were no Social Security cuts in this deal.

[JDPriestly]

3. Oh, yes. There are. That's what the committee is going to

quietly foist upon us. Just wait.

[Leopolds Ghost]

9. Nothing quiet about it. Obama says that if Congress doesn't vote for the committee plan

With no amendments, then massive cuts will automatically accrue in THIS bill to PUNISH Congress.

And he has the gall to put sweeteners for liberals in the POISON PILL (the bill he says Congress
will not consider, to prevent Congress from avoiding the committee verdict) and call it an accomplishment
when speaking to the majority of uninformed political foot-soldiers.

It's anti-parlamentarian and hence possibly unconstitutional.

And the White House said this in their press release.

[JDPriestly]

15. Thanks. The Constitution gives each house of Congress the

right to make its own rules. So, I don't know whether this is OK with the Constitution or not.

[Big Blue Marble]

10. What is your theory as to why so many here keep saying

that Medicare and SS are protected from cuts in this deal? They seem blind to the stated intent of the
deficit commission that is to be formed this fall. Is it cognitive dissonance?

After all, I heard Obama say everything is on the table just yesterday. Of course, we know it
will be called saving SS and Medicare by reforming them and we should be grateful for their
generosity. What gives around here?

[JDPriestly]

13. Yes. The people named to the committee will be majority

anti-Social Security, anti-Medicare, and secure in their districts no matter how they vote on the issue.

If you look at the list of people who voted for this debt ceiling bill, most of the Democrats whose names I recognize are from relatively affluent districts -- Nancy Pelosi and Adam Schiff are examples of that. Their average constituent doesn't care so much about Social Security because they will be able to save enough to retire without it.

[readmoreoften]

18. My theory is that they are organized disruptors in part

and really naive and gullible needy people who are personally invested in Obama's righteousness on the other. A third group are rich, cold Democrats who really don't care or who want the cuts.

[Enthusiast]

24. Yes, and we are so happy with the President.

:applause: :loveya:

[Bluebear]

28. Who said "EVERYTHING is on the table"

[dkf]

6. That is what Daniel Patrick Moynihan said years ago.

It's also why he wanted to reverse the increase in FiCA taxes.

[Leopolds Ghost]

7. See the image in this post:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1628111

[JDPriestly]

16. Yes, the debt is mostly owed to seniors, especially the baby boomer

seniors who have paid a high FICA tax rate since the Reagan era.

What is happening is just unbelievable.

As far as I am concerned, the government has already lost its full faith and credit.

There is no way that these tax cuts will improve our economy or help us deal with our debt.

This bill, spending cuts without revenue hikes is just a loser. It has never worked to reduce a deficit, not in any country at any time in the world.

[green prol]

21. But, but... It is so much easier to steal from Granny

than from Grinch or Goldman Sacks et.al.

[SammyWinstonJack]

22. Goldman Sachs did steal from Granny et. al in the form of bank bail-outs.

And corporate tax loopholes, etc.

[green prol]

31. 16 Trillion in loans to bargain basement rates.

Had those loans gone to the people, we could paid off our student loans, our houses and our credit cards. go figure.

[dkf]

11. Actually the cuts give credit for the payments into SS.

The question is what happens after the "trust funds" run out seeing as how receipts will only cover 75% of payments.

[JDPriestly]

17. Clearly, Obama is not worried about that because he wants

additional "tax vacations" that will excuse employers from paying their fair share of FICA taxes. That will decrease the amount in the Social Security surplus. So Obama has already taken initial steps to destroy Social Security -- independently of this bill.

I will never vote for that man again under any circumstances.

[readmoreoften]

19. Excellent and frightening analysis. +1

And I won't vote for him either. It's a serious betrayal.

[PufPuf23]

30. Yeah What you said nt.

[madrchsod]

12. cuts in social security has already happened at close to 2% a year.

http://www.tradingeconomics.com/united-states/inflation-cpi

[Mimosa]

20. Madrchsod, that's a must read

Social Security has in reality been cut because of inflation. Anybody who claims there isn't inflation is a liar.

[ProgressiveEconomist]

23. 'Follow the money' and understand 'STRENGTHENING' Social Security: Link and SIMPLE analogy

JDPriestly, I agree with most everything you put in the lead-in. But you left out one crucial detail: Congress can always change the rules for Trust Fund payout to retirees and the disabled. And Congress can trim the payout rate retirees and the disabled are expecting, all the while calling it "strengthening" Social Security! Never underestimate the evil genius of Alan Greenspan, whose "Social Security 'reform'" in 1983 ensured we'd find ourselves where we are when FICA cash flow inevitably turned negative. Here's a simple analogy and a LINK to SSA cash flow projections:

-------------------------------------------------------------------------------

Imagine you and your spouse put away tens of thousands of dollars a year over DECADES for your retirement. You target $3000 a month in retirement income starting at age 65, and you actually accumulate $2 million in your IRA by the time you hit age 65.

Then you request monthly withdrawals in the amount of $3000. But the brokerage administering your IRA says, "Sorry. We're only going to give you $1500 a month. But just think how fast your account will grow!"

Outrageous? Not in the bizarro world of Social Security finance. As Chairman of Ronald Reagan's "Social Security Commission", in 1983 Alan Greenspan moved Social Security from a "pay as you go" system where FICA revenues each year just covered benefit payouts that year. Instead, Greenspan and Reagan raised FICA payroll taxes were raised dramatically, to generate a long-term "Trust Fund" something like a huge national IRA.

But instead of giving Social Security trustees publicly traded Treasury bonds they could cash at will when FICA revenues fell short of benefit payments, Greenspan saw to it that paying back the Trust Fund would require budget appropriations and/or new Treasury debt auctions.

Thirty-eight years later, the Social Security Trust Fund stands at almost $2.7 TRILLION; see the projections of revenues, outlays, and assets at http://www.ssa.gov/oact/tr/2011/lr6f8.html .

Subtract "costs" (payments to the elderly and disabled) from "income excluding interest" (FICA payroll tax revenue) to see year-by year Social Security cash flow. Thanks to Dubya's deep recession, SS cash flow already has turned negative, years ahead of schedule, and stands at $45.6 billion just for the year 2011. Projected future shorfalls grow rapidly, reaching almost $200 billion for 2022. This is the amount Congress must appropriate or Treasury must borrow to start paying back the $2.7 trillion "accumulated in the Trust Fund" since 1983, (and squandered, mainly for income tax cuts for the very wealthy, by Reagan, Daddy Bush, and Moron Bush).

Do you see clearly now why "strengthening Social Security" by raising retirement ages, increasing penalties for early retirement, or un-capping FICA payroll taxes is "on the table" for deficit negotiations? "Just think how fast the Trust Fund will grow!"

See my earlier GD thread at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1473492 .

[JHB]

25. There's a shorter word for that...

"Theft"

I recommend using it to cut through the piles of crap and fogbanks of steam rising off that crap.

Any change to Social Security that cuts benefits is theft, whether it's done directly, or indirectly by monkeying with the reirement age or COLA increase. It's still theft.

SS is paid for. The rates were raised in the 80s to ensure there would be enough for the Baby Boom. Anyone who tells you now that it was "spent" is trying to steal it.

[FloriTexan]

26. If I don't get my money back...

or my Social Security payments when they are due me....I will be suing or joining a class action suit for same plus interest.

[amborin]

27. K&R and it will severely harm the job sitch and the jobless:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1635881

[kentuck]

29. Social Security has already been cut...

Not only with the cut in FICA taxes paid, for the last few months but also, by refusal to pay any COLA raises for the last 2 or 3 years.