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Taking aim at Social Security

By Jennie L. Phipps · Bankrate.com
Wednesday, November 7, 2012
Posted: 5 pm ET

Now that the election is decided, President Barack Obama and Congress are faced with the fiscal cliff. Social Security, which accounts for 20 percent of the U.S. budget, is the big target on the edge of that cliff.

The program's defenders are lining up to do battle.

Social Security Works, a coalition that urges increases in the program and fights cuts, has launched what it calls The Lame Duck Whip Count, which is keeping track of how members of Congress stand on cuts to Social Security, Medicare and Medicaid.

The number of members of the Republican-controlled House of Representatives who support this stance is unclear, but so far, nearly 30 mostly Democratic senators are on the Whip Count no-cuts list. At an early morning, post-election news conference calling for a quick fiscal cliff fix, Senate Majority Leader Harry Reid said, "We are not going to mess with Social Security."

Vermont Sen. Bernie Sanders, an Independent, is circulating an online petition at SignOn.org that calls for no benefit cuts to Social Security, Medicare and Medicaid. He already has nearly 100,000 electronic signatures -- and his effort has only just begun.

Social Security actuaries conclude that if we don't do something to control the cost of Social Security, by 2033, the program will only be collecting enough money to pay 75 percent of benefits owed. It may not look like it, but the political will to fix this problem is actually increasing, says Alison Borland, vice president of retirement solutions and strategies at human resources consultancy Aon Hewitt. But Borland doesn't see the fixes affecting people living in retirement or nearing it.

"There are easier things to stomach that impact people who are retiring 20, 30 or 40 years from now," she says.

She thinks that tax-saving tweaks to retirement savings plans such as IRAs and 401(k)s are more likely. Those changes could include eliminating some of the tax-deferred retirement plans, leaving only some version of a 401(k), probably a Roth 401(k) because it pushes the tax savings down the road. She also believes that it is likely that high-income earners will lose the ability to deduct much of their retirement savings.

In return, she predicts retirement planning will become more flexible with savers able to invest in a wider variety of options. "I think there is broad appreciation and recognition that retirement security is incredibly important, and you can expect the trade-off to any cuts to be a focus on getting more results from our investments," she says.

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81 Comments
Inge
November 11, 2012 at 7:25 am

How can you cut social security. We have paid our whole life. How dare that the government uses that money to pay for other services. Can't these people make a budget? We sure do.

greg
November 11, 2012 at 7:24 am

I wonder how ss would be doing if there really was a " trust fund" and it had not been raided all these years. If the money had been invested, the markets would have had a grand infusion of cash. Bad times in the investement community? At least there would be some money left with the possibility of future recovery. This is not a Republican or Democrat issue for those of us who have attained or are approaching retirement. We have paid into the system for many years and really are entitled to somethine
. This is not a "handout"

William E. Parker
November 11, 2012 at 7:10 am

I have just retired. I taught school for 25 years. When I left the teaching profession, I started a retail business with 3 friends. We are in our 16th year. We survived the 2008-2010 economic downturn. We partners have NEVER taken a distribution. Hopefully at some point I will be able to receive some distribution as I am living only on my social security benefits. Are Congressional salaries under social security rules? At one time, I know there was a special retirement fund for Congress. Their salaries were NOT part of the Social Security program! They of course did not vote to spend it!!Does anyone know if this is still true?

Frank
November 11, 2012 at 7:06 am

How about going after the welfare system before the social security, we worked hard for our money so we could retire not give it out to people who never gave a dime to the system, take care us working americans first, enough is enough, why must we support all these other people who don't even belong in the states?

bill unijohn
November 11, 2012 at 6:47 am

social security is not free or an entitlement program. one has paid into it for as long as one has worked .unemployment requires payment from wages also. i do not understand stupid people who complain about social security. take it away and you will find yourself homeless and starving.one major illness will bankrupt even the well off.this program has been the focus of hate since FDR put it into law. how many republicans collect social security ? why dont you stand with your facist party and drop it and stop collecting ?simple.you are the biggest hippocrats alive . fight gays? why do you have a organization called the log cabin republicans . want to fund social security better ? then demand as a country that all politicans give up their benefits that they get for life and put the money in ssi.

Amy
November 11, 2012 at 4:59 am

I am not retired but I am a 39 yr old widow that receives SS death benefits for my 2 daughters that are 8 and 11 .I also work too .Does anyone know if any of these cuts will go in affect in my regard ? It really scares me, although I work ,I do rely on this benefit I receive for my children as do most SS benefit receivers .I havent found ny articles saying if it's all SS that could be cut . I dont think any of it should be cut .All that have worked has contributed to Soc. Sec.

Gary
November 11, 2012 at 3:28 am

I wonder how much Money could be saved, if say perhaps, any SS benefactor earning over $75K would take a 10 to 20% cut in their SS pay? There has to be something done in order to save it for the really deserving poor. Additionally, look at welfare fraud. Examples are everywhere!
Gary

tramky
November 11, 2012 at 2:40 am

Presidents? What do Presidents have to do with it?! Congress is responsible--completely responsible. The Congress of the United States is, in fact, the greatest raider of the U.S. Treasury. The United States government is essentially broke, and the Congress is responsible for it. Incompetence, power greed, an unmitigated need to say "yes" to any yahoo with an idea to get money from other people.

Get rid of half of Federal regulations--pretty much any half will do.

Bryon
November 11, 2012 at 1:54 am

Elaine you are on target. I am not going to spend much time on this, if I do I will get very frustrated and not sure if I can maintain my composure. I herd this some time ago. There was several presidents that took trillions and trillions and trillions of dollars out of Social Security. Just think how well SS would be doing if all that money was still in SS. So what I know the presidents have stole from us. So they take all this money from us then turn around tell us that SS is running out of money. Then they figure if they cut our benefits they will be able to take more. It is like they are blaming for what they did to the SS and the economy. Put the trillions of dollars you presidents stole from use back into SS and I am sure SS will do fine.

Elaine
November 11, 2012 at 12:52 am

Social Security is solvant, we have saved money and it is invested in government bonds. The problem is that the government does not want to pay back the bonds and has redefined it as an "entitlement." This program is actually insurance that is paid to young workers if they are injured, become ill or otherwise cannot work. It pays support to children if a parent dies. I don't think private retirement accounts will do this. Are we as a nation willing have these children then grow up in poverty? I find it extremely hypocritical for people like Paul Ryan who went to college on his social security benefits is now unwilling to pay them for today's children.

So what about raising the retirement age to 70. Sounds good--if you work in an office. But consider working as a plumber, a bricklayer, construction workers, prison guards, mill workers, lumberjacks, police officer or firefighter. Those who do hard physical labor are ready to retire after 40-45 years of working in such industries. Their bodies become injured and they are tired. To expect them to work another five to ten years in order to retire is unreasonable. They would be worked to death. I think before this happens a summer break work experience program for congressmen would be in order.

And Jane, I trust you are a Republican, if so, it is your party that is on this bandwagon. They really want us to invest this pot of money the banking industry doesn't have access to so they can steal it from us. Believe it or not, President Obama is on your side.