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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
NICK
November 11, 2012 at 10:18 am

oh and one more thing, when you take from social security to fund other programs. your taking from the poor, the person who worked all thier life to have this when they came of age, i may be wrong, but i think Mr. Reagan did not take his social security cause he made a good pension from being the prez and he would not need it after he left office. i think he said he would make enough money off his governers pension, hollywood pension and presidental pension, that he wanted what he would have got from s.s. to stay in the fund. has any rich dude done that yet today. someone like gates, and the list goes on. i know i worked my tail off for every dollar i earned and paid into the tax system. and i am grateful for the s.s i get, i live on a fixed income, i do not know how these people who go to work every day now with the increases in food, gas, and all we buy, how they can get by on what they make. i am hanging in there and can't say by my teeth,,,,i had to pay out of my pocket to get em pulled and then for the false ones, so if i be hanging by them i am gonna fall any dang second, lol,,,God bless you all and good luck with your endevers in life. :)

NICK
November 11, 2012 at 10:01 am

I am on disability due to a heart attack in 2006 that almost killed me, worked in a steel mill for 32 years, then for the post office as a letter carrier from 1999 to 2006 when i had this happen to me. I am 63 and have worked all my life and paid into the system like others did, I want to work, but after dieing 4 times in 3 days in 06, the doctors told me i would never work again, heck i was lucky i was alive, I really can not grasp the fact that the government wants to always take from s.s. heck take all the troops out of all the countries we have been protecting and stop paying them billions of dollars a year and put it in the s.s. system, ya do not have to be a rocket sientest to figure that one out. or propose to eliminate the s.s. those in the house and senate are and will get and tax em up the wazoo for breathing and maybe they will get something done then.

Clarice
November 11, 2012 at 9:59 am

Ok, now, please get your mouths off some of the Alcoholics and Drug Users! Some of these folks have worked as well, at some point in their lives! These conditions are considered, medically, as a descese! Either way it's being "identified", these folk need help and "income" also! Hello! Therefore, since they have paid into the Social Security system at some time, they should be given the opportunity for "benefits", whether anyone think so or not!

Robert
November 11, 2012 at 9:56 am

I have been paying taxes, social security, and medicare for 36 years. I payed disability insurance and tried to pain for the worst because in my job I am exposed to dangerous chemicals and situations on a daily basis. I was disabled by multiple doctors on 8/11/2011. Since then I have found although I was paying in the max and gettting 4 credits a year that my possiable SSDI month was dropping from where the goverment has been stealing our money that US people have paid in to finance other things. Also Oboma has given loop holes to private disabilty so they can get out of paying so you have 2 things you pay for that are lost to goverment greed and keeping the rich, rich. We can pay 15 trillion to the rich to stay rich. Most of this money we will never see again. We need to hold our goverment accountable for the money we have entrusted them with and demand repayment of misapprpeated funds. All we have to do is look at the past pay in to social security and the pay out and to where this money was paid and we see it is used for a cash til to be dipped in for any deal they chews.

Stephen Terlizzi
November 11, 2012 at 9:33 am

Quickest solution to fix Social security, Medicare, and Medicaid is remove the FICA earninge cap. I think this year it is about $120,000. That means any income over $120,000 is not taxed for FICA (Social security, medicare, medicaid deductions). That means if a family is earning $120,000, they pay the same FICA tax as a person making $250K or $14,000,000. Tax their full income.

Joe
November 11, 2012 at 9:03 am

Seems to me that if Congress would repay the SS Trust all of the $ taken over the years to pay for/fund other things (robbing Peter to pay Paul. sound familiar?)that would help. How about using un-used campaign contributions, restructuring Congress' perks/benefits (ouch), but all Congress does is take the easy way out...cut, cut, cut. tax other things, etc.
Please get moral, ethical, honest and truthful. Stop acting (or not) solely based upon a label, ie if he/she is a Republican/Democrat then I am against what ever it is they propose!

Judy
November 11, 2012 at 9:02 am

It's time the Government got their hands out of the social security "cookie jar" and only use the funds for the initial purpose, 'to aid the retired Americans' who worked hard and contributed to the fund for years. The money should not be used for drug addicts & alcoholics as stated by Diane. Government, stop stealing our money to use for anything you choose and the payout will continue to be there for years to come!!!!!

Ed A
November 11, 2012 at 8:49 am

Why are we going after SS when we have money to send to Syria? Also, why do these comments always go right after one party or another? Socialism is socialism no matter who is practising it. SS is broke because it was raided and misused and that won't change because politicians won't change. Both parties are guilty!And for Elaine, do you think anyting will get better if the govenrment takes more from the rich? They are like pigs at a trough! It will be spent on more programs that benefit a few, more waste.

Tired
November 11, 2012 at 7:31 am

Typical wealth redistribution comment Gary, give less to the high income earners when all their lives they have paid the highest SS tax. I've paid the max SS tax all my life and that determines my benefit level. It doesn't determine how much you will be supplimented because you earned less.

Diane
November 11, 2012 at 7:30 am

I'm with Frank. Well said.
How about Drug Addicts & Alcoholics who are collecting Social Security???? Who said addiction is a debilitating disease? They don't know what their talking about!! Somebody is getting a kick-back I bet.
I'm 74 still have to work (been working since age 16) can't live on social security.
Wake-up America we're sinking fast. There's more of us then them in the White house that are ruining this country.