And before I answer that question, just let me say, this is probably the first time since Joe Biden took office that he’s given out a solution to what our country is facing that I could actually live with. Not that it would ever come to fruition. Not that it’s actually feasible. But Biden has a four-point plan to fix Social Security. And truthfully, except for the fact that it doesn’t “fix” Social Security, it’s not all that bad.
Let’s examine it, shall we?
The first thing Biden wants to do is to increase taxes (NO! REALLY???) on people making $400,000 or more (and actually, it’s COUPLES making $400,000 or more). That much is necessary because Social Security is dying. As to WHY it’s dying, there are really only two reasons. First is the people that are getting Social Security have been expanded to more than just retirees. Second, the federal government has been raiding the Social Security accounts ever since the money started flowing into them. Why? Because they could…and because the account was just one big slush fund of money. Had individual accounts been used where YOUR money was in YOUR account, they never would have touched it. But Biden is right that somebody needs to increase the financial contribution into the Social Security account.
Second thing Biden wants to do is change the cost of living index that’s used. Currently, the government uses a thing called a CPI-W, which is the index for urban workers and clerical workers. There is nothing necessarily either urban or clerical about the retirees. What Biden wants to do (and should have done back in 1975 when they made the change to CPI-W) is change it to CPI-E for elderly cost of living. Those in retirement have a much different cost basis in their lives than someone working. Healthcare costs are usually the number one expense, but that’s not reflected in the current CPI-W model. So, when healthcare costs go up 35%, and inflation overall is 4%, retirees get a 4% raise and see a 35% increase in the amount taken out of the Social Security checks to pay for Medicare. This move would fix that. It would also increase the cost of the Social Security program.
Third thing Biden wants to do is increase the “Primary Insurance Amount” based on age. Starting at age 78 and going to 82, the PIA amount would increase by 1% a year over the five years. Since 80% of the amount you spend on healthcare occurs in the last 20% of your life, it becomes the biggest struggle for retirees. Again, this increases the cost of the Social Security program, and doesn’t necessarily keep it running longer.
And finally, Biden wants to boost the special minimum benefit. If you were a lower paid worker, and never made much for the 30 years or more that you were on the job, you can never make more than $1,033.50 a month (plus cost of living increases). Biden wants to up that because that’s only a little more than $12,000 a year, and the poverty level is $14,580 for a single person. So, he wants to increase the minimum amount you can make through Social Security to 125% of the poverty level. Again, this helps seniors, but doesn’t do a damn thing in keep Social Security solvent.
In fact, the Urban Institute, a Washington-based think tank has said that Biden’s plan would only extend the life of Social Security an additional five years. Then it’s broke. So it’s not a real solution. There needs to be some other things added to his four-point plan.
First of all, Social Security should be a needs-based program. If you’re net worth is say $1,500,000 or more, you shouldn’t be getting a check for Social Security. You have enough to live on. Yes, you paid into it, but should you really take from someone that needs it and doesn’t have other money? That was after all, the original intent of Social Security. It was to make sure that the widows of those men that were working would be taken care of after the men died off.
Second, it needs to go back to what it was originally intended to be. We need to stop all of the disability payments, and the payments to the kids who’s parent passed away while they were still a minor. While that money is great for the kid, it shortens the life of the program immeasurably.
And, Congress needs to come clean. Democrats have argued for years that they don’t want to see Social Security “privatized”, meaning they don’t want to see it invested in the stock markets. Why? You’ve heard all of the noise about people like Nancy Pelosi making millions in the stock market, right? Why would you deny seniors that ability? And what’s really stupid in that line of thinking is that everyone in the workplace that currently has a 401k is already IN the stock market. That’s where the money, or most of it, is invested. To not allow that to happen is ridiculous!
While I’m on Congress’ case, they need to set up individual accounts for people that are just getting into Social Security. That way, the money will be there for them. And a law needs to be passed that Congress can’t touch that money for any reason, ever! That money belongs to the eventual retiree. If they were to pass away before reaching retirement age, the money is added to their beneficiary’s account. It’s not there for Congress to raid. That has to stop now.
And, there has to be a plan for Congress to pay back the money they’ve stolen from the retirees. I’m sure it’s in the trillions of dollars by now, but it’s something they need to do. They cry about how America pays it’s debts, but yet, they don’t have a problem stealing from the most vulnerable people in their own country. How shameful! Those people should be locked away!
Social Security was a Democrat idea back in the 1940’s (thanks, FDR!), and as such, it has ballooned, like every single Democrat program into a unwieldy monster that has a life of it’s own and still grows each and every day. Fixing it? There is no way to really fix it that is going to cost less than $22 trillion in a lot of estimates. And we have Democrats to thank for that.
Carry on world…you’re dismissed!
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