Viewpoint: Read the reports: Social Security is not going broke
By Rosemary Shay, mlive.com -- Dec 27, 2010
[...] I am not sure that everyone remembers what happened in 1983. The FICA tax was nearly doubled from what it had been just five years earlier. We were told that workers now would have to sacrifice and save for their own Social Security benefits, pay for their parent’s benefits as well as their grandparents’ if they were still living. We were told this sacrifice would ensure Social Security benefits for our retirement.
[...]
Problem solved, right?
Not so fast. That's a mighty fine looking Cookie-Jar ...
My, my, my -- that Jar sure has a LOT of Cookies in it.
Payroll Taxes
Basic Information for Employers
From Diana Van Blaricom, about.com
FICA Taxes
FICA stands for the Federal Insurance Contributions Act. The FICA tax consists of both Social Security and Medicare taxes. Social Security and Medicare taxes are paid both by the employees and the employer. Both parties pay half of these taxes. Employees pay half, and employers pay the other half. Together both halves of the FICA taxes add up to 15.3%.
The 15.3% FICA tax is broken down as follows:
-- Social Security (Employee pays 6.2%)
-- Social Security (Employer pays 6.2%) and
-- Medicare (Employee pays 1.45%)
-- Medicare (Employer pays 1.45%)
The People won't mind if we "borrow" a few Cookies from that Jar, will they Boo-boo?
Social Security Online
Office of the Chief Actuary
Trust Fund Data -- Trust Fund FAQs
What are the Social Security Trust Funds?
The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds. These funds are accounts managed by the Department of the Treasury. They serve two purposes:
(1) they provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and
(2) they hold the accumulated assets. These accumulated assets provide automatic spending authority to pay benefits.
The Social Security Act limits trust fund expenditures to benefits and administrative costs. [...]
How are the trust funds invested?
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.
In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. [...]
What happens to the taxes that go into the trust funds?
Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.
If all the income is invested, how do benefits get paid each month?
Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. [...]
Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U.S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
The General Yogi Fund MUST pay-back those Special FICA Cookies, they borrowed
-- whenever the Picnic People ask for it. That's the Law. Ask the Ranger, Yogi.
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There are laws and policies and political promises GUARANTEEING the payment of Benefits to Beneficiaries.
We have been FICA-Taxed explicitly for these programs (Social Security and Medicare) our entire lives. And since Reagan -- "double taxed" with the stated purpose of paying sacrificing for:
"current Seniors, our Parent's and our own Retirements". Isn't "sharing" nice?
The Government (ie. the General Fund) currently has the Legal Obligation to make sure that Benefits payouts are met.
Similar to how ordinary people have the Legal Obligation to make sure our personnel Credit Card Debts are met.
Just because Congress used the Credit Card to pay for Wars, does not relieve them of their Legal Obligations.
Social Security funding is protected by Law.
The Trust Fund trumps the General Fund.
Remove that GUARANTEE, and all our FICA-Tax Deductions, convert instantly into some sort of Stealth Tax.
A Pocket-pick. Indentured Servitude. Surprise!
My, my, my -- that Jar sure has a LOT of Cookies in it.
The Social Security Trust Fund has a $2.6 Trillion Surplus.
Not a Dime of Social Security Benefits have contributed to the National Debt.
Social Security Benefits HAVE. ALREADY. BEEN. PAID. FOR.
... by us, through a lifetime of work, and the manitory 15.3% FICA Deductions.
We Earned them, Picnic Benefits.