SOCIAL SECURITY - Tricks and Tips (IMPORTANT)

"Tricks and tips for getting the most from Social Security" PBS NewsHour 2/26/2015

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SUMMARY:  The longer you wait before cashing in on Social Security benefits, the greater the financial reward.  But many don’t wait until age 70.  There’s a range of loopholes and “secrets” that can improve your benefits, a fact economics correspondent Paul Solman discovered during a tennis game with friend and Social Security expert Larry Kotlikoff.  Their new book, “Get What’s Yours,” shares that knowledge.

JUDY WOODRUFF (NewsHour):  Most Americans depend on Social Security in retirement, and yet navigating the system is often complex and confusing.

Our economics correspondent, Paul Solman, has co-authored a new book on the ins and outs of the benefit system.  And, tonight, he shares some of what he’s learned.

It’s part of our ongoing reporting Making Sense, which airs every Thursday on the “NewsHour.”

PAUL SOLMAN (NewsHour):  It’s often said that aging America faces a retirement crisis, and, according to the AARP, the main source of income for nearly half of Americans in older age is Social Security, a simple system established during the Great Depression to provide a safety net for the indigent in their old age.

Today, it’s become a mountain of rules, more than 2,000 of them, successfully climbed only by those who get good guidance from Social Security or from someone like economist Larry Kotlikoff.  A few years ago at this tennis court on a somewhat more hospitable day, he asked me a question.

LARRY KOTLIKOFF, Boston University:  What are you doing about Social Security?

PAUL SOLMAN:  And I said:

We have it all figured out, as I absolutely thought we did.  We’re going to wait until 70, and then we get the maximum benefit.

POLITICS - Call For Talking About Entitlement Reform

"Pelosi:  For Budget Deal, 'Let's Talk' About Ensuring Strength of Entitlements" PBS Newshour 3/7/2013

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SUMMARY:  Congressional correspondent Kwame Holman reports on President Obama's new round of negotiations with Republicans on a long term deficit deal.  Judy Woodruff talks with House Democratic leader Nancy Pelosi about the prospects of a bipartisan budget deal, the sequester cuts and the confirmation of CIA director John Brennan.

ECONOMY - 'Fiscal Fix' and Medicare, Social Security

"An Argument Against Seeking Fiscal Fix in Cuts to Medicare and Social Security" PBS Newshour 12/6/2012

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JUDY WOODRUFF (Newshour): Now to our continuing series of conversations about what's at stake in the battle over taxes, government spending and debt.

Last night, we heard from Republican Sen. Bob Corker. Tonight, we get a different perspective on the question of so-called entitlements.

Many lawmakers and economists have argued that it's essential to make big changes in Medicare and Social Security. Among those ideas are raising the eligibility age, means-testing for wealthy recipients, cuts in spending and benefits, and a bigger role for private competition in health care.

Max Richtman has been arguing against making many of these changes as part of this fight. He's the president of an advocacy group, the National Committee to Preserve Social Security and Medicare.

And he joins us now.

Watch An Argument Against Cuts to Medicare and Social Security on PBS. See more from PBS NewsHour.

ECONOMY - Social Security 2033

"Social Security Slated to Run Dry in 2033, Trustees Warn" PBS Newshour 4/23/2012

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RAY SUAREZ (Newshour): Next, the long-term health of Social Security worsens.

That's according to the latest projections today from its trustees. The program's trust fund will become insolvent in 2033, three years earlier than previously estimated. The Social Security fund for disability is in even tougher shape. It's expected to move into the red in 2016, but trustees favor transferring money to shore it up.

Treasury Secretary Tim Geithner spoke of the impact to come at a briefing today.

SECRETARY OF TREASURY TIMOTHY GEITHNER: The reports project that when considered on a combined basis, Social Security's retirement and disability programs have dedicated funds sufficient to cover benefits for the next 20 years.

But, in 2033, incoming revenues and trust fund resources will be insufficient to maintain the payment of full benefits. After that time, dedicated funds will be sufficient to cover about three-quarters of full benefits.

RAY SUAREZ: Currently, the average Social Security benefit for a retiree is $1,232 a month. Medicare's finances are no worse than they were a year ago, but it faces a bleaker situation overall. Its hospital insurance fund will become insolvent in 2024, and that's assuming Congress and the president allow scheduled cuts in payments to take place in future years, something that has not been the case historically.

Tonight, we focus on the state of Social Security.

Nancy Altman is the co-director of the group Social Security Works. She's also the author of the book "The Battle for Social Security." And David John is a research fellow specializing in retirement security with the Heritage Foundation. He worked previously on Capitol Hill on proposals to change the program.

COMMENT: Quite awhile back I posted an article about the Social Security fund being a stack of IOUs. That's because congress raides the Social Security fund as a means to fund government.

So, beware of what ANYONE says about the fund. Paying back all those IOUs will raise the deficit. How do you think that will go over in today's political climate?

HISTORICAL REMINDER: When Social Security was implemented the demographics (more workers that retirees) supported the design of today's workers paying for the people drawing Social Security.

As one of the interviewees in the video commented, today's demographics are changing; more retirees will be drawing from Social Security than workers paying into Social Security, in the future.

I basic fault of Social Security is its design (workers paying current retirees). BUT the historical fact that at the time when American distrusted banks (Crash of '29 and Great Depression) the government WAS the acceptable option.

As for today? Would you trust the Social Security safety-net if it was based on the greatest gambling casino called Wall Street?

To put it another way, could you afford the risk of loosing everything if your bet is wrong?

SOCAL SECURITY - Boost in 2012

"Social Security Recipients to Get 3.6% Boost, but How Much Will it Help?" PBS Newshour 10/19/2011

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MARGARET WARNER (Newshour): Seniors and the disabled haven't seen an increase in their Social Security checks for nearly three years.

But, today, the government said 55 million recipients will get a 3.6 percent bump in benefits next January. The cost-of-living adjustment is tied to the rate of inflation. It means the average annual benefit of $14,200 will go up $43 a month, or $516 a year. The changes affect one in five Americans.

For more, we turn to Robert Reischauer, president of the Urban Institute. He serves as one of the public trustees of the Social Security and Medicare Trust Fund.

AMERICA - Social Security and the Future

"How Severe Are Problems With Social Security?" PBS Newshour 9/28/2011

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RAY SUAREZ (Newshour): President Obama has said he's open to finding ways to fix the program's problems.

But he said in the White House Rose Garden last week that any changes to Social Security should be separate and distinct from the current deficit reduction efforts.

PRESIDENT BARACK OBAMA: I have said before, Social Security is not the primary cause of our deficits, but it does face long-term challenges as our country grows older, and both parties are going to need to work together on a separate track to strengthen Social Security for our children and our grandchildren.

One of the interviewees said, "I want to acknowledge this is a political debate. It's going to require compromise." Problem, today's Republican Party (aka Tea Party) will NOT compromise, that's a dirty word in their rightard-dictionary.

They will sacrifice anything and anyone (elderly, sick, poor, middle class, etc) to their edict that nothing is worth paying for, except giveaways to the rich. (aka money is more important than people)

AMERICA - Economic Inequality, Part-4

"Do Social Safety Net Programs Shrink Gap in U.S. Economic Inequality?" (Series Part-4) PBS Newshour 9/21/2011

(Series Part-1, Part-2, Part-3, Part-5, Part-6)

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JEFFREY BROWN (Newshour): And we return now to our continuing series on inequality.

NewsHour economics correspondent Paul Solman has been examining that subject, including studies showing an alarming rise in the so-called wealth gap. But tonight's interview takes issue with that view.

It's part of Paul's reporting on Making Sense of financial news.

ROBERT LERMAN, Professor of Economics, American University: It would be nice if there was more equality, but let's not overdo it.

PAUL SOLMAN (Newshour): Bob Lerman is professor of economics at American University, a fellow at the Urban Institute, and an old college friend a year ahead of me at Brandeis University in the '60s.

My original article on subject mentioned in video is Series Part-1

AMERICA - Budget Cutting, Which Big-4 to Cut and How

"An Insurance Company With An Army" by Paul Krugman, New York Times 4/27/2011

A general reminder whenever budget issues are discussed: the U.S. government is — this isn’t original — best thought of as a giant insurance company with an army. When you talk about federal spending, you’re overwhelmingly talking about Social Security, Medicare, Medicaid, and defense. And the bulk of the insurance — all of Social Security and Medicare, about 2/3 of Medicaid — is for the elderly and disabled.

This is important both for assessing projections about future spending — yes, spending is projected to rise, but how could it not given the aging of the population? — and for assessing claims about the need to shrink the government.

Put it this way: Whenever someone talks about making government smaller, he should be asked which of these big four he proposes cutting, and how. If he responds with generalities, he’s faking it.

Amen brother.

Of course; Republican moral-code when it comes to the poor, elderly, and disabled, dictates that money is much more important than protecting these citizens. Throw them out on the streets, after all, "Are there no Poor Houses?"

The rich Republican donators do not have to worry about the issues address by the big-4 of course.

ECONOMY - Social Security and the Deficit

Source: CBO "Combined OASDI Trust Funds; January 2011 Baseline" (PDF) 26 Jan 2011.
Note: See "Primary Surplus" line (which is negative, indicating a deficit)
"Democrats Deny Social Security’s Red Ink" by Brooks Jackson, FactCheck.org 2/25/2011

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Some claim it doesn't contribute to the federal deficit, but it does.

Summary

Some senior Democrats are claiming that Social Security does not contribute "one penny" to the federal deficit. That’s not true. The fact is, the federal government had to borrow $37 billion last year to finance Social Security, and will need to borrow more this year. The red ink is projected to total well over half a trillion dollars in the coming decade.

President Barack Obama was closer to the mark than some of his Democratic allies when he said that Social Security is "not the huge contributor to the deficit that [Medicare and Medicaid] are." That’s correct: Medicare and Medicaid consume more borrowed funds than Social Security, and their costs are growing more rapidly. But Obama’s own budget director, Jacob Lew, was misleading when he wrote recently that "Social Security benefits are entirely self-financing." That’s not true, except in a very narrow, legalistic sense, and doesn’t change the fact that Social Security is now a small but growing drain on the government’s finances.

Payroll taxes exceeded benefit payments regularly until 2010. But the fact is that Social Security has now passed a tipping point, beyond which the Congressional Budget Office projects that it will permanently pay out more in benefits than it gathers from Social Security taxes. The imbalance is made even larger this year by a one-year "payroll tax holiday" that was enacted as part of last year’s compromise on extending the Bush tax cuts. The lost Social Security tax revenues are being made up with billions from general revenues that must all be borrowed. The combined effect is to add $130 billion to the deficit in the current fiscal year.

It’s important to note that benefit payments are not in immediate danger. Under current law, scheduled benefits can be paid until about 2037, according to the most recent projections. But keeping those benefits flowing is already requiring the use of funds borrowed from the public. So we judge the claim that Social Security is not currently contributing to the deficit to be false.

Analysis

As always, we take no position on whether Social Security should be changed, either to reduce the deficit or to shore up its troubled finances for future generations. Our job here is simply to establish facts and hold politicians accountable for any misinformation.

We’ll start with the basic numbers. The nonpartisan Congressional Budget Office issued its most recent projections for Social Security’s income and outgo Jan. 26, along with its twice-yearly "Budget and Economic Outlook." What those numbers show is that Social Security ran a $37 billion deficit last year, is projected to run a $45 billion deficit this year, and more red ink every year thereafter.

Matters are even worse than this chart shows. In December, Congress passed a Social Security tax reduction. Workers are temporarily paying 2 percentage points less, from 6.2 percent to 4.2 percent, in Social Security payroll taxes this calendar year. Since the government is making up the shortfall out of general revenues, CBO’s deficit projections for the trust funds do not include that. But CBO’s figures predict that the "payroll tax holiday" will cost the government’s general fund $85 billion in this fiscal year and $29 billion in fiscal year 2012 (which starts Oct.1, 2011.) Since every dollar of that will have to be borrowed, the combined effect of the " tax holiday" and the annual deficits will amount to a $130 billion addition to the federal deficit in the current fiscal year, and $59 billion in fiscal 2012.

Social Security has passed a tipping point. For years it generated more revenue than it consumed, holding down the overall federal deficit and allowing Congress to spend more freely for other things. But those days are gone. Rather than lessening the federal deficit, Social Security has at last — as long predicted — become a drag on the government’s overall finances.

As recently as October, CBO was projecting that it would be 2016 before outlays regularly exceed revenues. But Social Security’s fiscal troubles are more severe than was thought, and the latest projections show the permanent deficits started several years ahead of earlier predictions.

Don’t be confused by the fact that the trust funds are projected to continue growing for several more years. That’s because Treasury must still credit interest payments to the funds on the borrowings from earlier years. But unless taxes are increased or other spending is cut severely, the government will have to borrow from the public to pay the interest that it owes to the trust funds.

And don’t be misled by those who say the system can pay full benefits until about 2037 without making any changes to the law. That’s true, but does not change the fact that Social Security taxes no longer cover those benefits. The government is now borrowing money to pay them, and will do so every year for the foreseeable future. And keep in mind, if nothing is done, when those trust funds are exhausted, benefits would have to be cut by 22 percent in 2037, and more each year after that, according to the most recent report of the system’s trustees. By 2084, the system will generate only enough revenue to pay for 75 percent of promised benefit levels.

In fairness I am 67, and retired, receiving Social Security and Medicare, therefore I am not impartial in this area.

ON THE LITE SIDE - Social Security

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POLITICS - Quack, Quack - GOP Lame-Duck Tries to Walk Again

It is well known that the GOP has never liked Social Security. That is why they've tried to scuttle this successful program ever since its inception. Well, they're at it again.

"Back From The Dead: Privatization" by Roger Hickey and Jeff Cruz, TomPaine

It is hard to believe, but the idea of privatizing Social Security, which most observers thought had been killed and buried, could return, Dracula-like, from the dead after the 2006 elections.

You won’t hear many candidates for Congress talking about their support for diverting Social Security taxes to fund private accounts—certainly not before the election if they can help it. But most Republicans quietly remain true believers. President Bush, his leading cabinet figures and key Republican leaders in both the House and Senate have been very clear about their plans to again push privatization—despite what the public backlash against Bush’s “big idea” did to them in 2005.

George W. Bush went from triumphantly re-elected president to lame duck status in perhaps the shortest time of any modern American president. It was not because of Iraq, which is currently dragging him down, but Social Security. Bush boldly declared in December 2004, even before his inauguration, that he would make the privatization of Social Security the “number one domestic priority” of his second term. He vowed to use all his “political capital” to pass this long-time plan of the right-wing movement to cut retirement benefits and channel a portion of Social Security taxes to individual retirement accounts invested in Wall Street.

Now, perhaps because of his lame-duck status, which gives him the freedom to do unpopular things, the president is vowing to try again. In a June 27 speech at the Manhattan Institute think tank, Bush promised to reintroduce privatization, saying, “If we can't get it done this year, I'm going to try next year. And if we can't get it done next year, I'm going to try the year after that because it is the right thing to do.”

He has backed up his words with actions, such as sending to Congress a budget request for $721 billion over the next 10 years to begin private accounts (unintentionally demonstrating the tremendous costs, estimated at $2 trillion in total, to our government to privatize the system).

The House leadership has similarly promised to bring Social Security privatization up in 2007. In July House Republican Majority leader John Boehner, R-Ohio, pledged to resume the push, saying “If I'm around in a leadership role come January, we’re going to get serious about this.” In June, the current chairman of the Ways and Means Social Security Subcommittee and likely future chair of the full House Ways and Means Committee, Rep. Jim McCrery, R-La, told reporters that he intended to put Social Security back on the legislative agenda in 2007.

All this is because the GOP sees Social Security as a socialized giveaway program. They believe that Americans should be self-reliant (aka "You're on your own") when it comes to retirement.

They forget, or do not believe, why the Social Security program came into being. So here's my history lesson:

• Before Social Security, Americans were "self-reliant" for their retirement mostly through savings in banks. Then came the crash and their savings were gone, no money for retirement. Even the rich lost big-time. It was realized the government policy had a very big effect on the welfare of our citizens, and that government had a responsibility to ensure that citizens were not left destitute when policy failed to protect them.

Social Security is a safety-net. Privatizing Social Security puts American's retirement savings at risk again. Wall Street is not to be relied on, just look at the market at any given moment. For those who have relatively new 401k or IRA retirement plans, is your total investment in-the-black? My experience, and those of acquaintances, these plans are in-the-red for years. The GOP is just plain wrong on this issue, but the blind will not see.