This website uses cookies to ensure you have the best experience. Learn more

Are Social Security Entitlements Financially Sustainable?

930 words - 4 pages

Emily Brandon’s article, “5 Ways to Fix Social Security”, proposed changes to the current Social Security system including: increasing the Social Security tax, lifting the payroll tax caps, raising the retirement age, a means-test, and modifying the cost-of-living adjustment calculations. Senators Elizabeth Warren and Tom Harkin agreed with the removal of the payroll tax caps (Welna, 2013) and senior editor at Kiplinger’s Personal Finance, Mary Beth Franklin, concurred with Brandon’s suggestions and additionally suggested an increase to the payroll tax. While Professors Shiller and Diamond also support raising Social Security tax, both Professors disagree with making changes to computing ...view middle of the document...

Senators Warren and Harkin also agree with raising the payroll tax cap.
"If I make $50,000 a year, I pay Social Security taxes on every dime I make. If I make $500,000 a year, I only pay taxes on about the first 20 cents. After that, I don't pay any more Social Security taxes. That's regressive," Harkin says. (Welna, 2013)
According to Brandon’s findings, if the cap was eliminated over a span of 10 years, the deficit would be reduced by 71%. Using the two afore mentioned steps together, the financing problem would be resolved and applying both steps would allow for less drastic steps to be taken than if they were each used alone.
One suggestion appearing most problematic is changing the cost-of-living adjustment calculations. Brandon and Franklin agree this would work well since it would decrease/slow the annual cost-of-living adjustments thereby decreasing the deficit by 20% (Brandon, 2013) or even “could close another one-third of the program’s projected funding gap” (Franklin 2011); however, Professors Shiller and Diamond disagree. In Professor Shiller’s article, President Obama “…proposed that retirees’ Social Security benefits be indexed to something called the Chained Consumer Price Index for All Urban Consumers or C-CPI-U, rather than the current benchmark” (Shiller, 2013). This appears acceptable on the surface, but according to Professor Diamond the chained CPI would also be used to set federal income tax brackets, creating an income tax increase as people would be pushed into a higher tax bracket on top of slower yearly increases to Social Security benefits (Wang, 2013). Professor Diamond also explained the slower increases of benefits would have the largest impact on the elderly who already have limited income...

Find Another Essay On Are Social Security Entitlements Financially Sustainable?

The National Debt in the US

566 words - 2 pages federal government spends goes to entitlements. Entitlements are directed government checks to individuals. Social security is the biggest entitlement and the biggest item in our national budget. Politicians say that social security is where the money is at.         The national government predicts that by the year 2002 the national debt will be at 6.507 trillion dollars. I think that the national debt will be a continuing battle throughout our lives.

Privatization of Social Security Essay

1601 words - 6 pages end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940. Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest expenditure of the federal government. Evidence proves that today Social Security is not sustainable which is the reason that Social Security should be

Unnecessary Entitlements

689 words - 3 pages Social Contract Theory benefits individuals involves with specific U. S. Government Entitlements such as Social Security, Welfare, Medicare/Medicaid, food stamps, etc. Wendy Milling suggested that the social contract theory is a guideline the government utilizes as a scam to spread the taxpayer’s dollars in areas they feel is necessary. Milling states that the social contract is an outdated philosophical policy within the society. The people must

Social Security: Time for Change?

2232 words - 9 pages many problems. Folsom points out that the Social Security Act retarded recovery from the Great Depression by contributing to unemployment as well as being financially unsound, as workers had to reach age sixty-two to receive benefits, while the average life expectancy at the time was only 60 years (Folsom 188). Employed workers were required to contribute a specific amount of money from their paycheck each month for thirty years while the average

SSA Public Policy Paper

1712 words - 7 pages the social security act. The social security act contributed to the elimination of the great depression and the impoverished America. Before the social security act of 1935 the support of the elderly was a “state matter”, the state held the power to regulate money that was given to the people. The elderly and physically disabled had to rely on their sates to implement programs to help them financially and most states during the great depression

Social Security Reform

2268 words - 9 pages restricted the focus of recent budget analysis and debate. Of these "certainties" are the mounting challenges posed from the baby-boomer generation. This generation, born in the years after World War II, is aging and will "begin to retire around the year 2005. By 2008, the first baby-boomers will become eligible for social security"(OMB 23). With the increased expenditures for baby-boomer group and pre-existing entitlements, a serious strain will be

The Demands Of National Security Vs. Individual Rights

716 words - 3 pages against loss, attack, or harm to the citizens.Ought to supersede means that there is a duty or obligation to take the place or position of something.Conflicting means not able to be followed or acted on, because each requires different and incompatible actions.Claims of individual rights are demands for entitlements, freedoms, or privileges a person has.Before I begin, I have an observation about the resolution. The demands of national security and

Policy Impact Paper – Social Security Disability Insurance (SSDI)

924 words - 4 pages for assist to help you through your difficult times, and not even your employer has the capability to assist you. Where do you turn? Who can or what if anything is out there for you to get assistance? Something you can do in the interim is going to your nearest Social Security Agency and file for benefits until you are able to get back on your feet and return back to work. Being more specific, you file for Social Security Disability Insurance

Social Security and Corporate Welfare

4035 words - 16 pages Social Security and Corporate Welfare 'Social Security—the nation's largest, costliest, and most successful domestic program has reached a critical juncture in its development. As its creators anticipated, nearly every wage earner now pays taxes into the system. In principle, all citizens may be eligible for "entitlements" at some point in their lives. Yet...senior citizens worry that their benefits will be cut; younger Americans are

Letter to supervisor

887 words - 4 pages individually and collectively as a group. Mr. Richards will have the opportunity to purchase ten to twenty thousand dollar shares of the company's stock annually. The price will be set at a reduce rate which will help to foster loyalty to the firm.During the first day of employment, Mr.Jones will be entitled to other benefits such as: social security entitlements, family leave, medical leave, healthcare, dental plan, retirement plans, disability, physical

Essay on Bush's proposed Social Security Reform

973 words - 4 pages In 1935, a system was devised to protect the elderly and disabled, so that whether or not they saved up for retirement, they would still be guaranteed some money to live on. Today, this system of Social Security is still around, yet it won't be for long. Many problems face the current system, and a majority of experts, whether they are democrat, or republican, agree on the fact that there are many problems, and it needs to be restructured in

Similar Essays

Social Security Benefits And How They Are Being Reduced

956 words - 4 pages attempting to provide a fair and transparent process for receiving benefits. Due to the number of cases the social security administration gets many are turned away. So many applicants turn to lawyers to go over their cases and reopen it. Client advocacy attorneys are very expensive but they get the job done. More applicants get Social Security benefits when they use a client advocacy lawyer then without one. Incident Vince Rogov is a

Recent Famines Across Africa Have Prompted The Questions Of Why Africa, And Why Again? Focus On These Questions By Analysing The Situation Of Food Insecurity And Underlying Causes

5951 words - 24 pages Eritrea (Duffield 1990).This criticism of Sen highlights the alternative 'sustainable livelihood' perspective through which de Waal is analysing household food security. This perspective views the 'livelihoods' of the rural poor to "comprise of capabilities, assets (material and social), and activities required for a means of living" (Scoones 1998: 2). Natural, social, economic and human capitals are drawn upon to achieve the most sustainable

Social Development In The Global South

2153 words - 9 pages Introduction Determinants of social development in the developing world are unclear just as the ones facilitating economic development and industrialization. The subject has remained a controversial one for a while, at least among academics, and might remain that way for years to come. From McGuire to Haggard and Kaufman to Huber and Stephens, different theories have been put forward to explain the origin or causes of social entitlements in the

Privatization Of Social Security Essay

1639 words - 7 pages end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest expenditure of the federal government (SSA). Evidence proves that today Social Security is not sustainable which is the reason that Social Security