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Right now it looks like the current administration (with enough congressional votes) will pass a bill increasing social security benefits before inauguration of

Right now it looks like the current administration (with enough congressional votes) will pass a bill increasing social security benefits before inauguration of the new president, even though the social security fund is in a bad shape already. I tried searching and it looks like social security is the biggest expense of the budget. Medicare is larger than defense, excluding other health stuff like Medicaid and public health spending, which separately also add up to more than defense. That said I agree defense spending is out of control and inefficient, probably due to big contractors who have been robbing taxpayers for decades.

deleted 2y ago
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tzs 2y ago
The Social Security trust fund is projected to run out around 2033. The trust fund pays somewhere around 23% of people's monthly benefits. The rest of the monthly benefit comes from the payroll taxes of current workers. If Trump gets the tax cuts he talked about before the election that moves up the exhaustion of the trust fund by 1-3 years depending on whose projections you use. There are two approaches that can reasonably get Congressional support. 1. Raise the retirement age to 69 or 70 (from the current 67). You could still retire as early as 62 just like now, but when you retire early your benefit is less than your full benefit amount. Most projections I've seen have that adding a few years to the life of the trust fund. 2. Raise the cap on the payroll tax. The payroll tax is a flat rate tax on payroll (half paid by the employee and half by the employer) on the first $168k of you annual pay. Raising that cap to something like $400k would extend the life of the trust fund something like 70 years. From what I've read both Democrat and Republican voters strongly favor approach #2. In Congress Democrats favor #2 and Republicans favor #1. We probably should do both. One of the Republican arguments for #1 is that people live longer now, so it makes sense to raise the retirement age. But #1 is only a relatively short term fix for the trust fund. #2 is long term. In particular #2 fixes it long enough to get well past dealing with the situation we are in now where people born at the peak of the baby boom are retiring. We are seeing around 11k people a day turning 65. It's expected to remain in that ballpark through 2027. With #1 the trust fund should be good long past the time all those people have died. So do #2 to deal with the trust fund. Do #1 to address longer lifespans (if we decide that your longer life should mean more working years rather than more retirement years).

deleted 2y ago

[deleted]

tzs 2y ago

The Social Security trust fund is projected to run out around 2033. The trust fund pays somewhere around 23% of people's monthly benefits. The rest of the monthly benefit comes from the payroll taxes of current workers. If Trump gets the tax cuts he talked about before the election that moves up the exhaustion of the trust fund by 1-3 years depending on whose projections you use. There are two approaches that can reasonably get Congressional support. 1. Raise the retirement age to 69 or 70 (from the current 67). You could still retire as early as 62 just like now, but when you retire early your benefit is less than your full benefit amount. Most projections I've seen have that adding a few years to the life of the trust fund. 2. Raise the cap on the payroll tax. The payroll tax is a flat rate tax on payroll (half paid by the employee and half by the employer) on the first $168k of you annual pay. Raising that cap to something like $400k would extend the life of the trust fund something like 70 years. From what I've read both Democrat and Republican voters strongly favor approach #2. In Congress Democrats favor #2 and Republicans favor #1. We probably should do both. One of the Republican arguments for #1 is that people live longer now, so it makes sense to raise the retirement age. But #1 is only a relatively short term fix for the trust fund. #2 is long term. In particular #2 fixes it long enough to get well past dealing with the situation we are in now where people born at the peak of the baby boom are retiring. We are seeing around 11k people a day turning 65. It's expected to remain in that ballpark through 2027. With #1 the trust fund should be good long past the time all those people have died. So do #2 to deal with the trust fund. Do #1 to address longer lifespans (if we decide that your longer life should mean more working years rather than more retirement years).