Discussion for article #241795
Social Security is financed by a 12.4 percent tax on wages up to
$118,500, with half paid by workers and the other half paid by
employers. The amount of wages subject to Social Security taxes usually
goes up each year. But because there is no COLA, it will remain at
$118,500 next year.
Simple solution–remove the ceiling on SS taxes. Now was that so hard?
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There is no lie more transparent than the government saying no COLA because no inflation, and then bumping up Medicare premiums $54.
And I thought most inflation measures exclude food and energy, i.e. gas prices, so how do temporarily low gas prices figure into this “no inflation” bull?
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Each time I go the store and find the price of apples that I buy has increased 12%, each time I go to the store and find the cost of yogurt has gone up 10%, each time I go to the store and find cost of lettuce has gone up only 8%, each time, I am so glad to hear that there is essentially no inflation. I guess instead if milk I will have to drink gasoline–that’s gone down recently.
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Since I drive less than 6000 miles per year gas prices don’t have much effect toward balancing between no COLA and/or gas savings… The $35 and change per month COLA received last year did not even cover the additional cost the County imposed for waste collection transfer fees. I am lucky as I live off the grid for electric (heat/lighting), water (rainwater collection) and septic (use compost toilet) so don’t have that expense. I know that where I used to spend around $200 for groceries each month that has risen to over $300 per month and it is usually the same items. Chicken, hamburger, soup, pasta is about all I can afford. Last time I had a steak was last New Years as my celebration meal and that only happened because I ate cold cereal for my Xmas meal. Luckily I have a garden and fruit trees otherwise I believe it would be down to eating the dogs kibble.
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imkmu3 Are you trying to make Republicans in Congress heads explode? Lol
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Medicare prices generally go up because of the general cost of medical stuff goes up, even at the lower negotiated rates. It is not nefarious on the governments part exactly. As the two programs are related for the person but not in terms of execution. Maybe they should use a different measure to more reflect healthcare and such.
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I agree with that to help make the guy more sustainable but how much people get varies on how much they put in and other things in addition to inflation. Putting more money into the system would improve long term benefit payouts but would not fix this issue. Unless something new was tagged onto it.
At least that is my understanding.
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If we don’t remove the ceiling, we may eventually be looking at years where there is not just no COLA, but actual reduced benefits beyond pretending there is no inflation. People at the low end of Social Security get a bit more than they paid in, while people at the high end get less. The Bush depression and wage stagnation will have more people entering retirement at the low end, while the ceiling means less and less of total income is subject to Social Security taxes. It’s an engineered crises to give Republicans the opportunity to scrap the whole system, as if Social Security and the U.S. government were just a business that can declare bankruptcy and walk away from their obligations.
Yes, but that is a slightly different issue. The article is about inflation, not about funding going forward. Even if we could increase funding right now it would not really account for the problem in the article.
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Alternately, redefining the COLA for people of retirement age would help. People in the 60-90 year old cohort use one- half to one third as much gasoline as people in the 20-60 year cohorts. In the present CPI-W, the gas component is overweighted by a factor of 2-3 for people over 60. For the health care component the opposite is true - people over 60 have health care costs that are 2.5-5 times those of the 30-60 cohort, and the CPI-W underweights health care for people over 60 proportionately. A separate COLA for people over 60 makes sense in concept but would be politically difficult because it almost certainly would lead to higher social security benefits.