If we are going to keep some kind of cap on contributions to Social Security, why don’t we triple it from where it currently stands to 480K. Let’s face it, anybody that’s making that much would not see this increase as a burden the way the rest of us would if we don’t get our full benefits in 15 years or so.
And while we’re at it, why don’t we just double the benefits for anyone over 72 and/or make sure that institutionalized care is at no cost to the elderly, their families, or the family trust.
I ***love*** the way you think. We also need to fix the system so that a family doesn’t have to literally go bankrupt & liquidate properties such as the surviving family’s home, in order for someone with dementia, for example, to qualify for elder care.
You are so right, Heather. I live in an Independent Senior Living apartment facility, but we have a number of people here (mostly younger than me (I'm 90)), who have various stages of dementia. They should be in either memory care or assisted living. But rent here is under $3500 a month - barely affordable. Rent at memory or assisted living starts at $5000 per month and goes to as high as $10,000 per month.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
Hi TJ. Actually there is an agency, particularly in California. Every County in the State has a Department of Social Services. or Welfare, or Health and Human Services or Human Services. And each Department, no matter what they call themselves has an Adult Protective Services Division.. Anyone, even someone not related to the individual can call in and place an inquiry or a suspicion of Elder Abuse. In most counties, you don't even have to identify yourself, just report what you have seen or heard. If the house is still in the elderly person's name, the County, upon proving elder abuse, can seize the property and use the proceeds to care for the owner in assisted living, memory care or skilled nursing facility. They can even set up a public guardian to take care of any assets and assure the care and well being of the person.. If, on the other hand, the daughter is able to prove, to the Adult Protective Services, that she is providing safe and adequate care for the senior there will be no further action.
This also has problems though, The New Yorker has an article of how this can be used to implement or perpetuate elder abuse and defrauding them out of all their money and possessions:
What a sad article. Thank you Sarah. Unfortunately elder abuse is rampant. There are laws in California to protect seniors living in assisted living, memory care or skilled nursing facilities. I live in what was advertised as 'Independent Senior Residential'. When I first moved in (2021) residents received many services, two meals a day, weekly housekeeping, wellness checks, 24/7 on site staff, activities, maintenance. New owners then decided they weren't making enough profit, so they took all services away. The law protects the landlord, not the lessee.
Thank you. I think the daughter is on the verge of placing her mother in the hands of professionals finally. But it’s good to know there are agencies that can handle these situations.
Assisted living doesn’t accept Medicaid so that’s not an option for people who cannot afford to pay for long term care. Assisted Living facilities in Wisconsin has kicking people as many are not accepting Medicaid.
True, plus medicaid by any name (including MediCal here in California) is income dependent AND that income is very, very low (one of my careers was in Social Services) so it's not only Wisconsin. The rent figures I quoted were for people like me who are paying their own living expenses, or those elders whose children are wholly or partially supporting the parent. Unless you are super wealthy and kept all your assets for yourself (I gave my grandchildren their inheritance when I moved in here) old age is not affordable, not golden, and a damned pain in the patootie
I have Medicare but also Tricare for life premiums deducted from husbands military retirement. I have to use Tricare for prescription coverage and their copays are high. Medicare is t free as some might think, it comes as you know out of social security. Are we the only western country that still has and supports expensive insurance companies? I know it drives the cost of medical care up along with prescriptions and dental. I remember my employer being the first in my area to cover prescriptions, office and ER visits, and dental and I hardly noticed any premium out of my pay and was thrilled but looking back I know now that once it took hold country wide the cost ski rocketed and show no sign of slowing. Might have been better off not being covered for those things in the long run, now the co pay on any of it, and allowing for the rate of the 80’s and 90’s cost before coverage by insurance, it seems it cost even more with insurance coverage.
I know back home they have nursing homes, some good some not good, that are state sponsored that accept people on Medicare. I guess medicade also but not sure.
Thanks Earl, im definitely looking into it, currently my Dad shelling out 10k per month for mom here in Ca. Starting with Florida residency requirements
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
We need to do all kind of things, and we will, after we first pass HJR54, the We the People Amendment. We are unlikely to be able to do anything useful until we restore our power. Help out at movetoamend.org
Spot on. I have had a few years in my career where I made 'rich person' money and the takeaway was NOT a sense of burden [from the big tax bill] - rather, it was gratitude [to be in that tax bracket and the fact that we kept the majority of our earnings]. The additional taxes needed to balance our budget and make sound investments in our country is nominal and wouldn't ruffle a single hair on any rich persons head! When Bill Clinton left office we were on track towards ZERO national debt within ~a dozen years, with only ~$0.05 - $0.07 cents more tax per dollar on the rich.
I personally thanked Bill Clinton for rescuing Social Security when he visited my town back when he was President. It was the first thing out of my mouth, and he replied "bless your heart"😄
If you mean "separation." SSA became an independent agency in 1995, Before that, it was part of HHS.
Clinton ended "welfare as you knew it" but at SSA some claimants who had been in pay status were cut from the rolls. "Alcoholism" for example, was eliminated as a "listed impairment." We had a run on suicides, threats, probably as a result.
I think that that assertion that Clinton was working on privatization is disinformation that targeted his wife when she was running for office. There are outright lies that have risen to the level of folklore in libertarian/Koch Bros circles. I was part of several think tanks down through the years. Republican folklore is that if the trust funds were in the market, the economy would skyrocket. However had they been in the market in 2009 there would have been few funds left.
One of my ideas was that private foundations could, as a matter of charity, contribute to keep the funds solvent.
Uh, I think you need to learn more about both. Dependency on either is often a side of a far deeper health problem: mental illness. Both dependencies begin as a coping mechanism to relieve the severity of clinical depression, bipolar disease, among other potentially treatable illnesses if only the government would force the damned insurance companies to lower their excessive profits and pay for mental health treatment too.
Yes. Ow-www. Medical rather than criminal, are addictions. Addiction, including alcohol, drug, are not a choice but an illness. Ignorant "sees" what eyes tell them, response is, "Just?, don't!" And THAT is victim-blaming. "Stop being ill." (Try that with cancer). Behavior addictions like gambling and eating disorders--debilitating, requiring "an intervention" and long-term sustained forms of support, but still ignorance is strong and an ignorant-form of kindness says, "You must enjoy it or you'd stop," restricting behaviors, excessive exercising behaviors, gambling behaviors, or, say, living outside in public, scared to be alone, when a person is mentally ill. Assume Karen Carpenter's parents were kind and wanted for her what "she" apparently wanted, but she was mentally ill and required care and treatment to veto her illness's irresistible behaviors, fighting on 2-fronts, inability to resist and efforts of supporters to separate a person from their debilitating impulsive irresistible behaviors or addiction. Doubting observers say, "I can't see your problem ..." UNDERSTAND instead that The person is ILL. Treatment, including long-term supports are required, some people need help to live their life and they'll say it, though they may not have the insight to understand themself--pendulum that did treat mental illness swung. While behaviors appear to be choices, a complaint is/ was that mal-coping behaviors were TOO medicalized so people feel defeated--helpless to learn to defend themselves against illness (in care and treatment OR struggling alone).
Furthermore, let me ask you this. What do you gain by characterizing addiction as a "voluntary disability." You will claim, I assume, that various funds shouldn't be used to help these people. BUT . . . as with most societal issues, it costs us more to deal with the fall out of NOT helping these people. It is cheaper, always, in the long run to help people to not only get rid of their addictions (or any bad circumstance), than to pay for police interventions, judges, juries, and incarcerations.
My understanding is that people who become addicted to alcohol may start out consuming an amount that is quite safe for most people. However, their bodies metabolize the alcohol differently, causing it become an addiction. So . . . it really is medical.
It wasn’t Clinton. It was a bipartisan deal worked out between Tip O’Neill and Ronald Reagan. What Clinton did was to make SSA “independent,” which took the SS debt off the books, hiding the insolvency.
What Reagan and Greenspan did in actuality, to avoid raising taxes, was to raid the social security funds they took out millions upon millions of dollars and left IOUs sitting there. That's a fact. Let's not give Reagan too much credit for anything here.
That’s incorrect on many levels. The biggest is that there is no social security “fund” as such. There is no government account holding cash for social security payouts. What’s called a “trust fund” has always been just an accounting entry, a claim on future tax receipt.
As for Reagan and taxes: iIf you look at the NIPA (National Income Product Account) data you’ll see that a combination of lower statutory tax rates and lower inflation led to a massive shift in patterns of investment. Billions invested overseas were repatriated to this country, and billions invested in Treasury bills to avoid tax were shifted to taxable investments. The result was both a massive increase inFederal tax receipts and the longest sustained period of economic growth in US history.
Has nothing to do with SSA trust funds. Foreign investors do not pay FICA taxes.
The Social Security trust funds are financial accounts in the U.S. Treasury. There are two separate Social Security trust funds, the Old-Age and Survivors Insurance (OASI) Trust Fund pays retirement and survivors benefits, and the Disability Insurance (DI) Trust Fund pays disability benefits.
You use NIPA which is accounting hogwash. NIPA teies to equate spending of capitol to producing of a product and counting it in GDP? HA HA!
According to the formula, national income is calculated by adding together consumption, government expenditure, investments made within the country, and its net exports- deducting imports from exports, foreign production by a resident of the country, and then subtracting the domestic production by residents of another ..
Actually, the debt and deficit increased during Clinton’s first two years in office. It wasn’t until the Republicans took over Congress that he was more or less forced to compromise and institute various reforms that deficits shrank. One of his biggest deficit cutting moves was drastically cutting defense spending, even though he’d already inherited a reduced military following the Bush cuts. Lowered returns on T-bills were a consequence of lower interest rates, which were a result of lower inflation.
You held the attitude all high income people should hold. Instead most of the wealthy seem to never be satisfied & want to grab an ever higher proportion of the wealth
Estate taxes are only paid by the middle class, as the wealthy have ways to circumvent those. Joe Kennedy put all his money in a trust fund that pays out to his heirs and has never paid any estate tax. Warren Buffet, another proponent of high estate taxes, made millions selling whole life insurance policies to the wealthy that were used to shelter estates from tax.
Aren't estate taxes for amounts in excess of $5M? I consider myself to be middle class and neither I, nor anyone I know, is likely to leave an estate that size.
That' was because the wealthiest among us wrote the law. Alleged that family businesses and family farms were lost due to inheritance taxes. Was complete BS. There were ways to protect them.
This is more propaganda from the anti-tax libertarian/Koch Bros. right wing. Many states have inheritance taxes. If you live in Pennsylvania, for example, the inheritance estate tax examiner is one of the most powerful positions in government. It's true that pour over trusts and "key man" life insurance can be used to try to skip a generation, but eventually it's the property, not the person that eventually gets taxed. There are many variations on the theme.
E,G. certain farm land and other agricultural property are exempt from Pennsylvania inheritance tax, provided the property is transferred to eligible recipients.
I have pondered that very thing. How many mansions, private jets,
luxury yachts, etc. etc. does a person need? Then I realized it’s an addiction. The first million, or billion these days is a rush. I’m sure there’s that moment when you set sail in your yacht that’s fun, but it’s never like that first billion, first mansion, jet, whatever is just not the same high. The high life becomes ordinary, commonplace, boring. And so like any junkie they want/need more.
Some of course find meaning and use their money for good. Bill Gates is helping third world countries get vaccinations. He seems pretty centered because he has a purpose.
Elon Musk on the other hand is a mess. Yes he’s captained some great technology but he had the misfortune of buying and heading up Twitter and has given a very strong voice to his neurosis. His ego is large enough to let him continue to expose what most people have the good sense to hide about themselves but it’s quite clear he’s deeply unsatisfied. He’s in a constant state of wanting more.
Addiction is the only sense I can make out of the behavior and psyche of the overly wealthy.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
Any rich person who sees their current (super low) taxes as a burden only feels that way thanks to years of right wing propaganda, which has poisoned our understanding of all the issues of the day. Propaganda works and rightwing media (and the GOP politicians who parrot it) are the root cause of all this nation's problems.
Hers the other: That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
I know a few local high income folks that see it as a burden because they are living above their means and don't want any money going to "those folks".
Social security and Medicare are paid by the taxpayer through their employment taxes. But they are paying for is insurance.. Yes we should make people pay your social security and Medicare based on their income up to 10 trillion dollars. Simple.
My guess is that a lot of the rich are making plans to move to habitats that will be least affected by global warming. (Considering that they will oppose using any significant spending to moderate the GW damage affecting the general population.) So they must conserve their wealth for their new estates in the temperate climate archipelago (TCA), wherever that may be.
In addition to your higher cap, there may be a need for an "alternative minimum" social security tax that recognizes carried interest, capital gains and dividends, and the taxpayer pays the higher of the higher cap on wages or similar cap on other income.
Simply tripling it to $480K would continue to give special treatment to the richest Americans as a percentage of their income. I agree with Professor Reich, "...eliminate the cap altogether on earnings in excess of, say, $400,000."
Here is the challenge - if you look at who is predominantly paying a higher percentage of income in taxes, it is those who fall right into that range. They are the 1% but are not the rich. Wealthy enough to tax heavily but not wealthy enough to have the kind of income that can escape taxes. The tax burden on this group causes them NOT to be progressive because they lose on either side - they pay any social program put into place and not the truly wealthy and they cannot avoid taxes the way that the truly wealthy can. The reality is that there has to be a break from 160 to 400K and THEN start taxing again. I am personally tired of being the one small segment that gets stuck with the bill all the time. My effective tax rate is twice that of someone truly wealthy - and your proposal wants to take more from me. Take it from Bezos. Or Musk. Or any of the people who can afford to spend silly money. I am not against paying taxes. I am against coming after the same group ALL of the time. Stop taxing my work.
Completely understand. It gets worse. The reality is that there is a group that pays under 15%, and it isn't you and me. You shouldn't pay 25% of your income in taxes; I shouldn't pay almost twice that when they're the people with extensive wealth are able to get out of paying anything. I am blessed to be a high earner, but chasing those who work is not the solution.
Karen, I think I understand your point; that politicians keep going to the same well each time for more tax revenue. I also wonder if the way we look at the tax base for SSI shouldn't change.
Currently, it seems based on the assumption that those who pay into it now will be the likely recipients later. With that, it only taxes from those who may collect in the future. However, it may be that widening the net of contributors, regardless of likelihood to collect is a better solution. Quite frankly, the rest of us gain tax burden from the targeted Federal bailouts to private companies, whose survival many of us won't see a direct benefit from. Since that precedent of unequal benefit from universal burden exists, then our wealthiest .1 and .01% should also be contributors to fund the dignified senior existence of those who aren't as wealthy.
Many working people fund 401ks for their own retirement, yet that self-funded pension doesn't exempt any of them from contributing to SSI for our fellow senior citizens. In order to continue, this country needs to act more like a community than a collection of individuals climbing over one another for advancement.
P.S. You shouldn't pay 25 or 50% without having universal healthcare. If we had UHI, I'd more calmly hand over 25%.
I have already watched it and understand. It misses the point. The original point from the poster was that we should fix Social Security by raising the cap to those that earn 480K per year AND NOT BEYOND. My argument was that you merely collect a group that is already carrying a significantly high % of their income as taxable already in that group and MISS the group that is not paying an equal % of their wealth in taxes. If I earn 1M of income then I will pay $332,955 in federal taxes. If Social Security is raised to 480K then I would pay Social Security taxes on almost 50% of that income (so at a combined rate of 7.65% I would add another $36720 in taxes). If I earned the same 1M in carried interest (private equity for example), then I would be taxed as capital gains at 15% and pay $150,000 and no Social Security. Oh - and I am buying the beer :) I have almost $220K more with which to do it.
That anyone would be my family, and yes, we notice it. We have a one income household because I've already worked 30 years and I have autoimmune issues. If you think that a family earning 200k in this environment is rich enough not to notice in the worst tax state in the nation think again.
That anyone would be my family, and yes, we notice it. We have a one income household because I've already worked 30 years and I have autoimmune issues. If you think that a family earning 200k in this environment is rich enough not to notice in the worst tax state in the nation think again.
That's genuine reform. The elites, even those who made a career being a critical elite among their elite peers, will not go that far. Funding, tenure, and being invited to the right club with the right people eating the right clothing bought at the right stores and coming to eat the right food and be part of the right social leadership, while politely disagreeing on how to get it right for we the right people, is at stake.
Why is there a CAP? The richest among Americans can afford the social security tax much more than the majority of the Americans making less than $160,000. 🤔
My assumption (not my opinion) is they felt those making over $160k would have their own retirement strategy and wouldn't need to rely on social security benefits, therefore they didn't need to be paying into the funding.
Like Robert said, they didn't anticipate wages would stagnate and that wealth would rapidly accumulate at the top. That's kind of funny considering who was president in 83, but hindsight is always 20/20.
Michael, That’s where means testing could come into play & should be employed! Of course those who r required to help pay for a certain benefit would cry foul if they were not allowed to accept that benefit even if they don’t realistically NEED IT! They use it to pay for their vacation home & Mercedes! That should be a crime to pay a millionaire a SS check or cover their healthcare with Medicare, even if it’s only the max pmt!
Social Security was framed as a compulsory insurance program. If there's a cap on benefits, it would seem reasonable there would be a cap on the premium. Since its founding, benefits have been awarded to people who didn't pay into the program making it a partial welfare system, but the cap remains to sustain the myth of it being an insurance program. Actually, it's just the raw power of the rich that sustains the cap. The rest is just their cover story.
Actually it's social insurance. People who receive benefits do so under someone's earnings record. May be a spouse, a parent, but someone had to pay to create a "primary insurance amount" (PIA) based on at least 10 years.
SSI (supplemental security income) funds do not come from SSA trust funds, rather from the general funds of the US.
Of course the 160,000 is based on 1960 income. A totally invalid number today. As an example my parents in1964 purchased an eight unit apartment building for $64,000. Today it sells for over a million. Things have changed quite a bit. I think $160,000 should now be 2 million at the very least.
Truely! If a waitress making 12k per year can afford to have all of her earning subjected to FICA, then an executive making 12k per hour can afford to have all of his earnings subjected to FICA as well.
Agree 100%. It just doesn’t make sense to me to cap it at such a low figure! By contrast, it should START after a reasonable amount of income…like a living wage, which wait staff never makes!
Once Upon A Time, Big Business and the Very Wealthy used to pay a 91% tax rate (1961) -- and surprisingly, they didn't cry and carry on like they do now when anyone even suggests raising their rate above the 37% rate (before taking advantage of umpteen tax loopholes) by even a fraction of 1%. And what a shocker: their pawns in Congress kept lowering the top tax rate and the National Debt kept growing by leaps and bounds at the same time. Can anyone here say, "Cause & Effect"?
You are spot on in your assessment. And "Pawns in Congress" is a very apt description.
I remember the corporate attitude from the 1950s, 1960s, and early 1970s. Not only did corporations NOT "cry and carry on like they do now" about a much higher tax rate, they appreciated their employees. They provided a living wage and benefits and that was without employees having to unionize. And now their corporate greed financially forces employees to attempt to unionize, employees who make the corporation function, who are the heart of the corporation and they have to fight for living wages and benefits!
It is reprehensible how employees are struggling much like employees struggled for fair wages, benefits, and better working conditions 100+ years ago. Are elected pols any help? Nope! The majority on both sides of the political divide in Congress are responsible for this slow teardown of American workers' wages, benefits and working conditions. And on the state level, Iowa's Senate voted in favor of legislation to undo 100+ years of child labor laws. I have no doubt their Republican-controlled House also will pass the legislation; furthermore, I have no doubt Iowa's Republican governor will sign the legislations into law. And I have no doubt that other "Red" states will soon follow suit. I can only hope the US Dept. of Labor can step in and challenge Iowa's legislation to SCOTUS if necessary...although given recent actions by the Supremes, I don't have much hope of SCOTUS ruling against "states' rights" in this matter.
I know I am immensely cynical of expecting improvement in workers' wages & benefits, but I've personally witnessed the slow teardown of workers' rights & decreases in wages and I see no hope for the immediate future.
My mother is 85 & still has my father’s benefits from his career in the elevator industry, even though he died at 47 in 1983. Full medical, 2 dental check up & cleanings a year, yearly eye exam & glasses- all covered, & most rx’s max at a $10 copay. She fell several months ago & spent over a week in the hospital, never saw a bill or paid a dime out of pocket. What’s infuriating is knowing we can do a helluva lot better because I’ve seen & lived it, while my experiences & that of most post-boomers couldn’t possibly be more different. Every time I see someone running a GoFundMe to help a friend who needs medical care or even to bury a family member, all I can think is how badly greed has hurt & warped our country
That is very true and the greedy millionaires and billionaires didn't exist anywhere close to the level we have today. We had sane corporations, business owners and people at that time. Everyone was working to fullfil the American dream. Today we have the likes of Elon Musk who dreams of escaping to Mars.
One difference between 1961 and now is that most business leaders and adult citizens had experienced the Depression. There certainly were those out there even then who hated the New Deal and Social Security (can you say "John Birch Society" boys and girls), but they were a tiny minority and the majority wanted to do whatever they could to prevent anything like what they experienced. That was my parents' generation and before. My generation grew up in the post-war prosperity of the 50s. We heard our parents stories, but had no first hand experience. Then in 1966 the haters found their champion in Ronald Reagan and we know what has happened since. As fewer and fewer remembered why we had social welfare, regulations and unions, the government was hollowed out and corporations raced as fast as they could to promote an economy of inequality. As one of the last vestiges of the New Deal, Social Security will always be the prime target of the Republicans. The rest of us need to keep our eyes wide open and be vigilant.
Thank you Robert Kelly for reviewing our history since 1929 to the present. You have been able to zero in on the belief system that existed shortly after the depression. It's that belief system that's missing in action today. You have pointed out that the experience that our parents suffered during the depression was a marker that people believed should never be repeated. That experience needs to be make real for people today. I, like you, grew up with those values. It is hard to convince young people today that the tax rate in 1961 was 91%, and although people grumbled they never thought we'd bring it down to 37%. Reagan made it possible. We need to find ways to impress on the current generation that the values our parents held are necessary to restore our democracy today. We need Biden to emulate FDR! The New Deal should be resurrected. Democrats have to take the fight to the MAGAT'S!
Eadie,I believe he has tried but once the House Repubs took over, things have stopped & become more difficult to pass! If only we could kick them out of power as well as Sinema & Manchin & hold onto the Senate & Presidency in ‘24, then Biden’s promises could be fulfilled! We have to get out the Vote of all Dems & Independents to make it happen! We absolutely cannot allow a bunch of fascist authoritarians to gain control of this country & our Democracy! That would surely give cause for another civil war & nobody wants that!
Given the mechanics of Congress, to _actually_ get things done requires 1) a majority in the House, 2) a SUPERmajority in the Senate [so the minority can't filibuster items into insignificance), and 3) a President of the same Party as the majorities in the two Houses. Even then, because of the Conservative supermajority in SCOTUS (6-3 split), Republicans can (and most likely will) contest anything passed in Congress that the GOP had failed to block and kick it to SCOTUS where those 6 Republican appointees will most likely declare the contested item to be "unconstitutional" according to their Originalist interpretation of the Constitution.
Well yes but Reagan actually did the Republican Party a great favor. He made sure that a lot of the crazy people got out of the institutions. They are our Republican congressman and senators today. /S
I realize you are using cynicism to criticize our Congress critters but that action by Reagan was no joke at the time.
My wife was attacked by a man freshly released for a mental institution in Illinois while she was jogging on a trail in a city park. A sad day in our lives for sure.
That’s because no one actually paid that 91%. Our tax code had thousands of exemptions, and individuals structured their income using things like family trusts to avoid the tax. The 1985 tax reform act eliminated thousands of special tax breaks, lowered tax rates, and yet federal tax revenue went up, and the tax burden shifted upward, to wealthier taxpayers.
Ahhh, but I am certain that back when the top rate was 91%, even with tax loopholes available and exploited, that after deductions, they were still paying a HELLUVA LOT MORE than 37%. (Keeping in mind that now, with 37% being listed as the top rate, most of them are most definitely exploiting current loopholes to pay significantly less than 37%. Many pay NOTHING AT ALL: https://itep.org/55-profitable-corporations-zero-corporate-tax/
The article you link to confuses- or chooses to ignore- the difference between gross and net income.
You’re wrong about tax collected during times of high statutory rates. Rather than guessing, look up the numbers. They’re available on the Fed’s web site. Even as rates rise and fall, the government collects roughly 15% of GDP. As statutory and effective rates change, so do patterns of investment.
Wealthy people and large companies can structure their income to minimize tax. Ordinary people can’t. That why tax increases hit the middle class hardest.
I am retired from working at SSA and totally agree that the funding solution lies in greatly raising (or eliminating) the payroll tax (FICA) cap over a certain amount, such as the $400,000 you suggest.
I agree and I also agree with Robert that part of the problem was that wages haven't kept up, but also note that the main problem was that the baby boomers overwhelmed the system, and by 2034 the population rate will return to more normal levels, as baby boomers pass on.
I was an administrative law judge for over 10 years at SSA, before I worked at DOL. I also was a member of the American Bar Association task force that looked into solvency years ago. At that time, I offered some other solutions. One was that SSA retirement should be endowed. SSA retirement has been a boon to the country, reduced old age poverty and with the inclusion of the disability program, aids workers and their families, giving the average family an insurance policy worth on average a million dollars.
SSA is an investment. Most of us receive far more than our contributions. One way to reduce the rate of the threat of default is to reduce the rate of increase. SSA is also a charity. https://www.ssa.gov/agency/donations.html
Greenspan, Dole et al were told. Raised the rate from 4.2 to 6.2%. Another half percent would have eliminated the problem. Called it a "short-term financing problem." https://www.ssa.gov/history/greenspn.html
Alarms began almost as soon as the "fix" went into effect. Also failed to predict that so many people would choose early retirement.
The rest of it is that after 2034, the rate of claims against the trust funds begin to decline as population begins to stabilize. One reason I came up with my charity proposal is that small donations could extend the risk of insolvency beyond 2034, when the rates begin to decrease.
Interesting article, thanks. I had no idea that SS could accept charity. But it's a bit off-putting to contemplate the government use of the equivalent of a GoFundMe.
Although a couple of ex-commissioner thanked me for activism, SSA does not advertise it. Pretty sure the Republican administrations were interested in privatization and did not want the funds to succeed. I asked the Biden administration to advertise bur so far...crickets.
I could not get the government to include it in their annual charity giving programs.
I think the people that can actually ensure that Social Security benefits survive don’t really care about making sure that happens because they will always have the money to survive.
Josh Marshall deserves huge credit for using early Talking Points Memo to go to war quite effectively against GWB's plan to turn Social Security over to Wall Street.
I absolutely agree there should be no cap. The top 1% have never paid their fair share yet they have gobbled up the benefits of our "booming" economy while the 99% are drowning, particularly since the pandemic. No cap = No problem!
“Put simply, a big part of the American working population is earning less than the Social Security trustees (including me) anticipated decades ago — and therefore paying less in Social Security payroll tax.”
It’d be easier politically to raise the cap if we’d stop calling it what is ISN’T: a tax.
Taxes are collected by governments which then use them to fund other things, from powering streetlights to operating a military. But the money collected by the Social Security Administration is directed toward an entirely different purpose: RETURNING IT to the people who paid into it — every. Single. Penny. of it, and more, if the payer lives past 77 years old.
The great British economist John Maynard Keynes, on whose work most reputable economic theory is based, once wrote that “expenditures rise to meet income,” meaning that, left to his or her own devices, the average salaried individual will spend everything he or she earns — and often more, which is why and how people get into debt.
Republicans love to call Social Security and Medicare “entitlements,” making it seem as though the government is giving a gift to recipients. Unfortunately, Democrats and the press don’t dispute that characterization, which they should, stridently. The fact is that the two programs are nothing but DEFERRED SALARY, guaranteeing that when people retire and their earning days are over, they won’t be left with nothing. That’s how Franklin Roosevelt and a Democratic Congress conceived Social Security in the mid-1930s, and Lyndon Johnson and a Democratic Congress conceived of Medicare in the mid-1960s (granted, if someone pays into them all his or her working life and then drops dead the days he or she turns 65, it’s a bad deal, but fewer and fewer people die at that age. Most people do end up collecting more than they paid in).
Irrespective of the individual issue, all politics is ultimately about one thing, and one thing only: money. This issue IS actually about money, and so, for once, should not be about politics.
Wether or not Social Security brings a net benefit depends on life expectancy. As we know life expectancy for women is significantly higher for women than for men. Also life expectancy for Asians is very high. For Blacks the real rate of return is negative.
Yes it is turning more and more into a welfare program and that is the real danger. It will lose the support of young people who see a negative return. Mark my word, that is the greatest danger to the program.
Since Reagan, the vultures who want control of the trillions in the trust funds have been waging generational warfare. When I was young, I was told there would be nothing left.
Were wrong then and only suckers believed them.
Some people avoided paying into the system....saved money on taxes....in the end are net losers. Low earnings record = low benefits.
Wasn't a huge amount borrowed by the government years ago? We shouldn't have to suffer as a result. I am disabled and worked for a living before an accident happened. I live on less than $900/mo now and it's not living at all, barely surviving. I'm only 58 and am scared about my future. There should be no cap. If you earn it, pay it.
Daniel Moynihan outlined much of that in 'Came the Revolution.' Though, I think 'borrowed' might be a bit generous. 'Stole' might be more accurate. The Reagan Administration played fast and loose with the Social Security funds.
You are not alone. We are all whistling past the graveyard now. Anyone could have an accident. We all share your fear. I hope something changes for all our sakes.
Yes there was a large amount borrowed. Reagan and Greenspan raided social security and left IOUs in the place of the money that was in there. I don't know if the government ever repaid that money gouged by Reagan. He claimed he would not raise taxes again so he raided the ss. Daniel Solomon would you care to enlighten us please.
Income equality certainly plays a role in sustainable base level funding.
Moving forward we may want to look at Switzerland, which has a model fairly similar to the U.S. system.
- No cap on contributions but a decreasing rate for high earners.
- No contributions required by VERY low earners.
- Eqivalent of social security is seen as part of a three pillars model - Social security, private savings, and employment- or self-employment-based plans.
Changing demographics are a given in any society and any pension plan must be routinely adapted to meet the new challenges.
The “pillars” of the retirement system you mention is the very model of the Federal Employment Retirement System, FERS, that followed from the demise of the Civil Service Retirement System, CSRS, in 1986 or thereabouts when I transferred from TVA. The immediate effect of that was that the baseline “pension” of CSRS was cut in half. Social Security was explicitly designated as the offsetting component.
The personal savings aspect is the Thrift Savings Plan, TSP, for which the securities started as govt bonds. In a short time “mutual” funds were introduced which brought market-based returns and risks (think 9/11 and the “Great Recession”). A late development were the “years” funds varying risk as the age approached the designated year.
This appeared to be a reasonable approach since by instituting FERS. We were told to think in terms of about a third of the support to the total retirement achievable. And it appeared to be working.
As Robert points out, maintaining Social Security to service foreseen future needs has been ignored in Congress. So, that pillar is self-deteriorating but COULD be ameliorated.
As Robert also describes, the successful consistent suppression of cost-of-living raises in federal salaries along with the deficit between what federal employees are paid and what contractors cost the government has significantly reduced employees’s input to both the “pension” component and the personal savings component.
To contend with budget challenges, successive Republicant administrations shaved the TSP returns on the govt bonds, the largest “pot” of employees’ contributions below the prevailing market rates until TFG got that below 1/2 percent.
I don’t offer this simply as a whine. It can be a successful approach. But if you build it with what proves to be unhardened clay on sand foundations, it will erode from neglect and intentional assault.
BTW, military retirement is also being shifted into the same structure. I know that the TSP has been opened to active duty military which leads me to infer that the traditional “pension” component of military retirement is also taking hits similar to those that sank CSRS.
The underlying issues with "defined benefit" models is that we are not as good at predicting the future as we thought. Simply moving to defined contribution is not enough, as you mention.
Meaningfully engaging in a three pillars model does require sufficient income to save for the future. The current shameful minimum wage and ACA provisions that encourage part-time work need to go. A living wage is not an "entitlement" and healthcare should be available universally.
Switzerland has quite a few protections in its program that I did not mention. The types of investments allowed in the "Third Pillar" private accounts are very limited and risk moderated. There is also a statutory minimum return for uninvested deposit accounts, which the banks totally hate because the rate of return is more than paid on their savings accounts.
Company pension funds are also restricted in the types of investments. By and large the investments of the pension funds are in government bonds or income producing real estate such as apartment blocks. The preference towards income-producing real estate is used as a means to deal with the high cost of apartments. (BTW rent is also controlled!). Sure beats having private equity groups gobble up dwellings so that they can "extract" value.
The present day Social Security System is experiencing solvency issues because past presidents used the sleeping funds as an endless source of free money. Ronald Reagan and George Bush "illegally" withdrew funds from the people's retirement accounts to the tune of 3 trillion dollars during their terms as President. Their proposed federal budgets would never have been approved if they had asked congress for the monies they actually intended to spend so they dummied their proposed budgets and then as they needed more and more money they just wrote checks and withdrew the funds from the Social Security System. With each massive withdrawal they weakened a system put in place to help retiring Americans. I asked the head of the Republican party in Texas about this illegal pilfering, her answer was chilling. She calmly said "they weren't the only ones that did it." Our past presidents stole the very money we put away to help us through the years when we would be too old to work. It seems our security had no future. You may not believe what I just told you, but I saw copies of the forms used to take our money from the fund. They were obtained through the "Freedom of Information Act" and anyone can get copies if they are still available. The illegal withdrawal of our money by our own Presidents is why the present day Social Security System is in such a depleted condition. A sad testament to the very government we trusted with our future.
I took a Poly-sci class from a professor who had a doctorate degree in political science. On the first day of class he dropped the proposed book for the course in the waste basket and he told us we were going to learn what our government didn't want us to know.
I noticed a couple of others on this blog who mentioned this, also. I remember when this issue of various sources pilfering our SS money was being talked about, but then was dropped and seemingly forgotten. I wish Prof. Reich had gone into this subject as one of the reasons for our “short fall” in the fund.
I also believe our tax money of this most prosperous country is also a slush fund for a lot of things we aren’t privy to. I understand that taxes aren’t necessarily used in ways that 100% of the population would decidedly want, but it should at least be for the good of the people as a whole.
Greed knows no boundaries and has no scruples. And con artists are in many shapes and forms.
I'm sure it went to new heights in the corrupt Trump administration, but it was certainly prominent in the Reagan & Bush administrations & present in the Clinton & probably Obama presidencies.
I too have heard this and wish Mr. Reich had included info about it in the article. I also get so frustrated when politicians talk as though the only solution is to raise the retirement age as though raising the cap is not even in the realm of their imagination. And the media mostly repeats the same thing.
The "crisis" of Social Security is that the Boomer's retirement means that the Trust Fund is to be used for its stated purpose of paying benefits not for low cost loans to fund borrowing by the Federal Government. Quite amazing that this never comes out!
Oh, I believe it! I heard about it as it was going on. Reprehensible & never should've been allowed. But Presidents apparently have the ability to steal funds whenever they need them & from whatever source they choose in our kleptocracy.
Social Security taxes should be on all income, even for the very rich, so people will have a stake in it when they need it. That should include capital gains and all the income that usually slips through loopholes for the very rich. It's about time they contribute fully to our nation's program to support disabled and older people. And, members of Congress and all federal officials should be on Social Security and Medicare too, no special medical and retirement programs that will keep them from experiencing Social Security and the Medicare challenges, like everyone else in this country who has retired.
The Alliance of Retired Americans (ARA) has also been advocating for eliminating this CAP among other things for retirees. Like me, become a member with no dues if a union retiree while all others are asked to donate what they can afford. Google to find a local ARA chapter or contact your union rep.
I am a retired firefighter-paramedic with a pension and a small SS benefit. I find ARA is more helpful and active with this than AARP.
I left AARP when I noticed they bemoaned certain policies, but consistently refused to place blame. Example: saying "Congress" rather than "Republicans in Congress" . This muddles who is doing what, so that a party that voted as a block against a popular bill still gets credit for the good it does. AARP also never mentioned obscenely huge military slice of government spending pie.
I was an AARP life member, but resigned when they championed so-called “Managed Care” (more accurately Managed Cost or Mangled Care) and sponsored such deceptive plans. I called them and asked what portion of their income came from that and they refused to say. While they do some positive things, I will never trust them.
AARP has plenty of company in selling the Medicare Dis-Advantage scam. Many state employees' pension funds also market the program. Seems to be a flagrant breach of fiduciary duty by those plans!
Assuming you still have American democracy in 2024, I imagine that you would need a majority of Democrats in both houses to push through such a reform as it would mean taxing he wealthy - but the same applies to gun control, ending gerrymandering, and putting human rights, civil liberties and public accountability on a firmer footing.
And no Manchins, Sinemas & Testers who often switch to the Republican side, which will be extremely challenging for the Senate race, where most seats up for grabs are held by Democrats.
Republicans (all) are a cancer on the nation and a clear threat to our democracy, politics & govt function, economy & middle class, common sense & decency, public health & safety, the planet, and truth. There's not a single thing they lobby for that doesn't harm 99% of us. There's not a single beneficial law/proposal from Dems that they don't fight tooth & nail against. I wish it weren't so ... but they're dangerous & fascistic and we can't fix it if we don't call it out.
It troubles me that not many people know about the SS tax cap. Why is it that we are so dumb and keep supporting these people that are actively harming us?
JJ Young ; It may have to do with the fact that nothing is taught in school about Social Security, much less the SS tax cap. Not much about economics is taught, much less financial literacy. It's like banning books that teach about sexuality and 'the facts of life', and then wondering why so many young women had unplanned pregnancies. So many young couples 'had' to get married; even today that happens. When one considers that it is almost impossible to live alone financially, ,most are economically forced to have a partner in order to afford housing and other costs of living. Meanwhile, we have a growing number of billionaires, who have so much money they can buy government and cause 'mischief'.
If we are going to keep some kind of cap on contributions to Social Security, why don’t we triple it from where it currently stands to 480K. Let’s face it, anybody that’s making that much would not see this increase as a burden the way the rest of us would if we don’t get our full benefits in 15 years or so.
And while we’re at it, why don’t we just double the benefits for anyone over 72 and/or make sure that institutionalized care is at no cost to the elderly, their families, or the family trust.
I ***love*** the way you think. We also need to fix the system so that a family doesn’t have to literally go bankrupt & liquidate properties such as the surviving family’s home, in order for someone with dementia, for example, to qualify for elder care.
You are so right, Heather. I live in an Independent Senior Living apartment facility, but we have a number of people here (mostly younger than me (I'm 90)), who have various stages of dementia. They should be in either memory care or assisted living. But rent here is under $3500 a month - barely affordable. Rent at memory or assisted living starts at $5000 per month and goes to as high as $10,000 per month.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
Hi TJ. Actually there is an agency, particularly in California. Every County in the State has a Department of Social Services. or Welfare, or Health and Human Services or Human Services. And each Department, no matter what they call themselves has an Adult Protective Services Division.. Anyone, even someone not related to the individual can call in and place an inquiry or a suspicion of Elder Abuse. In most counties, you don't even have to identify yourself, just report what you have seen or heard. If the house is still in the elderly person's name, the County, upon proving elder abuse, can seize the property and use the proceeds to care for the owner in assisted living, memory care or skilled nursing facility. They can even set up a public guardian to take care of any assets and assure the care and well being of the person.. If, on the other hand, the daughter is able to prove, to the Adult Protective Services, that she is providing safe and adequate care for the senior there will be no further action.
This also has problems though, The New Yorker has an article of how this can be used to implement or perpetuate elder abuse and defrauding them out of all their money and possessions:
https://www.newyorker.com/magazine/2017/10/09/how-the-elderly-lose-their-rights
What a sad article. Thank you Sarah. Unfortunately elder abuse is rampant. There are laws in California to protect seniors living in assisted living, memory care or skilled nursing facilities. I live in what was advertised as 'Independent Senior Residential'. When I first moved in (2021) residents received many services, two meals a day, weekly housekeeping, wellness checks, 24/7 on site staff, activities, maintenance. New owners then decided they weren't making enough profit, so they took all services away. The law protects the landlord, not the lessee.
Thank you. I think the daughter is on the verge of placing her mother in the hands of professionals finally. But it’s good to know there are agencies that can handle these situations.
Thanks for being a good neighbor
Assisted living doesn’t accept Medicaid so that’s not an option for people who cannot afford to pay for long term care. Assisted Living facilities in Wisconsin has kicking people as many are not accepting Medicaid.
True, plus medicaid by any name (including MediCal here in California) is income dependent AND that income is very, very low (one of my careers was in Social Services) so it's not only Wisconsin. The rent figures I quoted were for people like me who are paying their own living expenses, or those elders whose children are wholly or partially supporting the parent. Unless you are super wealthy and kept all your assets for yourself (I gave my grandchildren their inheritance when I moved in here) old age is not affordable, not golden, and a damned pain in the patootie
I have Medicare but also Tricare for life premiums deducted from husbands military retirement. I have to use Tricare for prescription coverage and their copays are high. Medicare is t free as some might think, it comes as you know out of social security. Are we the only western country that still has and supports expensive insurance companies? I know it drives the cost of medical care up along with prescriptions and dental. I remember my employer being the first in my area to cover prescriptions, office and ER visits, and dental and I hardly noticed any premium out of my pay and was thrilled but looking back I know now that once it took hold country wide the cost ski rocketed and show no sign of slowing. Might have been better off not being covered for those things in the long run, now the co pay on any of it, and allowing for the rate of the 80’s and 90’s cost before coverage by insurance, it seems it cost even more with insurance coverage.
I know back home they have nursing homes, some good some not good, that are state sponsored that accept people on Medicare. I guess medicade also but not sure.
Heather; this is one thing that Florida does right. If you navigate the paperwork, just about, anyone can qualify for government paid long-term care.
DeSantis probably isn't aware that exists or it would already be banned-don't make it too public!
You just did!
Not for Dementia , basic care they pay some, not all.
A few years ago they paid for Alzheimer’s. It may have changed, but I doubt it.
Thanks Earl, im definitely looking into it, currently my Dad shelling out 10k per month for mom here in Ca. Starting with Florida residency requirements
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
We need to do all kind of things, and we will, after we first pass HJR54, the We the People Amendment. We are unlikely to be able to do anything useful until we restore our power. Help out at movetoamend.org
Spot on. I have had a few years in my career where I made 'rich person' money and the takeaway was NOT a sense of burden [from the big tax bill] - rather, it was gratitude [to be in that tax bracket and the fact that we kept the majority of our earnings]. The additional taxes needed to balance our budget and make sound investments in our country is nominal and wouldn't ruffle a single hair on any rich persons head! When Bill Clinton left office we were on track towards ZERO national debt within ~a dozen years, with only ~$0.05 - $0.07 cents more tax per dollar on the rich.
I personally thanked Bill Clinton for rescuing Social Security when he visited my town back when he was President. It was the first thing out of my mouth, and he replied "bless your heart"😄
I read that Clinton and Gingrich were about to announce a bi- partisan plan to privatize SS, but the Monica L scandal broke. Thank you Monica.
If you mean "separation." SSA became an independent agency in 1995, Before that, it was part of HHS.
Clinton ended "welfare as you knew it" but at SSA some claimants who had been in pay status were cut from the rolls. "Alcoholism" for example, was eliminated as a "listed impairment." We had a run on suicides, threats, probably as a result.
I think that that assertion that Clinton was working on privatization is disinformation that targeted his wife when she was running for office. There are outright lies that have risen to the level of folklore in libertarian/Koch Bros circles. I was part of several think tanks down through the years. Republican folklore is that if the trust funds were in the market, the economy would skyrocket. However had they been in the market in 2009 there would have been few funds left.
One of my ideas was that private foundations could, as a matter of charity, contribute to keep the funds solvent.
Both alcoholism and drug addiction are voluntary disabilities.
Uh, I think you need to learn more about both. Dependency on either is often a side of a far deeper health problem: mental illness. Both dependencies begin as a coping mechanism to relieve the severity of clinical depression, bipolar disease, among other potentially treatable illnesses if only the government would force the damned insurance companies to lower their excessive profits and pay for mental health treatment too.
Yes. Ow-www. Medical rather than criminal, are addictions. Addiction, including alcohol, drug, are not a choice but an illness. Ignorant "sees" what eyes tell them, response is, "Just?, don't!" And THAT is victim-blaming. "Stop being ill." (Try that with cancer). Behavior addictions like gambling and eating disorders--debilitating, requiring "an intervention" and long-term sustained forms of support, but still ignorance is strong and an ignorant-form of kindness says, "You must enjoy it or you'd stop," restricting behaviors, excessive exercising behaviors, gambling behaviors, or, say, living outside in public, scared to be alone, when a person is mentally ill. Assume Karen Carpenter's parents were kind and wanted for her what "she" apparently wanted, but she was mentally ill and required care and treatment to veto her illness's irresistible behaviors, fighting on 2-fronts, inability to resist and efforts of supporters to separate a person from their debilitating impulsive irresistible behaviors or addiction. Doubting observers say, "I can't see your problem ..." UNDERSTAND instead that The person is ILL. Treatment, including long-term supports are required, some people need help to live their life and they'll say it, though they may not have the insight to understand themself--pendulum that did treat mental illness swung. While behaviors appear to be choices, a complaint is/ was that mal-coping behaviors were TOO medicalized so people feel defeated--helpless to learn to defend themselves against illness (in care and treatment OR struggling alone).
Furthermore, let me ask you this. What do you gain by characterizing addiction as a "voluntary disability." You will claim, I assume, that various funds shouldn't be used to help these people. BUT . . . as with most societal issues, it costs us more to deal with the fall out of NOT helping these people. It is cheaper, always, in the long run to help people to not only get rid of their addictions (or any bad circumstance), than to pay for police interventions, judges, juries, and incarcerations.
My understanding is that people who become addicted to alcohol may start out consuming an amount that is quite safe for most people. However, their bodies metabolize the alcohol differently, causing it become an addiction. So . . . it really is medical.
you don't know anything about them, obviously.
It wasn’t Clinton. It was a bipartisan deal worked out between Tip O’Neill and Ronald Reagan. What Clinton did was to make SSA “independent,” which took the SS debt off the books, hiding the insolvency.
What Reagan and Greenspan did in actuality, to avoid raising taxes, was to raid the social security funds they took out millions upon millions of dollars and left IOUs sitting there. That's a fact. Let's not give Reagan too much credit for anything here.
I agree with you.
That’s incorrect on many levels. The biggest is that there is no social security “fund” as such. There is no government account holding cash for social security payouts. What’s called a “trust fund” has always been just an accounting entry, a claim on future tax receipt.
As for Reagan and taxes: iIf you look at the NIPA (National Income Product Account) data you’ll see that a combination of lower statutory tax rates and lower inflation led to a massive shift in patterns of investment. Billions invested overseas were repatriated to this country, and billions invested in Treasury bills to avoid tax were shifted to taxable investments. The result was both a massive increase inFederal tax receipts and the longest sustained period of economic growth in US history.
Has nothing to do with SSA trust funds. Foreign investors do not pay FICA taxes.
The Social Security trust funds are financial accounts in the U.S. Treasury. There are two separate Social Security trust funds, the Old-Age and Survivors Insurance (OASI) Trust Fund pays retirement and survivors benefits, and the Disability Insurance (DI) Trust Fund pays disability benefits.
Billions went overseas bud, not repatriated except for a few folks at the upper 1 percentile!
You use NIPA which is accounting hogwash. NIPA teies to equate spending of capitol to producing of a product and counting it in GDP? HA HA!
According to the formula, national income is calculated by adding together consumption, government expenditure, investments made within the country, and its net exports- deducting imports from exports, foreign production by a resident of the country, and then subtracting the domestic production by residents of another ..
There was (and is) no SSA debt. The trust funds are solvent... the issue is 2034.
You’re confusing short term cash flow with solvency, which is a function of expected revenues and obligations.
I am not. Separate funds.
Ya Clinton moved social security and other stuff to balance budget. Lowered returns on T-bills less interest to pay. Pretty sly move, but it worked.
Actually, the debt and deficit increased during Clinton’s first two years in office. It wasn’t until the Republicans took over Congress that he was more or less forced to compromise and institute various reforms that deficits shrank. One of his biggest deficit cutting moves was drastically cutting defense spending, even though he’d already inherited a reduced military following the Bush cuts. Lowered returns on T-bills were a consequence of lower interest rates, which were a result of lower inflation.
As if there were no negotiations and no compromises.
CATO?
You held the attitude all high income people should hold. Instead most of the wealthy seem to never be satisfied & want to grab an ever higher proportion of the wealth
I also like inheritance taxes. Let the dead finance SSA.
Estate taxes are only paid by the middle class, as the wealthy have ways to circumvent those. Joe Kennedy put all his money in a trust fund that pays out to his heirs and has never paid any estate tax. Warren Buffet, another proponent of high estate taxes, made millions selling whole life insurance policies to the wealthy that were used to shelter estates from tax.
Aren't estate taxes for amounts in excess of $5M? I consider myself to be middle class and neither I, nor anyone I know, is likely to leave an estate that size.
That' was because the wealthiest among us wrote the law. Alleged that family businesses and family farms were lost due to inheritance taxes. Was complete BS. There were ways to protect them.
This is more propaganda from the anti-tax libertarian/Koch Bros. right wing. Many states have inheritance taxes. If you live in Pennsylvania, for example, the inheritance estate tax examiner is one of the most powerful positions in government. It's true that pour over trusts and "key man" life insurance can be used to try to skip a generation, but eventually it's the property, not the person that eventually gets taxed. There are many variations on the theme.
E,G. certain farm land and other agricultural property are exempt from Pennsylvania inheritance tax, provided the property is transferred to eligible recipients.
I have pondered that very thing. How many mansions, private jets,
luxury yachts, etc. etc. does a person need? Then I realized it’s an addiction. The first million, or billion these days is a rush. I’m sure there’s that moment when you set sail in your yacht that’s fun, but it’s never like that first billion, first mansion, jet, whatever is just not the same high. The high life becomes ordinary, commonplace, boring. And so like any junkie they want/need more.
Some of course find meaning and use their money for good. Bill Gates is helping third world countries get vaccinations. He seems pretty centered because he has a purpose.
Elon Musk on the other hand is a mess. Yes he’s captained some great technology but he had the misfortune of buying and heading up Twitter and has given a very strong voice to his neurosis. His ego is large enough to let him continue to expose what most people have the good sense to hide about themselves but it’s quite clear he’s deeply unsatisfied. He’s in a constant state of wanting more.
Addiction is the only sense I can make out of the behavior and psyche of the overly wealthy.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
What do you consider "rich"?
People making that much see every penny "taken/given" as a burden.
Any rich person who sees their current (super low) taxes as a burden only feels that way thanks to years of right wing propaganda, which has poisoned our understanding of all the issues of the day. Propaganda works and rightwing media (and the GOP politicians who parrot it) are the root cause of all this nation's problems.
Hers the other: That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
That’s how it should be in a wealthy country like ours but what if the elderly person has a home that’s grown exponentially in value since it was bought in the 70’s (back when what’s now known as Silicon Valley was mostly orange orchards)at $1.1 million and as substantial savings? You’d think she, the elderly person in this case, would afford good care by professionals in a nice facility but it’s not the case. It’s sad really as she is not mentally able to choose for herself, someone else, her daughter, does that in order to earn the going rate for care in the area rather than pay a professional who is qualified. Her daughter is paying herself from the estate but can’t possibly provide near the level of round the clock care a professional facility could offer. Its sad to watch. The elderly mother is sometimes left alone with grandsons that are mentally disturbed, one of which is a heavy drug user, the other suffers from Schizophrenia. Something needs to be in place that would allow for in home reviews of elderly care at home when the caregiver isn’t qualified, is just a family member who wants, not needs, to earn the money that professional care would cost. I never realized that having built up a nice nest egg could actually do harm to a person if they can’t choose for themselves and an off spring decides for them more out of greed than anything else. Not that I would have that problem, I’m not wealthy, but I am an observer of this situation and I’m sure it’s more common than anyone would think. So I’ll never again assume that having high financial worth endures the best care.
You couldn’t be more right but I have another comment on that that I never would’ve reckoned on if not witnessing myself.
Sad how those who make the most see the smallest fraction taken from them to help the less fortunate as a burden.
I know a few local high income folks that see it as a burden because they are living above their means and don't want any money going to "those folks".
So do I, but we are not friends.
Social security and Medicare are paid by the taxpayer through their employment taxes. But they are paying for is insurance.. Yes we should make people pay your social security and Medicare based on their income up to 10 trillion dollars. Simple.
My guess is that a lot of the rich are making plans to move to habitats that will be least affected by global warming. (Considering that they will oppose using any significant spending to moderate the GW damage affecting the general population.) So they must conserve their wealth for their new estates in the temperate climate archipelago (TCA), wherever that may be.
Seem like Elon Musk want to spend the money to get to Mars. The hell with taxes and the hell with the rest of us.
I live in the last best place on earth, but I'm not disclosing the location.
No matter what anyone says, that's just the way it is.
Expand SS benefits like Sanders & Warren have been advocating for years.
In addition to your higher cap, there may be a need for an "alternative minimum" social security tax that recognizes carried interest, capital gains and dividends, and the taxpayer pays the higher of the higher cap on wages or similar cap on other income.
Wish Iknew more and understood more q out this. Sounds fair.
Simply tripling it to $480K would continue to give special treatment to the richest Americans as a percentage of their income. I agree with Professor Reich, "...eliminate the cap altogether on earnings in excess of, say, $400,000."
Here is the challenge - if you look at who is predominantly paying a higher percentage of income in taxes, it is those who fall right into that range. They are the 1% but are not the rich. Wealthy enough to tax heavily but not wealthy enough to have the kind of income that can escape taxes. The tax burden on this group causes them NOT to be progressive because they lose on either side - they pay any social program put into place and not the truly wealthy and they cannot avoid taxes the way that the truly wealthy can. The reality is that there has to be a break from 160 to 400K and THEN start taxing again. I am personally tired of being the one small segment that gets stuck with the bill all the time. My effective tax rate is twice that of someone truly wealthy - and your proposal wants to take more from me. Take it from Bezos. Or Musk. Or any of the people who can afford to spend silly money. I am not against paying taxes. I am against coming after the same group ALL of the time. Stop taxing my work.
fyi Karen, I make $32,000 a year and pay 25% of my income in taxes. reality.
Completely understand. It gets worse. The reality is that there is a group that pays under 15%, and it isn't you and me. You shouldn't pay 25% of your income in taxes; I shouldn't pay almost twice that when they're the people with extensive wealth are able to get out of paying anything. I am blessed to be a high earner, but chasing those who work is not the solution.
Karen, I think I understand your point; that politicians keep going to the same well each time for more tax revenue. I also wonder if the way we look at the tax base for SSI shouldn't change.
Currently, it seems based on the assumption that those who pay into it now will be the likely recipients later. With that, it only taxes from those who may collect in the future. However, it may be that widening the net of contributors, regardless of likelihood to collect is a better solution. Quite frankly, the rest of us gain tax burden from the targeted Federal bailouts to private companies, whose survival many of us won't see a direct benefit from. Since that precedent of unequal benefit from universal burden exists, then our wealthiest .1 and .01% should also be contributors to fund the dignified senior existence of those who aren't as wealthy.
Many working people fund 401ks for their own retirement, yet that self-funded pension doesn't exempt any of them from contributing to SSI for our fellow senior citizens. In order to continue, this country needs to act more like a community than a collection of individuals climbing over one another for advancement.
P.S. You shouldn't pay 25 or 50% without having universal healthcare. If we had UHI, I'd more calmly hand over 25%.
Read: "the econony expained in beer". It is not exact but you will get the drift. Jusy type it in and it willl come up.
I have already watched it and understand. It misses the point. The original point from the poster was that we should fix Social Security by raising the cap to those that earn 480K per year AND NOT BEYOND. My argument was that you merely collect a group that is already carrying a significantly high % of their income as taxable already in that group and MISS the group that is not paying an equal % of their wealth in taxes. If I earn 1M of income then I will pay $332,955 in federal taxes. If Social Security is raised to 480K then I would pay Social Security taxes on almost 50% of that income (so at a combined rate of 7.65% I would add another $36720 in taxes). If I earned the same 1M in carried interest (private equity for example), then I would be taxed as capital gains at 15% and pay $150,000 and no Social Security. Oh - and I am buying the beer :) I have almost $220K more with which to do it.
I hope Karen that soon we will change course.
Need to talk percentage’s of wages income paid in taxes dollars are distorting the impact.
J
That anyone would be my family, and yes, we notice it. We have a one income household because I've already worked 30 years and I have autoimmune issues. If you think that a family earning 200k in this environment is rich enough not to notice in the worst tax state in the nation think again.
That anyone would be my family, and yes, we notice it. We have a one income household because I've already worked 30 years and I have autoimmune issues. If you think that a family earning 200k in this environment is rich enough not to notice in the worst tax state in the nation think again.
That's genuine reform. The elites, even those who made a career being a critical elite among their elite peers, will not go that far. Funding, tenure, and being invited to the right club with the right people eating the right clothing bought at the right stores and coming to eat the right food and be part of the right social leadership, while politely disagreeing on how to get it right for we the right people, is at stake.
Why is there a CAP? The richest among Americans can afford the social security tax much more than the majority of the Americans making less than $160,000. 🤔
My assumption (not my opinion) is they felt those making over $160k would have their own retirement strategy and wouldn't need to rely on social security benefits, therefore they didn't need to be paying into the funding.
Like Robert said, they didn't anticipate wages would stagnate and that wealth would rapidly accumulate at the top. That's kind of funny considering who was president in 83, but hindsight is always 20/20.
Show me a wealthy person who doesnt take Social Securityvand Medicare benefits.
Yep, sure don’t see them lining up to turn in their Social Security or Medicare cards.
Michael, That’s where means testing could come into play & should be employed! Of course those who r required to help pay for a certain benefit would cry foul if they were not allowed to accept that benefit even if they don’t realistically NEED IT! They use it to pay for their vacation home & Mercedes! That should be a crime to pay a millionaire a SS check or cover their healthcare with Medicare, even if it’s only the max pmt!
Social Security was framed as a compulsory insurance program. If there's a cap on benefits, it would seem reasonable there would be a cap on the premium. Since its founding, benefits have been awarded to people who didn't pay into the program making it a partial welfare system, but the cap remains to sustain the myth of it being an insurance program. Actually, it's just the raw power of the rich that sustains the cap. The rest is just their cover story.
Actually it's social insurance. People who receive benefits do so under someone's earnings record. May be a spouse, a parent, but someone had to pay to create a "primary insurance amount" (PIA) based on at least 10 years.
SSI (supplemental security income) funds do not come from SSA trust funds, rather from the general funds of the US.
Really. Tell me more of your 💡.
Of course the 160,000 is based on 1960 income. A totally invalid number today. As an example my parents in1964 purchased an eight unit apartment building for $64,000. Today it sells for over a million. Things have changed quite a bit. I think $160,000 should now be 2 million at the very least.
Exactly!!!! Why is there a cap?!
Truely! If a waitress making 12k per year can afford to have all of her earning subjected to FICA, then an executive making 12k per hour can afford to have all of his earnings subjected to FICA as well.
Agree 100%. It just doesn’t make sense to me to cap it at such a low figure! By contrast, it should START after a reasonable amount of income…like a living wage, which wait staff never makes!
Yes! That 7.35% would go a long way in the pocketbook of a waitress. And, it would help small businesses by postponing the 901s.
Once Upon A Time, Big Business and the Very Wealthy used to pay a 91% tax rate (1961) -- and surprisingly, they didn't cry and carry on like they do now when anyone even suggests raising their rate above the 37% rate (before taking advantage of umpteen tax loopholes) by even a fraction of 1%. And what a shocker: their pawns in Congress kept lowering the top tax rate and the National Debt kept growing by leaps and bounds at the same time. Can anyone here say, "Cause & Effect"?
You are spot on in your assessment. And "Pawns in Congress" is a very apt description.
I remember the corporate attitude from the 1950s, 1960s, and early 1970s. Not only did corporations NOT "cry and carry on like they do now" about a much higher tax rate, they appreciated their employees. They provided a living wage and benefits and that was without employees having to unionize. And now their corporate greed financially forces employees to attempt to unionize, employees who make the corporation function, who are the heart of the corporation and they have to fight for living wages and benefits!
It is reprehensible how employees are struggling much like employees struggled for fair wages, benefits, and better working conditions 100+ years ago. Are elected pols any help? Nope! The majority on both sides of the political divide in Congress are responsible for this slow teardown of American workers' wages, benefits and working conditions. And on the state level, Iowa's Senate voted in favor of legislation to undo 100+ years of child labor laws. I have no doubt their Republican-controlled House also will pass the legislation; furthermore, I have no doubt Iowa's Republican governor will sign the legislations into law. And I have no doubt that other "Red" states will soon follow suit. I can only hope the US Dept. of Labor can step in and challenge Iowa's legislation to SCOTUS if necessary...although given recent actions by the Supremes, I don't have much hope of SCOTUS ruling against "states' rights" in this matter.
I know I am immensely cynical of expecting improvement in workers' wages & benefits, but I've personally witnessed the slow teardown of workers' rights & decreases in wages and I see no hope for the immediate future.
My mother is 85 & still has my father’s benefits from his career in the elevator industry, even though he died at 47 in 1983. Full medical, 2 dental check up & cleanings a year, yearly eye exam & glasses- all covered, & most rx’s max at a $10 copay. She fell several months ago & spent over a week in the hospital, never saw a bill or paid a dime out of pocket. What’s infuriating is knowing we can do a helluva lot better because I’ve seen & lived it, while my experiences & that of most post-boomers couldn’t possibly be more different. Every time I see someone running a GoFundMe to help a friend who needs medical care or even to bury a family member, all I can think is how badly greed has hurt & warped our country
Failure to uphold our BEST ( laws, societal programs , character) breeds cynicism. Simple truth!
That is very true and the greedy millionaires and billionaires didn't exist anywhere close to the level we have today. We had sane corporations, business owners and people at that time. Everyone was working to fullfil the American dream. Today we have the likes of Elon Musk who dreams of escaping to Mars.
One difference between 1961 and now is that most business leaders and adult citizens had experienced the Depression. There certainly were those out there even then who hated the New Deal and Social Security (can you say "John Birch Society" boys and girls), but they were a tiny minority and the majority wanted to do whatever they could to prevent anything like what they experienced. That was my parents' generation and before. My generation grew up in the post-war prosperity of the 50s. We heard our parents stories, but had no first hand experience. Then in 1966 the haters found their champion in Ronald Reagan and we know what has happened since. As fewer and fewer remembered why we had social welfare, regulations and unions, the government was hollowed out and corporations raced as fast as they could to promote an economy of inequality. As one of the last vestiges of the New Deal, Social Security will always be the prime target of the Republicans. The rest of us need to keep our eyes wide open and be vigilant.
Thank you Robert Kelly for reviewing our history since 1929 to the present. You have been able to zero in on the belief system that existed shortly after the depression. It's that belief system that's missing in action today. You have pointed out that the experience that our parents suffered during the depression was a marker that people believed should never be repeated. That experience needs to be make real for people today. I, like you, grew up with those values. It is hard to convince young people today that the tax rate in 1961 was 91%, and although people grumbled they never thought we'd bring it down to 37%. Reagan made it possible. We need to find ways to impress on the current generation that the values our parents held are necessary to restore our democracy today. We need Biden to emulate FDR! The New Deal should be resurrected. Democrats have to take the fight to the MAGAT'S!
Eadie,I believe he has tried but once the House Repubs took over, things have stopped & become more difficult to pass! If only we could kick them out of power as well as Sinema & Manchin & hold onto the Senate & Presidency in ‘24, then Biden’s promises could be fulfilled! We have to get out the Vote of all Dems & Independents to make it happen! We absolutely cannot allow a bunch of fascist authoritarians to gain control of this country & our Democracy! That would surely give cause for another civil war & nobody wants that!
Given the mechanics of Congress, to _actually_ get things done requires 1) a majority in the House, 2) a SUPERmajority in the Senate [so the minority can't filibuster items into insignificance), and 3) a President of the same Party as the majorities in the two Houses. Even then, because of the Conservative supermajority in SCOTUS (6-3 split), Republicans can (and most likely will) contest anything passed in Congress that the GOP had failed to block and kick it to SCOTUS where those 6 Republican appointees will most likely declare the contested item to be "unconstitutional" according to their Originalist interpretation of the Constitution.
Thank you Robert! Absolute truth. How hard it is to tell it..... why?
I remember 1961 and looking at pictures of homeless people in Calcutta. There weren't any in LA. That was before Reagan, of course.
Well yes but Reagan actually did the Republican Party a great favor. He made sure that a lot of the crazy people got out of the institutions. They are our Republican congressman and senators today. /S
I realize you are using cynicism to criticize our Congress critters but that action by Reagan was no joke at the time.
My wife was attacked by a man freshly released for a mental institution in Illinois while she was jogging on a trail in a city park. A sad day in our lives for sure.
Few realize what Reagan started. I was teaching in California when he became governor. What a fiasco!!
😎
That’s because no one actually paid that 91%. Our tax code had thousands of exemptions, and individuals structured their income using things like family trusts to avoid the tax. The 1985 tax reform act eliminated thousands of special tax breaks, lowered tax rates, and yet federal tax revenue went up, and the tax burden shifted upward, to wealthier taxpayers.
Ahhh, but I am certain that back when the top rate was 91%, even with tax loopholes available and exploited, that after deductions, they were still paying a HELLUVA LOT MORE than 37%. (Keeping in mind that now, with 37% being listed as the top rate, most of them are most definitely exploiting current loopholes to pay significantly less than 37%. Many pay NOTHING AT ALL: https://itep.org/55-profitable-corporations-zero-corporate-tax/
The article you link to confuses- or chooses to ignore- the difference between gross and net income.
You’re wrong about tax collected during times of high statutory rates. Rather than guessing, look up the numbers. They’re available on the Fed’s web site. Even as rates rise and fall, the government collects roughly 15% of GDP. As statutory and effective rates change, so do patterns of investment.
Wealthy people and large companies can structure their income to minimize tax. Ordinary people can’t. That why tax increases hit the middle class hardest.
Exactly!
I am retired from working at SSA and totally agree that the funding solution lies in greatly raising (or eliminating) the payroll tax (FICA) cap over a certain amount, such as the $400,000 you suggest.
I agree and I also agree with Robert that part of the problem was that wages haven't kept up, but also note that the main problem was that the baby boomers overwhelmed the system, and by 2034 the population rate will return to more normal levels, as baby boomers pass on.
I was an administrative law judge for over 10 years at SSA, before I worked at DOL. I also was a member of the American Bar Association task force that looked into solvency years ago. At that time, I offered some other solutions. One was that SSA retirement should be endowed. SSA retirement has been a boon to the country, reduced old age poverty and with the inclusion of the disability program, aids workers and their families, giving the average family an insurance policy worth on average a million dollars.
SSA is an investment. Most of us receive far more than our contributions. One way to reduce the rate of the threat of default is to reduce the rate of increase. SSA is also a charity. https://www.ssa.gov/agency/donations.html
Attached is an article I wrote more than 10 years ago. https://www.americanbar.org/groups/senior_lawyers/publications/voice_of_experience/2011/winter/social-security-maybe-charity-should-begin-at-home/
I will side with Robert here. The Boomer surge on SS was anticipated. The thing no one expected was the poverty of the formerly middle class.
Greenspan, Dole et al were told. Raised the rate from 4.2 to 6.2%. Another half percent would have eliminated the problem. Called it a "short-term financing problem." https://www.ssa.gov/history/greenspn.html
Alarms began almost as soon as the "fix" went into effect. Also failed to predict that so many people would choose early retirement.
Changes in population trends. What we didn't know in 1983 about stuff like birth rates and immigration.
https://www.ssa.gov/policy/docs/ssb/v66n4/v66n4p37.html
The rest of it is that after 2034, the rate of claims against the trust funds begin to decline as population begins to stabilize. One reason I came up with my charity proposal is that small donations could extend the risk of insolvency beyond 2034, when the rates begin to decrease.
Interesting article, thanks. I had no idea that SS could accept charity. But it's a bit off-putting to contemplate the government use of the equivalent of a GoFundMe.
It took years to get them to put up the web site.
Although a couple of ex-commissioner thanked me for activism, SSA does not advertise it. Pretty sure the Republican administrations were interested in privatization and did not want the funds to succeed. I asked the Biden administration to advertise bur so far...crickets.
I could not get the government to include it in their annual charity giving programs.
I think the people that can actually ensure that Social Security benefits survive don’t really care about making sure that happens because they will always have the money to survive.
For the rest of us, they simply don’t care.
Predators (like GWB) wanted to steal the trust funds for investment .
They want the funds to default. Once upon a time, I wrote about the disability trust fund, then under attack by the Tea Party. https://digitalcommons.pepperdine.edu/naalj/vol36/iss1/4/
Josh Marshall deserves huge credit for using early Talking Points Memo to go to war quite effectively against GWB's plan to turn Social Security over to Wall Street.
I absolutely agree there should be no cap. The top 1% have never paid their fair share yet they have gobbled up the benefits of our "booming" economy while the 99% are drowning, particularly since the pandemic. No cap = No problem!
“Put simply, a big part of the American working population is earning less than the Social Security trustees (including me) anticipated decades ago — and therefore paying less in Social Security payroll tax.”
It’d be easier politically to raise the cap if we’d stop calling it what is ISN’T: a tax.
Taxes are collected by governments which then use them to fund other things, from powering streetlights to operating a military. But the money collected by the Social Security Administration is directed toward an entirely different purpose: RETURNING IT to the people who paid into it — every. Single. Penny. of it, and more, if the payer lives past 77 years old.
The great British economist John Maynard Keynes, on whose work most reputable economic theory is based, once wrote that “expenditures rise to meet income,” meaning that, left to his or her own devices, the average salaried individual will spend everything he or she earns — and often more, which is why and how people get into debt.
Republicans love to call Social Security and Medicare “entitlements,” making it seem as though the government is giving a gift to recipients. Unfortunately, Democrats and the press don’t dispute that characterization, which they should, stridently. The fact is that the two programs are nothing but DEFERRED SALARY, guaranteeing that when people retire and their earning days are over, they won’t be left with nothing. That’s how Franklin Roosevelt and a Democratic Congress conceived Social Security in the mid-1930s, and Lyndon Johnson and a Democratic Congress conceived of Medicare in the mid-1960s (granted, if someone pays into them all his or her working life and then drops dead the days he or she turns 65, it’s a bad deal, but fewer and fewer people die at that age. Most people do end up collecting more than they paid in).
Irrespective of the individual issue, all politics is ultimately about one thing, and one thing only: money. This issue IS actually about money, and so, for once, should not be about politics.
Wether or not Social Security brings a net benefit depends on life expectancy. As we know life expectancy for women is significantly higher for women than for men. Also life expectancy for Asians is very high. For Blacks the real rate of return is negative.
NOT just a retirement program. Provides insurance for widow(ers), orphans, etc.
It used to help fund an orphan's college education too but
Ronnie and the boys eliminated that benefit to "balance the budget".
Unfortunately, my daughter and I know this from first hand experience.
Yes it is turning more and more into a welfare program and that is the real danger. It will lose the support of young people who see a negative return. Mark my word, that is the greatest danger to the program.
Since Reagan, the vultures who want control of the trillions in the trust funds have been waging generational warfare. When I was young, I was told there would be nothing left.
Were wrong then and only suckers believed them.
Some people avoided paying into the system....saved money on taxes....in the end are net losers. Low earnings record = low benefits.
Wasn't a huge amount borrowed by the government years ago? We shouldn't have to suffer as a result. I am disabled and worked for a living before an accident happened. I live on less than $900/mo now and it's not living at all, barely surviving. I'm only 58 and am scared about my future. There should be no cap. If you earn it, pay it.
Daniel Moynihan outlined much of that in 'Came the Revolution.' Though, I think 'borrowed' might be a bit generous. 'Stole' might be more accurate. The Reagan Administration played fast and loose with the Social Security funds.
You are not alone. We are all whistling past the graveyard now. Anyone could have an accident. We all share your fear. I hope something changes for all our sakes.
Bernie showed us the way. Many of us believed & supported him, but the political, media & corporate powers that be wouldn't have it.
Me too.
Yes there was a large amount borrowed. Reagan and Greenspan raided social security and left IOUs in the place of the money that was in there. I don't know if the government ever repaid that money gouged by Reagan. He claimed he would not raise taxes again so he raided the ss. Daniel Solomon would you care to enlighten us please.
Income equality certainly plays a role in sustainable base level funding.
Moving forward we may want to look at Switzerland, which has a model fairly similar to the U.S. system.
- No cap on contributions but a decreasing rate for high earners.
- No contributions required by VERY low earners.
- Eqivalent of social security is seen as part of a three pillars model - Social security, private savings, and employment- or self-employment-based plans.
Changing demographics are a given in any society and any pension plan must be routinely adapted to meet the new challenges.
The “pillars” of the retirement system you mention is the very model of the Federal Employment Retirement System, FERS, that followed from the demise of the Civil Service Retirement System, CSRS, in 1986 or thereabouts when I transferred from TVA. The immediate effect of that was that the baseline “pension” of CSRS was cut in half. Social Security was explicitly designated as the offsetting component.
The personal savings aspect is the Thrift Savings Plan, TSP, for which the securities started as govt bonds. In a short time “mutual” funds were introduced which brought market-based returns and risks (think 9/11 and the “Great Recession”). A late development were the “years” funds varying risk as the age approached the designated year.
This appeared to be a reasonable approach since by instituting FERS. We were told to think in terms of about a third of the support to the total retirement achievable. And it appeared to be working.
As Robert points out, maintaining Social Security to service foreseen future needs has been ignored in Congress. So, that pillar is self-deteriorating but COULD be ameliorated.
As Robert also describes, the successful consistent suppression of cost-of-living raises in federal salaries along with the deficit between what federal employees are paid and what contractors cost the government has significantly reduced employees’s input to both the “pension” component and the personal savings component.
To contend with budget challenges, successive Republicant administrations shaved the TSP returns on the govt bonds, the largest “pot” of employees’ contributions below the prevailing market rates until TFG got that below 1/2 percent.
I don’t offer this simply as a whine. It can be a successful approach. But if you build it with what proves to be unhardened clay on sand foundations, it will erode from neglect and intentional assault.
BTW, military retirement is also being shifted into the same structure. I know that the TSP has been opened to active duty military which leads me to infer that the traditional “pension” component of military retirement is also taking hits similar to those that sank CSRS.
The underlying issues with "defined benefit" models is that we are not as good at predicting the future as we thought. Simply moving to defined contribution is not enough, as you mention.
Meaningfully engaging in a three pillars model does require sufficient income to save for the future. The current shameful minimum wage and ACA provisions that encourage part-time work need to go. A living wage is not an "entitlement" and healthcare should be available universally.
Switzerland has quite a few protections in its program that I did not mention. The types of investments allowed in the "Third Pillar" private accounts are very limited and risk moderated. There is also a statutory minimum return for uninvested deposit accounts, which the banks totally hate because the rate of return is more than paid on their savings accounts.
Company pension funds are also restricted in the types of investments. By and large the investments of the pension funds are in government bonds or income producing real estate such as apartment blocks. The preference towards income-producing real estate is used as a means to deal with the high cost of apartments. (BTW rent is also controlled!). Sure beats having private equity groups gobble up dwellings so that they can "extract" value.
Very thoughtful
The present day Social Security System is experiencing solvency issues because past presidents used the sleeping funds as an endless source of free money. Ronald Reagan and George Bush "illegally" withdrew funds from the people's retirement accounts to the tune of 3 trillion dollars during their terms as President. Their proposed federal budgets would never have been approved if they had asked congress for the monies they actually intended to spend so they dummied their proposed budgets and then as they needed more and more money they just wrote checks and withdrew the funds from the Social Security System. With each massive withdrawal they weakened a system put in place to help retiring Americans. I asked the head of the Republican party in Texas about this illegal pilfering, her answer was chilling. She calmly said "they weren't the only ones that did it." Our past presidents stole the very money we put away to help us through the years when we would be too old to work. It seems our security had no future. You may not believe what I just told you, but I saw copies of the forms used to take our money from the fund. They were obtained through the "Freedom of Information Act" and anyone can get copies if they are still available. The illegal withdrawal of our money by our own Presidents is why the present day Social Security System is in such a depleted condition. A sad testament to the very government we trusted with our future.
I took a Poly-sci class from a professor who had a doctorate degree in political science. On the first day of class he dropped the proposed book for the course in the waste basket and he told us we were going to learn what our government didn't want us to know.
Oh, that sounds intriguing!
I noticed a couple of others on this blog who mentioned this, also. I remember when this issue of various sources pilfering our SS money was being talked about, but then was dropped and seemingly forgotten. I wish Prof. Reich had gone into this subject as one of the reasons for our “short fall” in the fund.
I also believe our tax money of this most prosperous country is also a slush fund for a lot of things we aren’t privy to. I understand that taxes aren’t necessarily used in ways that 100% of the population would decidedly want, but it should at least be for the good of the people as a whole.
Greed knows no boundaries and has no scruples. And con artists are in many shapes and forms.
G.P.--The main one has orange hair and is rather thick in the middle.
I'm sure it went to new heights in the corrupt Trump administration, but it was certainly prominent in the Reagan & Bush administrations & present in the Clinton & probably Obama presidencies.
Presidents withdraw this money? I thought Congress had the power of the purse.
Cheerio--What happens under the table goes unseen.
I too have heard this and wish Mr. Reich had included info about it in the article. I also get so frustrated when politicians talk as though the only solution is to raise the retirement age as though raising the cap is not even in the realm of their imagination. And the media mostly repeats the same thing.
The corporate & right-wing media are complicit in this corruption & erosion of our democracy.
Stacy-- If the government that made the withdrawals would simply repay the owed monies all would be well again.
The "crisis" of Social Security is that the Boomer's retirement means that the Trust Fund is to be used for its stated purpose of paying benefits not for low cost loans to fund borrowing by the Federal Government. Quite amazing that this never comes out!
Oh, I believe it! I heard about it as it was going on. Reprehensible & never should've been allowed. But Presidents apparently have the ability to steal funds whenever they need them & from whatever source they choose in our kleptocracy.
Social Security taxes should be on all income, even for the very rich, so people will have a stake in it when they need it. That should include capital gains and all the income that usually slips through loopholes for the very rich. It's about time they contribute fully to our nation's program to support disabled and older people. And, members of Congress and all federal officials should be on Social Security and Medicare too, no special medical and retirement programs that will keep them from experiencing Social Security and the Medicare challenges, like everyone else in this country who has retired.
How about also eliminating the double taxation of benefits?
Contributors pay income taxes on the contributions and, since Reagan, beneficiaries have been taxed on the benefits.
The Alliance of Retired Americans (ARA) has also been advocating for eliminating this CAP among other things for retirees. Like me, become a member with no dues if a union retiree while all others are asked to donate what they can afford. Google to find a local ARA chapter or contact your union rep.
I am a retired firefighter-paramedic with a pension and a small SS benefit. I find ARA is more helpful and active with this than AARP.
I constantly receive AARP junk mail and to me, it just seems to be a massive market campaign for life insurance and senior discount club.
I left AARP when I noticed they bemoaned certain policies, but consistently refused to place blame. Example: saying "Congress" rather than "Republicans in Congress" . This muddles who is doing what, so that a party that voted as a block against a popular bill still gets credit for the good it does. AARP also never mentioned obscenely huge military slice of government spending pie.
I was an AARP life member, but resigned when they championed so-called “Managed Care” (more accurately Managed Cost or Mangled Care) and sponsored such deceptive plans. I called them and asked what portion of their income came from that and they refused to say. While they do some positive things, I will never trust them.
AARP has plenty of company in selling the Medicare Dis-Advantage scam. Many state employees' pension funds also market the program. Seems to be a flagrant breach of fiduciary duty by those plans!
Assuming you still have American democracy in 2024, I imagine that you would need a majority of Democrats in both houses to push through such a reform as it would mean taxing he wealthy - but the same applies to gun control, ending gerrymandering, and putting human rights, civil liberties and public accountability on a firmer footing.
So good luck with all of that!
And no Manchins, Sinemas & Testers who often switch to the Republican side, which will be extremely challenging for the Senate race, where most seats up for grabs are held by Democrats.
Republicans (all) are a cancer on the nation and a clear threat to our democracy, politics & govt function, economy & middle class, common sense & decency, public health & safety, the planet, and truth. There's not a single thing they lobby for that doesn't harm 99% of us. There's not a single beneficial law/proposal from Dems that they don't fight tooth & nail against. I wish it weren't so ... but they're dangerous & fascistic and we can't fix it if we don't call it out.
I have to say, not overstated!
It troubles me that not many people know about the SS tax cap. Why is it that we are so dumb and keep supporting these people that are actively harming us?
JJ Young ; It may have to do with the fact that nothing is taught in school about Social Security, much less the SS tax cap. Not much about economics is taught, much less financial literacy. It's like banning books that teach about sexuality and 'the facts of life', and then wondering why so many young women had unplanned pregnancies. So many young couples 'had' to get married; even today that happens. When one considers that it is almost impossible to live alone financially, ,most are economically forced to have a partner in order to afford housing and other costs of living. Meanwhile, we have a growing number of billionaires, who have so much money they can buy government and cause 'mischief'.
As usual, your commentary is spot on I wish I could make every American read this morning's remarks.