r/neoliberal • u/zqbv feminist boyboss đŻđŻ • 3d ago
President Biden Should Veto the Social Security Fairness Act Effortpost
Hello, and Happy New Year to everyone in this great, neoliberal community. Bless the shareholders and the fractional reserve banking system <3
This is my first "true" effortpost. I am not an academic or credentialed expert, just a mere political hobbyist and a human driven by curiosity. As such, please take my argument with a healthy dose of skepticism...but also an open mind :) I promise to return the favor!
Biden is expected to the pass the Social Security Fairness Act before his presidency is over, after the Senate passed the bipartisan reform in a 76-20 vote and the House passed it 327-75. I make the argument that Biden should break ranks with Congress and veto the bill once it appears on his desk.
Some Background
1.1 Expenses
For our international audience, I will provide a very brief review of how social security is structured. As you may already know, the purpose of social security is to provide a supplementary revenue stream to retired Americans, their dependents and survivors. As of 2023, the SSA has provided economic aid to over 67 million Americans, covering 20% of the population. In dollar terms, $1.38 trillion in benefits was given out for that year. If we exclude disability insurance (DI) and only look at old-age and survivors insurance (OASI), that figure is only reduced to $1.28 trillion. For the sake of simplicity, I'm going to lump both OASI and DI together, but understand that the same conclusions ought to stand even if DI figures were subtracted.
Sounds like big numbers! But is that actually a lot for Uncle Sam? Well, I'll present you the data.
Sticking to 2023, the U.S. spent $6.1 trillion in total outlays. (Note that this figure combines both mandatory and discretionary spending.) So around 21% of annual spending goes to the retired, disabled, and their loved ones, which makes Social Security America's most expensive program. For additional context, the same source tells us Medicare (the second-most expensive program, which also benefits the old/retired) was at $839 billion. If we combine the two, then that means 35% of our spending directly benefits the elderly. This is why so many people freak out about the "old-age demographic crisis" -- taking care of our fellow retired citizens is expensive!
(What about foreign aid, some may ask? According to the Brookings Institute, foreign aid spending was at a mere 1% with $63 billion in 2023.)
1.2 Revenue
OK. It's pricey, but we can't just let old people die. We need to make sure we have a way of paying for this! And indeed, that's what FICA/payroll taxes are for. It is important to note that the existing working population pays for the existing retired population -- there is no account with your name on it. This is a very, VERY common misconception but it is utterly wrong.
The money you pay in taxes isnât held in a personal account for you to use when you get benefits. We use your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.
You should also note that payroll taxes aren't the only revenue stream. Interest from asset holdings and taxes on payouts also play a modest role as well, but the bulk of income (>90%) is from payroll taxes. Source.
Now, we can start digging into the numbers!
1.3 Solvency
Income from payroll taxesâAn estimated 182.8 million people paid Social Security payroll taxes in 2023, and 186.7 million people paid Medicare payroll taxes. Income from payroll taxes accounted for approximately 90 percent, 97 percent, and 88 percent of OASI, DI, and HI total income, respectively.
and, more importantly,
In 2023, the OASI Trust Fundâs cost of $1,237.3 billion exceeded income by $70.4 billion. In contrast, the DI Trust Fundâs income of $183.8 billion exceeded cost by $29.0 billion. Combining the experience of the two separate funds, Social Securityâs cost exceeded income by $41.4 billion.
And this is the problem. Starting in 2021, social security payments began to exceed revenue, and it is projected that this gap will widen. Since social security was profitable the prior 40 years, there is currently a trust fund which makes up the difference.
But that trust fund isn't infinite. According to the SSA's annual trustees report, if there is no course correction, there has to be a benefits cut in 2035, with 83% of benefits payable.
So what does this mean? If you're austerity-minded, you will say we should consider cuts now to even out the costs and minimize harm on in the aggregate across both today's retired Americans and the retired Americans of the future. If you're less austerity-minded, you may advocate to raise more revenue through some sort of change in the tax code.
Both make sense.
But one thing which should be obvious is that we shouldn't needlessly double-down in our current, unsustainable trajectory.
The Social Security Fairness Act (SSFA)
So what does the SSFA do?
Decades in the making, the bill would repeal two federal policies â the Windfall Elimination Provision and the Government Pension Offset â that currently limit Social Security payouts for roughly 2.8 million people, according to reports from the Congressional Research Service.
The policies broadly reduce payments to two groups of Social Security recipients: people who also receive a pension from a job that is not covered by Social Security and surviving spouses of Social Security recipients who receive a government pension of their own.
People who worked in state, local and federal government jobs have been heavily affected by the policies, as have teachers, firefighters and police officers, according to lawmakers and advocates.
Both provisions would be repealed by the bill, thereby increasing Social Security payments for many.
There are two "angles of attack" here, and I will pursue both.
2.1 Fairness
I'm going to start by addressing fairness.
The Windfall Elimination Provision (WEP) applies to workers whose employers did not withhold taxes for SS payments.
Indeed, from our friends at the SSA:
The Windfall Elimination Provision (WEP) can affect how Social Security calculates your retirement or disability benefit. If you work for an employer who doesnât withhold Social Security taxes from your salary, any retirement or disability pension you get from that work can reduce your Social Security benefits. Such an employer may be a government agency or an employer in another country.
If you receive a retirement or disability pension from a federal, state, or local government based on your own work for which you didnât pay Social Security taxes, your Social Security benefits may be reduced. You may not receive any payment at all.
"Wait a minute! You pointed out earlier that social security isn't structured like a 401k or IRA retirement plan! Just because they didn't pay SS taxes doesn't mean they should be denied SS payments! Our moral obligation to the elderly isn't a function of how they treated their elderly back in the day!" - the smart reader who has been paying attention
In principle, this is a fair objection. However, I am actually going to emulate my lovely Rawlsian friends and retort with their standard social contract theory predicated on fairness.
Claim: To the extent the state can legitimately do so, it has an obligation to ensure one's quality of life and wellbeing is not a function of whatever generational cohort they were born in.
I will posit that any liberal who is approaching in good faith will find the above claim reasonable. By playing favorites and allowing existing retirees to disproportionately benefit relative to future retirees (tradeoff between benefits payments now vs in the future), we are in effect acting as a gerontocracy. Like any other societal structure where one class benefits at the expense of another -- and the class division is based on some sort of immutable, inherent characteristic -- this would be illiberal.
Pedantic? Yeah, it is. But even "little" things like this matters if we are serious in creating an open society.
2.2 Impact on Solvency
We will close by taking a look at the material impact. Maybe I'm just making a mountain out of an anthill!
We will use figures from the CBO. Looking at this PDF, we see that the CBO estimates a $196 billion increase in outlays as we go up to 2034. This figure does not include the cost of servicing debt -- AKA interest. If we go with estimates from the National Taxpayers Union, which include this additional cost, the figure balloons to $233 billion. But a quick google search indicates this may be a biased source. I'll be very generous and just say $200 billion to make the numbers easy.
That averages out to an additional $20 billion extra in spending every year for the next ten years. Or, if we stick to the $6.1 trillion for total U.S. government expenditure in 2023, we can say it's only a 0.3% increase. Not a lot of impact on the margin for federal spending.
But remember, the money comes from the trust funds. Consider this letter from the CBO to Senator Grassley, discussing the potential impact of the SSFA on the OASI and DI trust funds:
If H.R. 82 was enacted, the balance of the OASI trust fund would, CBO projects, be exhausted roughly half a year earlier than it would be under current law. (The agency estimates that under current law, the balance of the OASI trust fund would be exhausted during fiscal year 2033.)
So six months of (partial) lost income for our future retired Americans to pay even more money to our existing retirees -- despite the fact that they themselves didn't have to pay as much in taxes back when they were working.
Taking a step back, this one adjustment alone isn't going to be the straw that breaks any camel's back. But death by a thousand cuts is a real thing, and needless pieces of legislature like this contributes to it. The SSFA will not help our country in the long-run and it is a disservice to future generations.
President Biden should take advantage of the lame duck period and reject this bill.
Thank you for reading this whole thing! :) Constructive criticism is welcome and shall be taken in good faith.
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u/BudgetBen Ben Ritz, PPI 3d ago
Yes, Biden should (but probably won't) veto. Since you asked, here are two constructive criticisms for your (generally very good!) post - one argument that is right but for the wrong reasons, and one that I think is missing.
The correction (to argument 2.1): even if SSFA becomes law, people won't get Social Security benefits from jobs at which they paid no payroll taxes. The issue is how much benefit they get from the jobs at which they did pay payroll taxes. SS benefits are progressive, meaning people who earned less throughout their working lives get a greater benefit for each dollar they paid in payroll taxes. WEP/GPO are meant to prevent high-earning people who split their career between covered and uncovered employment from getting the same return as a low-earning person who spent their whole career in covered employment. It does so imperfectly, which is why we need a reform (rather than repeal) of WEP/GPO that ensures people with the same lifetime earnings get the same replacement rate. I wrote about what that would look like a few years ago here.
The missing argument: in addition to being bad substantively, this is a big political blunder. There is no shortage of Hill Dems who are pissed that Schumer blindsided everyone by bringing this up for a vote when he did. From a piece I published right after he announced it:
Yet even Democrats who dismiss their concerns and believe the Act is good policy should be wary about how it is likely to backfire politically. Benefits would start being increased during a time in which Republicans have control of the U.S. House, Senate, and presidency â meaning they are likely to get the political credit. This wouldnât be the first time voters credited one administration for its predecessorâs actions: a New York Times survey earlier this year found that roughly one in six voters blamed President Biden for the overturning of Roe v. Wade because it occurred during his presidency, even though the policy change was carried out by Supreme Court justices who had been appointed by Donald Trump.
Vetoing the bill would both give lawmakers a chance to address WEP/GPO in a truly fair way and leave the headache for a Republican government to deal with, since there is no way Thune is gonna bring SSFA for a vote.
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u/altafin 3d ago
Good post. I agree, this is bad legislation.
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u/NaiveChoiceMaker 3d ago
Biden will never go against the unions on this.
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u/ONETRILLIONAMERICANS Trans Pride 3d ago
I hate unions.
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3d ago
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u/SpaceSheperd To be a good human 3d ago
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u/ONETRILLIONAMERICANS Trans Pride 3d ago
Unions are rent-seekers. If you're worried about poverty, pass better welfare. If you're worried about workers' protections, pass better workplace safety legislation.
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u/RhetoricalMenace Resistance Lib 3d ago
Literally the only reason we have either of those things is because of the lobbying done by unions.
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u/mongoljungle 3d ago
in order to achieve any of those things you need leverage. Union is a strategy workers implement to elevate their bargaining position. Admittedly this strategy works best for employees of the government or vital infrastructure bottlenecks like rails and ports.
someone should come up with a better bargaining strategy, but until then unionization it is.
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u/neonliberal YIMBY 3d ago
Going to tell my paycheck to paycheck trans friend who just unionized her workplace that sheâs a rent-seeker then who should patiently wait for the government to increase welfare and worker protections, instead of depriving consumers and workplace owners of their rightful market price for labor.
The median user on this sub works much higher paying and much more comfortable jobs than the median American, and then wonders why anyone would unionize. Not every union or union member is as wealthy and corrupt as the Teamsters; most union members are more like my friend in terms of socioeconomic status.
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u/Snarfledarf George Soros 2d ago
You can be disadvantaged and also a rent seeker. I think we labelled this intersectionality a couple years back.
The problem is one of concentrated interests and diffuse harms. Add up enough small groups seeking rents, and you start to teeter towards a completely broken system.
Sure, this is not a meaningful solution to someone in your friend's position, but we have to make a concerted effort to address problems at the source instead of slapping on bandaid fixes from 12 different angles.
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u/Wareve 3d ago
The only people I know who get regular raises got that because they're in a union.
I know there are bad unions and some bad people in them, but calling them rent seekers when they're generally the front line advocates for the people they directly represent is pretty absurd.
They not only often work to support the people that would pass the legislation you talk about, but they also negotiate directly with the business owners, which is often nessessary when the government doesn't care or has been bought.
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u/ONETRILLIONAMERICANS Trans Pride 3d ago
I know there are bad unions and some bad people in them, but calling them rent seekers when they're generally the front line advocates for the people they directly represent is pretty absurd.
It's not absurd lol it's correct. They're literally rent-seekers. They're great for their members and bad for the public welfare due to their anti-competitive practices.
And there are civic organizations that advocate for workers' rights without collective bargaining. That's not what makes unions bad.
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u/kyajgevo 3d ago
Thatâs an absurd definition of rent seeking. In that case, anyone who asks for a raise is a rent seeker. Theyâre advocating for their own benefit while leaving fewer profits to go toward hiring more workers.
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u/ONETRILLIONAMERICANS Trans Pride 3d ago
In that case, anyone who asks for a raise is a rent seeker.
That's absolutely not what I said. Unions rent-seek by restricting the supply of labor and price-fixing wages. They also undermine the productive running of businesses by interfering with hiring and firing decisions. They also advocate against productivity increasing technology like the ILA is doing to port automation. And that's just what they do to businesses (and even then only some). They also pressure politicians to pass protectionist policies. In short, unions are basically defined by their commitment to anti-competitive practices. They are objectively rent-seekers trying to obtain more wages and benefits in return for their labor than they can get in a free market.
Unions don't just "advocate" for higher wages. If you ask your boss for a raise, that's not rent-seeking. If you ask your boss for a raise, and he says no, and you respond by getting your co-workers together and saying you'll all stop working unless you all get raises, that's rent-seeking because you don't like what your labor is worth on the free market. And that's just some of what unions do.
That's not even getting into public sector unions, which are even worse because they play both sides of the table by electing their negotiating partners.
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u/toms_face Hannah Arendt 2d ago
Also you're saying the wage the boss offers = market wage, while saying that wages resulting from industrial action = rent-seeking wage. The truth is closer to the opposite of that.
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u/actual_wookiee_AMA Milton Friedman 2d ago
Unions are the free market negotiating their compensation and conditions.
Legislation is not.
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u/Snarfledarf George Soros 2d ago
Aren't some of the bigger unions literally larger than the individual employers that they are negotiating against? How does that reflect a free market? You're simply inverting the monopoly/sony relationship.
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u/toms_face Hannah Arendt 2d ago
The union members of the specific workplace aren't bigger than the employer of that workplace though.
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u/toms_face Hannah Arendt 2d ago
It's not rent seeking, the employer has more power. It's reducing the rent-seeking of the employer.
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u/hucareshokiesrul Janet Yellen 3d ago edited 3d ago
Itâs not a retirement account, but the idea that itâs like a retirement account (âItâs not a handout, I paid into it for 40 years!â) is pretty fundamental to how people look at it, and probably why itâs as popular as it is. The idea that someone who did not pay into it (and is not poor enough to require government assistance) should get it anyway seems pretty strange.Â
My wife worked for a couple years as an educator in CT where she didnât have to pay into social security. And we didnât expect to get benefits for that time. We feel like that was just part of the deal. And we were fine with it because she had a good pension (which I think is why they were exempt) and social security is not that great of an ROI anyway once you hit a moderately high income. But weâll take the extra money I guess (assuming the people eventually covering the cost of this isnât us).
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u/AMagicalKittyCat YIMBY 3d ago edited 3d ago
Itâs not a retirement account, but the idea that itâs like a retirement account (âItâs not a handout, I paid into it for 40 years!â) is pretty fundamental to how people look at it, and probably why itâs as popular as it is.
While social security is not a retirement account, I don't think their view of the system is incorrect. Social security came about in the 30s, there are very few people alive today before then and nobody who would have been in/near retirement then. Even the most geriatric of Americans spent their life paying into this system for their elders being implicitly promised that they will have a turn once they are aged.
Now they are aged and they want their implicitly promised turn. The US government made a deal with its workers and it's understandable why those workers would be upset if the government refused to cover their social security.
There's no reason to be including the pensioners and other groups that didn't pay in, but the people who did? They held up their end of the bargain.
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u/Eric848448 NATO 3d ago
Yeah, which is why Iâm fine with this law.
The WEP reduces your SS payment for every dollar you get from a pension earned at a job that didnât pay into SS.
SS is already reduced for the years you didnât pay into it so I donât see why theyâd reduce it even further.
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u/Curious_Inside_8890 3d ago
I agree with the majority of this. However the scenario where someone works in the private sector for say 20 years and then transitions into teaching for there last 20 years. The pension they will receive from being a teacher in most states is very small. There is room for nuance for an adjusted benefit rather than an all or nothing.
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u/NATO_stan NATO 3d ago
I believe that the 20 years of private sector work would more than cover the required "credits" you have to earn to qualify for SS benefits. For example, I am almost 40 and have been full time employed for about 22 years now, entirely in the private sector. My ss.gov account statement indicates that I am fully eligible for benefits now based on the years I've worked and contributed.
While OP is correct that I do not have an "account" with a specific dollar amount attributed to it, it's not entirely accurate as that credit system tells me I am owed a certain amount monthly at this point.
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u/Healingjoe It's Klobberin' Time 3d ago edited 3d ago
I'm 31, working since 15, and my SS account says that I'm fully eligible already.
Not entirely sure how this system works.
ETA:
The amount of earnings it takes to earn a credit may change each year. In 2024, you earn 1 Social Security and Medicare credit for every $1,730 in covered earnings each year. You must earn $6,920 to get the maximum 4 credits for the year.
Ah, that makes sense. 40 credits are fairly obtainable in 10 years at full time employment.
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u/yes_thats_me_again The land belongs to all men 2d ago
Am I reading this wrong, or are 40 credits basically guaranteed within 10 years for a working person
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u/Healingjoe It's Klobberin' Time 2d ago
Pretty much how I see it, yeah.
But credits don't determine how much you'll be paid out. So it's advantageous to work longer for higher and higher salaries.
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u/Eric848448 NATO 3d ago
The payment is based on your highest 30 years of earnings. And if you only paid into SS for 20 years, ten years of zero will be included in that average.
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u/thanatos31 Norman Borlaug 3d ago
Highest 35 years. Due to the bend points the zeros will have less impact, though. Once you clear esp the second bend point the marginal benefit increase from additional years worked falls off even if you're not at 35 total yet. Various FIRE resources have details and worked examples.
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u/0WatcherintheWater0 NATO 3d ago
If youâre not paying into SS with those 10 years of income, you now have 10 extra years of social security payments which you can use for your individual retirement or more likely, are already being contributed to a pension.
It being a zero makes sense.
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u/Eric848448 NATO 3d ago
If you work for 20 paying SS then work for another 20 not paying SS, your SS payment is already reduced by not paying into it for those last 20 years.
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u/SheHerDeepState Baruch Spinoza 3d ago edited 3d ago
The elderly have it too good.
Edit: Macron (PBUH) was right. We need to raise the retirement age.
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u/Lambchops_Legion Eternally Aspiring Diplomat 3d ago
Macron has always been right, and we punished him for it
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u/nick1453 Janet Yellen 3d ago
I might be confused but isnât the OPs interpretation of this law wrong?
My understanding is that:
Under current law, if you receive a public pension and worked a different job that paid into SS, your SS benefits are reduced.
This law changes it so that the public pension doesnât affect your SS benefits that you earned based on paying SS taxes. That does seem more fair that what it was before. Currently there are bad edge cases where a widow/widower has their income severely reduced when their spouse dies because of this.
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u/Shifter357 1d ago
SS returns rate is based off your life time income
And gives a MUCH higher percentage of money to low income earners, the main goal being reducing absolute poverty
Person A averages 1k a month for life paying into SS
Person A get 90% of that back $900 a month SS check on retirement
Person B averages 10k a month for life paying into SS
Person B get %40 back because they did ok and should have savings. So only 4k a month SS check
Person C also made 10k a month for life But 9k of that was âoff the booksâ never reported to SS
Donât pay SS fica tax, SS has no reported income for youâŚthis has been fixed though
SS looks at person C like a low income earner and gives them a %90 return on there 1k income
WEP was introduced to change their rate of return back to %40
So they only get $400, but that is offset by a pension that was funded by not paying FICA SS taxes
And their reduction in SS can not be lower then half their pension
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u/Albatross-Helpful NATO 3d ago
My other question, what was the motivation for exempting public worker salaries in the first place? Why give them a carve out, only to cave into their demands for payment later?
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u/AMagicalKittyCat YIMBY 3d ago
So what does this mean? If you're austerity-minded, you will say we should consider cuts now to even out the costs and minimize harm on in the aggregate across both today's retired Americans and the retired Americans of the future. If you're less austerity-minded, you may advocate to raise more revenue through some sort of change in the tax code.
Both make sense.
Third option is to ignore it and just accept the cuts when they happen. Of course, this is just as politically unpopular as cutting at any point before but for current politicians there is little harm to delaying since they might not even be in power then.
Why address it now while you're in power when that SS cutting bomb could always go off when the other party is in charge and they take all the blame?
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u/theg00dfight 3d ago
Letâs be honest here folks: Trump and his team are gonna try to gut SS and Medicare in the next admin anyway. Let them be the bad guys and piss off the seniors. Biden will reap nothing but pissed off feelings if he vetoes this bill with broad bipartisan support when the next admin is gonna be a bull in the china shop anyway.
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u/sponsoredcommenter 3d ago
Neither party will gut SS, ever. They will sooner bankrupt the treasury than stop SS payments to seniors. This is not hyperbole.
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u/FearlessPark4588 Gay Pride 2d ago
I'm kind of surprised we have anyone politically non-astute commenting here to suggest that SS would actually be cut. I know it's apart of Trump's rhetoric but my god you'd at least need Congress to go along with it too. Which won't happen.
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u/Aleriya Transmasculine Pride 2d ago
The Republican Study Committee is proposing cuts and a raised retirement age, but it would phase in for younger people, not current retirees. The current proposal would cut payouts for anyone born after 1972 by about 14%.
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u/allbusiness512 John Locke 1d ago
The political backlash to that would be catastrophic. I seriously doubt that actually even makes it out of committee.
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u/TheloniousMonk15 3d ago
Naah. It will be President Josh Shapiro in 2030 who has to make the necessary call to reform SS and lose reelection due to it.
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u/I_miss_Chris_Hughton 2d ago
They'll cannibalise the rest of the welfare budget to prop up pensions, I guarantee it.
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u/JapanesePeso Jeff Bezos 2d ago
When you hate the other team so much you want them to do the right thing.
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u/theg00dfight 2d ago
I think gutting social security and Medicare is bad, actually
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u/JapanesePeso Jeff Bezos 2d ago
How you gonna pay for it then?
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u/theg00dfight 2d ago
How are you gonna pay for millions of destitute seniors who can no longer afford to pay rent or buy food or prescription drugs when you gut it?
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u/JapanesePeso Jeff Bezos 2d ago
I see your plan to pay for it is to be so indignant the problem goes away. Very good strategy.
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u/theg00dfight 2d ago
Once again- what is your plan for the huge segment of people who would be destitute if you gutted SS and Medicare?
As for keeping SS sustainable for significantly longer- raise the cap on SS contributions to ensure the health of the trust fund is a clear step 1.
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u/toms_face Hannah Arendt 2d ago
Abolishing the social security tax cap.
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u/taubnetzdornig Gay Pride 3d ago
While we're on the topic of Social Security reform, is there any downside to removing the income cap (currently $168,600) on payroll taxes? The way it's structured right now, it's basically a regressive tax that benefits the top ~10% of earners, so if it were removed 90% of workers would see no difference in their tax burden.
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u/0WatcherintheWater0 NATO 3d ago
That would increase benefits as well, as they are based off contributions. The net effect would be small.
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u/toms_face Hannah Arendt 2d ago
We're talking about removing the cap without increasing benefits.
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u/0WatcherintheWater0 NATO 2d ago
You canât do that. Not without fundamentally changing the structure of SS.
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u/toms_face Hannah Arendt 2d ago
Of course we can do it. It would only require an act of Congress. Abolish the cap and no changes to payments.
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u/0WatcherintheWater0 NATO 1d ago
At that point youâre just abolishing it entirely. Not that I would necessarily be opposed to that but thatâs a bit of a trojan horse, isnât it?
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u/toms_face Hannah Arendt 1d ago
Yes, abolishing the taxable income cap entirely. This would provide more money into the social security budget.
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u/ArbitraryOrder FrĂŠdĂŠric Bastiat 2d ago
We could do all of the following:
Remove the cap
Cap benefits
Increase the age for maximum benefits
But that would require political courage.
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u/0WatcherintheWater0 NATO 2d ago
Again removing the cap would do little.
Capping benefits and increasing age would be more effective. Though at some point it may just be better to try to means-test it.
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u/WolfpackEng22 3d ago
It would be a huge tax hike on high earners. Income brackets take a big jump around where SS phases out for exactly this reason.
And those earners are all way past the 2nd bend, so they will get little for their large increase in payments making SS even more of a welfare program
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u/Stanley--Nickels John Brown 3d ago
Here are what the marginal rates look like at each income level
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u/toms_face Hannah Arendt 2d ago
The cap can be gradually increased and phased out. Nothing wrong with social security being welfare.
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u/Appropriate_Donut249 2d ago
Itâs not means tested because public support for it would dramatically fall if it was.Â
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u/toms_face Hannah Arendt 2d ago
I think you may have responded to the wrong comment - we weren't talking about means testing.
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u/Albatross-Helpful NATO 3d ago
The Windfall Elimination Provision (WEP) applies to workers whose employers did not withhold taxes for SS payments.
Forgive the stupid question: Does "not withhold" = "did not pay any tax"? Later on, it is clear that:
If you receive a retirement or disability pension from a federal, state, or local government based on your own work for which you didnât pay Social Security taxes, your Social Security benefits may be reduced. You may not receive any payment at all.
I'm just asking if these are financially equivalent?Â
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u/TheloniousMonk15 3d ago
My mom worked a job for almost 15 years where she did not pay SS taxes. She receives a pension for this job.
She is currently in year 8 of a new job where she is paying into SS. Needless to say she is close to retirement.
Will this bill increase her SS payouts once she (hopefully) retires in 2.5 years?
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u/cougar618 3d ago
I wish we could go back and have a serious discussion on social security back when Bush wanted to go all in on the stock market. Maybe we would have looked north to Canada and would have done something similar.
Now we gotta pretend that SS is solvent because everyday more and more people will rather wait to collect their payout in full before doing something about the program.
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u/GrumpyAboutEverythin NATO 2d ago
This was a great read Op, given Biden and how his presidency has been it is clear that he will probably not veto it, but this was a great read.
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u/GreatnessToTheMoon Norman Borlaug 3d ago
Political feasibility aside Social Security is a scam and should be abolished.
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u/toms_face Hannah Arendt 2d ago edited 2d ago
There are some key details missing here. Abolishing the windfall elimination provision/government pension offset may or may not be a good idea depending on what the impact is on the individuals having their social security payments reduced. So how much will it reduce their payments by? Can we get some examples on the practical effect of this law? What is the effect on the budget?
Separate to this post, I must make the point again that the supposedly upcoming insolvency of Social Security is a red herring. If the payroll tax is applied to income above $170,000 as it is below, that delays insolvency by several decades.
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u/M7MBA2016 3d ago
Yes, free money helps the people getting free money.
The issue is cost and fairness.
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u/GestapoTakeMeAway YIMBY 3d ago
Why is no one in government have any sense of fiscal government responsibility anymore? Weren't voters and politicians cheering at one point for increased taxes and more restrictions on social welfare services during the Clinton era in order to reduce the deficit? What happened to us?
Please Biden, do one more based neoliberal thing, and veto this act. The interest payments on the national debt are going to reach around a trillion dollars soon, don't make it worse.
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u/ElGosso Adam Smith 3d ago
If H.R. 82 was enacted, the balance of the OASI trust fund would, CBO projects, be exhausted roughly half a year earlier than it would be under current law. (The agency estimates that under current law, the balance of the OASI trust fund would be exhausted during fiscal year 2033.)
Seems like it doesn't really matter all that much in the grand scheme of solvency and most people are using this as a soundingboard for their general feelings about Social Security.
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u/ArcaneAccounting United Nations 3d ago
Hmm yes, all retirees should have their retirement income gutted because you don't like them. Sounds fair!
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u/GMFPs_sweat_towel 3d ago
Especially since these people paid into Social Security their entire working careers.
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u/GaBeRockKing Organization of American States 3d ago
Cutting payroll taxes and SS INCREASES the net income of elders with children, because those children can then spend their time and effort caring for their parents instead of working to support freeloaders, and because less deadweight loss from taxation improves economic efficiency and lowers prices for labor and goods.
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u/blu13god 3d ago
and DECREASES net income of people who don't, if you want a child tax credit just say it
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u/GaBeRockKing Organization of American States 3d ago
> and DECREASES net income of people who don't
Yes! That's the point! If these people didn't want to have children, they should have worked harder to save for retirement. Instead they want to force other people's children to take care of them. That's morally repugnant.
> Â if you want a child tax credit just say it
I also want a child tax credit, but it's much easier to stop digging a hole than to fill it while you're digging it at the same time.
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u/blu13god 3d ago
Is this JD Vanceâs burner account?
No the point is you pay in you get out. Not this weird intergenerational wealth distribution plot you created
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u/GaBeRockKing Organization of American States 3d ago
Is this JD Vanceâs burner account?
JD Vance, like you, is pro-social-security, because he is a political opportunist capable of supporting whatever idiotic populist policy will keep him in office.
No the point is you pay in you get out
Money isn't real. Money is the token we use to adjucate the allocation of resources. If you put a $100 dollar bill into a bank in the year 1800, and take it (plus interest) in the year 2000, there things you can buy with it are simply incomparable. It's not just that the value of the money has changes, it's the the value of absolutely everything has changed. You can buy more computing power with that $100+ dollars than was available to the entire planet in the year 1800, but alternatively if you want to buy land then you'll only be able to afford a much meaner parcel in a much worse location.
When they were young, our elders made decisions about how much labor-value they wanted to put into the bank, and how much labor-value they wanted to expend toward having and raising a family. As a direct result of the choices they made in response to the incentives in front of them, labor will become increasingly scarce. So, what makes them entitled to retrieve specifically the same unit-value of labour? If you do me a favor and help me move out of my house when we're both jobless and broke, I certainly owe you a favor back... but if the value of my time changes dramatically, for example because I'm in the middle of a wedding ceremony, you're not entitled to show up in coveralls and demand exactly the same favor back.
If you're dead set on your framing of social security as a bank, then I propose a compromise-- we let our elders take out exactly what they put in: the exact cash value they paid into social security.
But I don't think you're going to accept that compromise, because it's obvious to both of us that social security is not a deposit of value, it is a transfer payment. And while I'm not against transfer payments in general-- I'm pro-UBI, pro-Medicare-for-All, and pro-LVT-to-pay-for-it-- I am against a system that demonstratably and visibly is in the middle of eating its own tail. Forcing young people to pay payroll taxes so that old people can benefit decreases the amount of time they have to have children... which forces them to demand even higher payroll taxes when they in turn become old... which results in even fewer children, and a continuation of the vicious cycle.
We live in a gerontocracy? Can't you see that? Policies like social security directly contribute to the welfare of a bloodsucking elderly population at the expense of an increasingly deprived younger cohort. Social Security borrows from the future in the exact same way as unsustainable CO2 emissions and deficit spending.
Yes, it's going to suck for whichever generation gets the rug pulled out from under them. But it has to happen to someone, and the earlier, the better. I'd support a more graduated transition if I thought it was politically feasible... but that fact that you accused me of being JD Vance without realizing his policies align more with yours than mine makes me think the population is not nearly educated and informed enough for that to happen.
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u/blu13god 3d ago
the JD vance comment is the fact that you are still focusing on people who have children and for some reason hold them in higher regard than fellow Americans who don't have children.
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u/GaBeRockKing Organization of American States 3d ago edited 3d ago
Yes, I hold people who work hard to improve their communities in higher regard than people who work less hard. Am I supposed to be ashamed about that?
People who spend their money on frivolous things and get deep into credit card debt don't deserve to be bailed out by the fiscally responsible. People who spend their youth buying funko pops and taking vacations don't deserve to be bailed out by the people who actually settled down and started families.
Social security is a bailout for the irresponsible. Parents with few or no children could have invested into the future-- they could have fostered deeper social ties, or put more money away, or just had more kids. But they didn't, and now they want to use what the responsible, dedicated parents build up.
Luckily, the status quo is that social security is guaranteed to fail sometime within the next few decades. The larger the deficit becomes, and the more inflation goes up to match it, the more the buying power of social security is reduces. Alternatively, if higher taxes are levied, companies and young people will simply flee the country for better economies and the actual labor-buying power of social security payments will disappear. And if the government does intervene-- either to make it cover a smaller proportion of the population, sapping its support base, or to make it more profligate, accelerating the earlier process, it disappears even faster. Parents with plenty of children will still be totally fine-- their children can send them renumerations from foreign countries, or alternatively perform unpaid and therefore untaxable labor to maintain their quality of life. That's how my grandmother survives in the poor country she lives in, since she bore eight children. But a reckoning is coming for the profligate and lazy.
(Before you @ me about corporate bailouts/subsidies I'm obviously not in favor of those either.)
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u/blu13god 3d ago
Plenty of child-free people work hard, contribute to their communities, and make responsible choices and plenty of parents are the rent seekers leeches who donât contribute in any capacity but I guess they are automatically held higher because they had a kid? People should be recognized for the different ways they add value to society, not just for following one particular path.
Social security isnât just for parentsitâs a safety net for everyone. Claiming itâs a âbailoutâ for the irresponsible ignores the fact that the system is there to help all citizens, no matter their family situation. Kids donât guarantee future support, and not everyone has the resources to save or invest like others might.
Iâm glad your grandmother had plenty of children and was fine but this is the same type of argument that people use who argue women should be in the house and are child-bearers
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u/MacEWork 3d ago
Complete and utter fantasy. Real life does not work like a video game or theory paper. This is ridiculous.
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u/kiwibutterket Whatever It Takes 3d ago
Your point is not impossible to make here, but you picked an inflammatory tone that just attracts unconstructive replies. Be civil and level headed when arguing, because this leads literally nowhere.
Rule III: Unconstructive engagement
Do not post with the intent to provoke, mischaracterize, or troll other users rather than meaningfully contributing to the conversation. Don't disrupt serious discussions. Bad opinions are not automatically unconstructive.
If you have any questions about this removal, please contact the mods.
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u/BobertFrost6 3d ago
because those children can then spend their time and effort caring for their parents instead of working to support freeloaders
Totally wild that you think this is logical or feasible whatsoever. What I pay in SS taxes does not come remotely close to what it would cost me to personally try to ensure that my aging parents are cared for.
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u/GaBeRockKing Organization of American States 3d ago
You have all the pieces to the problem in your hands, and yet somehow have completely failed to put them together.
If it's impossible for a single adult to support two elders... Why are we perpetuating a system where people area clearly incentivized to only have a single child? I hate to break it to you, but your parents are freeloaders. They got all the financial benefits of having fewer children, and now expect the people who worked harder to have large families to subsidize them.
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u/BobertFrost6 3d ago
 If it's impossible for a single adult to support two elders... Why are we perpetuating a system where people area clearly incentivized to only have a single child?
First, people are not "incentivized" to specifically have one child, and that's not what my parents did. Second, plenty of people don't have children at all and they still deserve to be able to retire.
  I hate to break it to you, but your parents are freeloaders. They got all the financial benefits of having fewer children, and now expect the people who worked harder to have large families to subsidize them.
They paid into SS just like everyone else. SS is not tied to how many babies you pop out.
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u/GaBeRockKing Organization of American States 3d ago
> They paid into SS just like everyone else. SS is not tied to how many babies you pop out.
Yes! And that's exactly the problem! The default state of humanity is that you're incentivized to have children so they can contribute to your quality of life. Therefore guaranteeing a certain quality of life independent of how many children you have is effectively equivalent to an incentive to have less children, and spend your time on things other than childrearing.
> Â Second, plenty of people don't have children at all and they still deserve to be able to retire.
I believe that all people deserve a certain quality of life regardless of their ability to work-- and for that, I prescribe UBI. I don't believe that old people specifically deserve to live better lives than young people just because you're old. If you're childless, and you want to retire, you can take the time you would have otherwise used to raise your own children to find renumerative employment and save up a nest egg-- or alternatively you can use that time to help raise other children in your community so that they will be willing to help you in your dotage. Parents have to work and parent. Infertility isn't a free pass to convert that parenting time into leisure time.
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u/BobertFrost6 3d ago
 Yes! And that's exactly the problem! The default state of humanity is that you're incentivized to have children so they can contribute to your quality of life. Therefore guaranteeing a certain quality of life independent of how many children you have is effectively equivalent to an incentive to have less children, and spend your time on things other than childrearing.
Humanity is driven to reproduce for the same reason as all organisms, life is driven to reproduce. It isn't "for contributing to your quality of life." This is America, people are free to choose what kind of family they want to have. Mind your own damn business.
 If you're childless, and you want to retire, you can take the time you would have otherwise used to raise your own children to find renumerative employment and save up a nest egg-- or alternatively you can use that time to help raise other children in your community so that they will be willing to help you in your dotage. Parents have to work and parent. Infertility isn't a free pass to convert that parenting time into leisure time.
Thats exactly what it is. Parenting isn't a free pass to demand free labor from your offspring later in life. Your choice to have kids is one of personal fulfillment-seeking. Others choose to seek fulfillment without children. This has no bearing on whether or not the government should ensure seniors are cared for and there should be 0 discrimination based on how many babies one had.
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u/GaBeRockKing Organization of American States 3d ago
Humanity is driven to reproduce for the same reason as all organisms, life is driven to reproduce. It isn't "for contributing to your quality of life."
Life is driven to reproduce by particular incentives. There's no magic switch in our heads that says, "okay now you've gotta have children." There is the interplay of competing factors like, "desire for food" and "desire for sex" and "desire for a promotion at work" and "desire for children to support me in my old age." Or at least, that's how I work. If you and your family are just mindless automatons with a broken "have kids" switch that sucks, but I don't see why I should be paying for the lifestyles of broken automatons.
This is America, people are free to choose what kind of family they want to have. Mind your own damn business.
Mind YOUR own damn business! Stop telling other people's children what to do.
If you really want to argue from libertarianism, then let's just agree to make participating in social security voluntary. We tax payrolls a certain amount, and distribute that taxation evenly among all elderly participants. That's a perfectly self-sustaining system, where it's impossible to have surpluses or deficits.
Thats exactly what it is. Parenting isn't a free pass to demand free labor from your offspring later in life.
And not-parenting isn't a pass to demand free labor from other peoples' offspring later in life.
Also, the fact that bad parents would get no support is a feature, not a bug. Social Security is an incentive to be an abusive narcissist-- if parents knew their retirements depended on how much their children loved them, they would be forced to make better choices.
 This has no bearing on whether or not the government should ensure seniors are cared forÂ
The government should ensure that EVERYONE is cared for. That's why we should replace social security with a UBI. Seniors aren't special.
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u/BobertFrost6 3d ago
 Life is driven to reproduce by particular incentives. There's no magic switch in our heads that says, "okay now you've gotta have children."
Thats literally how all life works. Of course some people choose to resist that instinct and not have kids, and that's their right. They shouldn't be punished for it.
 Mind YOUR own damn business! Stop telling other people's children what to do.
I didn't. If you want to help out your parents that's your choice.
 If you really want to argue from libertarianism, then let's just agree to make participating in social security voluntary. We tax payrolls a certain amount, and distribute that taxation evenly among all elderly participants. That's a perfectly self-sustaining system, where it's impossible to have surpluses or deficits.
I'm not arguing from libertarianism. A libertarian would never support a social safety net.
 And not-parenting isn't a pass to demand free labor from other peoples' offspring later in life.
No one is doing that. We democratically agreed to create a social safety net that protects our seniors whether they have kids or don't. No one is "demanding free labor" from their children or other children.
 Also, the fact that bad parents would get no support is a feature, not a bug. Social Security is an incentive to be an abusive narcissist-- if parents knew their retirements depended on how much their children loved them, they would be forced to make better choices.
Very silly. Plenty of parents were bad parents before social safety nets existed and no child should feel obligated to support their parents in their old age regardless of how good of parents they were.
Your life is your own. You do not owe your parents anything. They didn't have you as a gift to you. They did it for themselves.
 The government should ensure that EVERYONE is cared for. That's why we should replace social security with a UBI. Seniors aren't special.
Sure, I'm not opposed to expanding the social safety net.Â
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u/WolfpackEng22 3d ago
"SS is not tied to how many babies you pop out".
Arguably it should. Having kids means you raised workers who will continue to pay into the system and support you while you're retired. Being childless means you are relying on others to provide the next generation to support you.
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u/BobertFrost6 2d ago
Very silly. Popping out a bunch of babies you barely take care of doesn't mean you are entitled to a slice of their adult labor.
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u/WolfpackEng22 2d ago
Most people take significant care of their children. It's an expensive and time consuming endeavor which has significant positive effects on the broader economy and retirement systems.
Controlling for income, People who have and raise children are contributing more to SS than the childless.
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u/BobertFrost6 2d ago
People who have and raise children are contributing more to SS than the childless.
No, they aren't. I am responsible for my own contributions to SS. Not my parents.
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u/AMagicalKittyCat YIMBY 3d ago
It's the freeloaders and defect-bots that will suffer.
As I wrote elsewhere, Social Security came about in the 30s, there are very few people alive today before then and nobody who would have been in/near retirement then. Even the most geriatric of Americans spent their life paying into this system for their elders being implicitly promised that they will have a turn once they are aged.
Now they are aged and they want their implicitly promised turn. The US government made a deal with its workers and it's understandable why those workers would be upset if the government refused to cover their social security. I can't agree they are freeloaders under that context, the elderly who paid into the system held up their end of the bargain.
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u/GaBeRockKing Organization of American States 3d ago
"A hundred years ago, we promised people that we would pay them money to stab children. I know you don't want people stabbing children, but we promised them that money!"
Social security was created with fine intentions, but with a century of retrospect it is also clearly bad policy.
Forced cash transfers from the young to the old are like a bubble that we force young people to pump so old people can comfortable live inside. But it turns out that forcing young people to pump up the bubble discourages them from having the children necessary to pump up their own bubbles in their dotage.
It's not fair that some people worked at the pumps and now won't get their turn inside the bubble... but it'll be even less fair to kick the can down the road, making younger generations work even harder for even less of a chance to get into the bubble.
Progressives claim that we could tax the rich to pay for social security instead, but if we're going to just admit to ourselves that these are transfer payments rather than savings, then let's just bite the bullet and institute UBI instead. Old people shouldn't be uniquely advantaged just because they're old.
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u/AMagicalKittyCat YIMBY 3d ago
Ah yep you got me there, paying taxes to the government is not meaningfully different than stabbing children.
But it turns out that forcing young people to pump up the bubble discourages them from having the children necessary to pump up their own bubbles in their dotage.
Is there any proof that social security is a cause yet alone the cause people are having less kids? It seems like a global trend which SS is not.
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u/GaBeRockKing Organization of American States 3d ago edited 3d ago
Ah yep you got me there, paying taxes to the government is not meaningfully different than stabbing children.
Morally there's a difference, but in terms of economic choices there isn't. If you spend more time at work because you have to pay more taxes, you're spending less time having and raising children. If you're spending more time at work because having a higher income increases your social security payout, you're having less children. Children are an input good required for the creation of the output good "requirement." The net effect is that children are getting (economically) stabbed.
Is there any proof that social security is a cause yet alone the cause people are having less kids? It seems like a global trend which SS is not.
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u/AMagicalKittyCat YIMBY 3d ago
A pension system in Namibia seems useless to analyze and apply here to the US. Social security didn't manage to stop the Baby Boomers.
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u/GaBeRockKing Organization of American States 3d ago edited 3d ago
You asked for a source and I gave it to you. If you aren't convinced that's no skin off my back. Social security is doomed without intervention, and every likely intervention-- including the one we're discussing in this thread-- is just going to make it either less popular or more insolvent. "Social security is bad" is the null hypothesis. If you can't argue otherwise it's going to collapse.
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u/AMagicalKittyCat YIMBY 3d ago
Yeah for social security, not Namibia lol
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u/GaBeRockKing Organization of American States 2d ago
If I actually find and provide a source that proves that social security decreases TFR (or otherwise make a convincing argument to that effect), will you change your mind about how good social security is, or will you find some other objection that lets you keep supporting it? If all you're going to do is throw up peripheral concerns you don't care about so I'm forced to waste time addressing them instead of the actual core of why you think social security is good, there's no point in talking to you. I'm not interested in expending effort against someone arguing in bad faith.
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u/AMagicalKittyCat YIMBY 2d ago edited 2d ago
If there is actual evidence that social security is the major factor behind dropping birthrates in the US that also explains why these birth rate drops did not manifest so heavily until recently (after all the Baby Boom was 30 years after SS came about) at a time coinciding with worldwide drops in birth rates that also follows a longer pattern of declining birth rates since the 1800s then sure yeah, I'll believe it.
But currently the better argument seems to be more widespread access to birth control and education about how pregnancy happens (meaning people are less likely to just get pregnant when they don't want to) being more widespread plus the steady growth of women's rights allowing them increasingly more choice plus child survival rates (meaning less births = same amount of kids) given those have a very obvious and direct mechanism that could impact birth rates. Especially birth control access in the modern era, given that they are literally designed to have less pregnancy and less births, it would be strange if they weren't one of the bigger causes over something as indirect as "people thinking about 50 years in the future" when they barely even plan a year out well.
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u/kiwibutterket Whatever It Takes 3d ago
Rule I Excessive Partisanship
Please refrain from generalizing broad, heterogeneous ideological groups or disparaging individuals for belonging to such groups. This tends to come up in discussion of governing political parties or disparaging voters.
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u/ale_93113 United Nations 3d ago
What about those who couldn't have children? Screw them right?
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u/GaBeRockKing Organization of American States 3d ago
If you can't have children, you should either be helping your relatives and community members rear their so their children will also be willing to support you in retirement, or alternatively you should be working harder to build a nest egg for retirement. You shouldn't expect everyone else to work just as hard as you did to build up savings for retirement and also raise children at the same time.
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u/ale_93113 United Nations 3d ago
The whole point of pensions is that not everyone is able to save money for their retirement, because not everyone is wealthy enough to do that
And many people have accidents that require large sums of money without which they cannot support themselves
Some will have children to take care of them but many won't, and they should not be punished for that
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u/Icy-Magician-8085 Mario Draghi 3d ago
Itâs literally the size of an article.
Ask ChatGPT to summarize it if you want it that badly.
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u/LtCdrHipster Jane Jacobs 3d ago
Right now, retirees who didn't pay SS taxes because they get a big fat public pension upon retirement get their SS payouts adjusted down to account for that, the reasoning being that despite not paying SS taxes, part of their paycheck is still diverted to pay for a government-run pension.
This bill means these people paid nothing in SS taxes during their working life, get a big public pension, AND now will get 100% SS benefits, too.
Its a tax transfer from the working youth to the idle old.
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u/its_a_trapcard Resident Rodrigo 3d ago
We can't afford the SS we have in the long term
This bill makes that problem worse
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u/Nautalax 3d ago
So far as Iâm understanding it (yâall feel free to correct me if Iâm wrong) people who are now or will be eligible for social security and are at least 51-59 years old right now (depending on when people start drawing benefits) will get screwed out of 17% of half a yearâs worth of social security payouts that theyâd otherwise get in 2035 if this law passes - that money will be spent so that government employees who already have a pension can get a full social security payout instead of the reduced one they currently do.
This is as opposed to if the law fails in which case it can sustain the full benefits (as opposed to 83% of the benefits) for another half a year.
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u/toms_face Hannah Arendt 2d ago
This law has relatively little impact on how much payments may be cut in 2035.
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u/die_hoagie MALAISE FOREVER 2d ago
Rule III: Unconstructive engagement
Do not post with the intent to provoke, mischaracterize, or troll other users rather than meaningfully contributing to the conversation. Don't disrupt serious discussions. Bad opinions are not automatically unconstructive.
If you have any questions about this removal, please contact the mods.
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u/O7NjvSUlHRWabMiTlhXg Norman Borlaug 3d ago
They're proposing increasing social security benefits? That's insane.