SAVING SOCIAL SECURITY
Social Security remains the most successful social program in our nation’s history and has long been the foundation of economic stability for America’s retirees. Yet, despite this fact, the program has been continuously and systematically attacked by Republicans since its inception in 1935. Beginning with Ronald Reagan’s presidency, every Republican administration since has made great efforts to either dismantle or economically hinder the Social Security system. Anita de Palma believes that working Americans have earned the right to expect that Social Security will remain solvent well into the next century.
A Plan to Save Social Security
Essential Components
- Increase the Current Health Insurance Percentage Paid by Both Employees and Employers. Raise the percentage of health insurance, paid by employees, by 0.55% -- from the current 1.45%, to 2% and the amount matched by their employers from 1.45% to 6.50%. In other words, the total FICA tax paid by the employee would increase from the current 7.65% to 8.2% -- the employer’s total contribution would increase from the current 7.65% to 13%. This additional 8.5% in collections would go to fund a National Health Insurance Program.
- Eliminate theTaxable Earnings Base. The elimination of the Taxable Earnings Base, TEB requires that all employee wages become subject to Social Security tax. However, the tax collected on wages above the TEB would have to be reallocated in the following manner: the entire 8.2% of the additional taxes, paid by the wage earners, above the current TEB, would exclusively go to funding Social Security Retirement Insurance (RI). Conversely, the entire 13% portion, paid by his/her employer, would be slated to fund National Health Insurance (NHI).
- Subject Investment Income to Social Security Tax. The second initiative requires that the Capital Gains tax rate be increased from its current 15% to 28%, with the additional 13% tax being accessed on incomes earned from Investments (including all corporate and trust investment income, earned either domestically or from foreign sources) should become eligible for Social Security tax collections.
- Eliminate the Earnings Limitation. The fourth portion of this new approach calls for the elimination of the current “Earnings Limitation” imposed on persons receiving Social Security benefits. All persons, regardless of age, receiving Social Security, may earn as much as they can without affecting or lowering their benefit payments. Moreover, it would help to somewhat stem the tide of poverty experienced by many of our nation’s retired seniors. Furthermore, allowing these working retirees to earn as much as they can means that, as a result of taxes paid on these additional wages, they would actually help increase the total amount contributed to the current Social Security fund (and, also help increase collections for National Health Insurance).
- Require That All Workers Participate in the Social Security System. Currently many railroad workers, and federal, state and municipal government employees, are exempt from paying into Social Security. The plan proposes that ALL PERSONS (Including Members of Congress!) be required to pay the FICA tax. However, employers of these FICA exempt workers, for whom the employer currently provides other retirement programs, would be required to maintain and continue to fund such programs – then, through attrition (and for new hires), these employers would be relieved from providing this additional coverage.
- Prohibit the Raiding of the Social Security Trust Fund by Future Presidential Administrations. End the 30-year raid on the Social Security Trust Fund and authorize the establishment of a Social Security "Lock Box" designed to set the Trust Fund aside for the specific purpose of funding Social Security, thus protecting it from the Washington money machine that has robbed the fund to pay for other federal programs over the last three decades.
The adoption of all these provisions would not only help to fund a National Health Insurance Program, but would totally avert the now predicted Social Security shortfall and, would even provide the Trust Fund with a surplus by the year 2083!
The Critical Challenges We Now Face
The Projected Social Security Shortfall: According to a March, 2008 report from the Center on Budget and Policy Priorities, the Social Security program “will be able to pay 100 percent of promised benefits … until 2041. At that point, income will be sufficient to pay only 78 percent of benefits.” The Office of Management and Budget (OMB) estimated that over the next 75 years, the projected Social Security shortfall would be $4.6 trillion.