Friendly reminder that all we need to do to make it solvent is get rid of the cap.

It’s insane we have a max limit and not a minimum. Someone making 160k won’t even notice the 6.2% on all of it, someone making 20k tho the 6.2% is life-changing.

The existing system was never designed for this level of wealth inequality.

Unfortunately the Republicans want to break it further and the Dem leadership refuse to acknowledge the obvious solution.

Would someone please give me the ELI5 on why Republicans want to destroy Social Security? Do they want to privatize it by making everyone put money into a 401K that is controlled by Wall Street money managers, who then skim their share? Are they STILL pissed about Roosevelt? Are rich Republicans pissed that poor people might not have to eat cat food in their old age? Is it that the foundational idea is that we all contribute…and that’s COMMUNISM??? I just don’t understand their motivation.

The Social Security Trust Fund does not exist. It is an accounting fiction. When Social Security was passed, it came with a tax increase to offset the increased spending. For decades, the tax increase was greater than the spending increase, so the government spent the difference on other stuff; but made a note that Social Security had a surplus. However, since 2010, this flipped and the cost of Social Security has exceeded the income of its associated tax. The bean counters would the flip happened in 2021, but that is because they believe in the fiction of the Social Security Trust Fund, so that interest on the Trust Fund counts as income to Social Security, despite the fact that said interest is paid by the federal government.

So, why does this accounting fiction called the Social Security Trust Fund matter? Because it has the force of law. Under current US law, Social Security is exempt from the the typical budgetting rules. As long as the bean counters would say the Trust Fund has a positive balance, Social Security is authorized to increase it’s budget to meet it’s obligations. In contrast, most Federal programs get their budgets increased as part of the yearly budget (or a continuing resolution when Congress can’t pass a budget. Or they just close when Congress can’t pass a CR).

So, what happens when the trust fund runs out?

Option 1, Congress does not authorize continued spending at current levels. This is typically known as a spending cut. But because it is triggered by an existing law and Republicans have spent decades playing up the trust fund, they can act like this cut was a force of nature, and not them actively deciding to cut it in the congressional budget.

Option 2, Congress funds social security just like it funds everything else, through an appropriations bill. SS keeps operating, and becomes another political football in the annual budget fight

Option 3, Congress picks some way to tell the bean counters that the social security trust fund is still positive. Social security keeps operating at current lol levels, and remains exempt from the normal appropriations process.

So, what is all this talk about removing the cap on the Social Security payroll tax? If we ignore all the accounting trickery, that is about taking a regressive income tax payed by workers earning less that $168,600/year and turning it into a flat tax. Nothing whatsoever to do with social security, but I agree that a flat tax is better than a regressive tax. Still not as good as a progressive tax, which is the only thing that would have been politically viable but for the fiction that this tax is at all related to Social Security benefits (and their associated limit).

Social Security isn’t even the only federal program to have this issue. Our highway system is payed for by the Highway Trust Fund, which is funded by a tax on gasoline. This fund has been insolvent since 2008, so Congress just included highway funding in their appropriations bills and payed for the difference like they pay for most Federal programs.

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