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Posts Tagged ‘social security program’

Cantor Disagrees with Reid Over Social Security Comments

Friday, January 28th, 2011

House Majority Leader Eric Cantor, Representative Republican of Virginia, took jabs at Majority Leader Harry Reid, Senator Democrat of Nevada, over Reid’s Social Security comments. Reid made comments that the current Social Security program is not facing a financial crisis.

According to Cantor, Reid is a roadblock to addressing the deficit and taking real action to tackle issues with Social Security.

President Obama in his State of the Union address called for a bipartisan solution to strengthen Social Security for future generations. President Obama said reforms must come without benefit cuts. Cantor disagreed with the President on that point, stating that everything should be n the table.

Republicans have said they are willing to examine all options for entitlement programs such as Social Security, in an effort to address the nation’s climbing deficit. The Republicans are committed to leaving the retiree benefits unchanged, at least for those Americans older than 55.

Cantors remarks about Reid came after the Senator made comments on national TV that the problem in Social Security is overstated. Reid told NBC that people who dislike government perpetuate Social Security comments and that the program itself is fine. Senator Reid did include in his comments that Social Security could use improvements. Reid does not want to sacrifice Social Security in order to deal with the nation’s debt.

Pawlenty Proposes Social Security Benefits Cuts

Wednesday, January 26th, 2011

Former Minnesota Governor Tim Pawlenty stated that limiting Social Security payments to wealthier Americans could help the country lower its growing national deficit. Pawlenty, a potential 2010 presidential candidate, told an audience in the state of New Hampshite that annual increases in payments to wealthier Americans might be scaled. Pawlenty also stated that wealthier Americans do not rely on cost-of-living adjustments.

In 2009, the Social Security program paid out $700 in various benefits to more than 53 million Americans. The program faces a $5.3 trillion financial shortfall over the next 75 years as the nation ages and fewer Americans pay in workers taxes.

Current recipients of Social Security benefits have not seen an increase in payments during the last two years. Pawlenty suggested those with adequate income should have their payments curbed while others should receive payment increases.

Pawlenty also believes the nation should consider raising the retirement age.

Tax Cuts: Dealing with Social Security Windfall

Friday, January 14th, 2011

In December, Congress enacted a 2 percent tax-cut extension for contributions to Social Security for workers with annual salaries up to $106,800. Congress is hoping this tax cut will strengthen the economy.

The tax cut has resulted in additional take-home pay for many Americans, though the amount per check is relatively miniscule. Some Americans note they will be either spending or saving the money: either putting it toward their debt or using it for their day-to-day necessities.

Workers do not need to make any changes to their tax forms, as the tax cut is handled by employers. It should also be noted that the tax cut does not affect employer contributions to Social Security.

The IRS notes that these changes should all be in effect by January 31st. However, employers have until March 31st to make any adjustments for overwithholding. The IRS adds that all though these changes are automatic, workers should still examine their federal tax withholdings every year; as changes may be necessary for lifestyle changes such as children, marriage, buying a new home or divorce.

Furthermore, though the Social Security Administration claims that this temporary drop in income will not affect the system, many Americans are doubting that. Some consequences of the tax cut may include a delay in age where benefits can be received or a lower monthly benefit for future beneficiaries.

Thus, financial advisors across the board recommend that Americans begin thinking more seriously about their financial future, as Social Security benefits may not be very dependable.

Fraud at the Social Security Administration

Wednesday, January 12th, 2011

The Social Security Administration (SSA) releases estimates of their accounting, but never actual solid numbers; causing many to contemplate that there is fraud occurring within the system.

Social Security checks are sent out monthly to disabled or retired workers, with 1 out of every 6 Americans receiving a Social Security check. Social Security works through taxing workers a specific percentage of their yearly pay, with any surplus of money being deposited into the Treasury’s trust funds.

However, today more money is being paid out to beneficiaries than is being collected by current workers. To make up for the deficit, the SSA withdraws money early from their trust funds and deposit a non-marketable security known as a intragovernmental holding. This is essentially an IOU and is included into the total National Debt of the United States.

In order to redeem the money already borrowed, the Treasury must then borrow from the global bond market. Taxpayers are now held accountable for this newly acquired debt and its interest. In essence, the taxpayers are now paying twice for their Social Security, as their tax payer money goes toward both the National Debt and to Social Security.

Furthermore, the deficit of the trust funds are expected to grow as the baby boomers become eligible for benefits. the SSA estimates their reserves will be exhausted in 2037; though the numbers given as estimates by the SSA themselves may show otherwise; causing Americans to believe there is severe cases of fraud occurring within the Social Security system.