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General discussion

Social Security Reform

Feb 19, 2004 11:45AM PST

It has been asked why Bush deserves to be re-elected. Aside from the compelling National security issues, high among them on my priority list is Social Security. I favor letting Americans opt to save for our own retirements. There appears to be some momentum building for this, and I believe under Bush it will FINALLY come to pass.

http://www.washingtontimes.com/commentary/20040129-082817-6880r.htm

Evie Happy

Discussion is locked

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Nails are meant to be hit on the head
Feb 22, 2004 7:06AM PST

and I think you have hit this one and hard. If the SS/Medicare system hadnt been looted over the years by members of all our political parties there would be enough surples to cover any problem within the system. I personally feel that the people who broke it should not be allowed to "fix" the system any longer,but forced to take care of it without making ANY changes until the coffers are full again. Maybe take some of the funds allocated to the military or other pork barrel (and I can hear the screams now) projects and put the $$$$$ back where they belong for starts. Or perhaps just deficit fund the system the way they do everything else until it gets straightened out!

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Re:Nails are meant to be hit on the head
Feb 22, 2004 7:55AM PST

Thanks Gearup, At least you know what I'm trying to get across here.

George

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Re:Re:Re:Re:Re:Re:Re:Social Security Reform
Feb 22, 2004 7:14AM PST

My posts seem to go the way of SS $$$$. Into some kind of void. You are absolutely correct. Let them divert some of the funds for the military and other pork barrel projects (and i can hear the screams now) into the SS\Medicare system from which they were stolen in the first place. Then make sure that funds generated for the system remain in it. Until then no changes of any kind should be made and the system,until it is fiscally sound again,can be sustained by deficit funding,the same way we explore space or pay for weapons or fund other vote buying projects!

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Re:Re:Re:Re:Re:Social Security Reform
Feb 21, 2004 5:37AM PST

I wish I could find or link you to what took place back then. Do not have the capabities or even know where to look. It not only involved just RR penions, but also post office and SS exempt pensions as defined by the Gov. Reagon called collecting both SS & RR penions "Double Dipping" and would end it. he sure did.

In your second paragraph " it is also voluntary" Good, I did not know that. With us it was mandatory as explained in my first post. "10 yrs or less" "10 yrs or more" Coupled with the RR anunity mine turned out more than SS benefts. So, kiss the SS benefits away.

I had 31 yrs service with the RR as a locomotive engineer starting out as a fireman, but only 21 yrs
credit pension benefits which included a stetch in the service. Over 35 yrs self employed business, so I should have been able to collect both SS & RR. That deal back in 1980 killed it. Anyone retiring before that period is collecting both if they are still alive.

Hey I hope everyone makes out with this new deal, but when it comes time to retire, hows the average Joe on the street going to know which to choose.

George

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Actually it was a retirement and disability fund but...
Feb 21, 2004 10:18AM PST

it was intended ONLY for the wage earners and their spouse. It was never intended to fund the children of a deceased wage earner until they reached their majority.

It also was not intended to be the ONLY retirement a person had as people were still expected to care for their future as they had prior to SS.

It was self sustaining and actually quite "profitable" until representatives in DC could no longer stand seeing the pile of money not getting spent at which point they tossed the monies into the general fund.

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I think you're missing the point
Feb 21, 2004 12:13PM PST

DC cannot let you invest some of your money yourself. What you're paying isn't for you, it's for your parents and grandparents. There isn't enough left to give you some of your money to invest.

What is left over goes into the general fund. The deficit would be a lot larger without this extra money.

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Re:I think you're missing the point
Feb 21, 2004 9:46PM PST

Hi Diana,

No, I'm not missing the point and fully understand that SS is a pay as you go scheme. Just because we are entrapped doesn't mean we shouldn't look for ways out of the trap. The plan specifically keeps half of the contributions to SS intact (along with any who choose not to opt out) to make good on current and future obligations. As to the deficit, that would be a bad thing? The average American having control over their own money and exposing the spending spree politicians for what they are??

Evie Happy

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Maybe we could take the surplus and let people invest it.
Feb 22, 2004 6:04AM PST

According to http://slate.msn.com/id/2093707/ (which I have no idea is accurate or not) states that the SS surplus this year will be $164 billion (seems like a lot - how much does SS take in every year?).

Then we would see how much the deficit really is.

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One other issue ...
Feb 22, 2004 6:21AM PST

Social Security functions both as a retirement plan as well as a long term disability plan and a sort of life insurance plan for the minor children of workers. The article you referenced really did not address these other functions of Social Security. We could debate whether or how to replace them, but in any event we will need to address those aspects of Social Security as part of any reform plan.

I'm not sure what the history is for each of these other functions, but there is significant social value to the long term disability function. I'd hate to see it go. Of course, one option would be to take a portion of the present Social Security 'contributions' and use it to buy LTD insurance for all SS participants. I'm sure there are other possibilities.

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Long term disability ...
Feb 22, 2004 7:02AM PST

Hi Bill,

You are right that those issues are not specifically addressed, but it seems that they are included in that part which is still funded by the employer contribution.

As regards long term disability, I've stated many times that one of the reasons for my hubby becoming an employee was for the benefits (most important of which being medical), but also the rest. His employer offers some life insurance at no cost to him, but additionally offers disability insurances that he pays for (and I assume the company is kicking in part of this). Now, if he becomes disabled, he is covered. I know for a fact that a colleague and friend of his who works for the same company has not opted for any of these insurances, and he has kids. Now, we love the guy, but please explain to me why in addition to being responsible for ourselves, we should contribute to his long term security when he hasn't availed himself of the available coverage? I mean we could use that extra $$ for other things too. It's kinda like these compensations for the WTC folks. Sob stories about possibly having to sell million dollar homes because somehow the wage earners didn't think to plan adequately for if something happened to them? Even outside of the employer, if one is so inclined, it is fairly cheap to purchase mortgage insurance that will pay the mortgage if you become disabled, etc.

I do think that part of reform would be better delineation of exactly what the various programs are intended for and how they are funded. It seems to me that state run welfare for disabled and elderly w/o resources would be a much better solution.

Evie Happy

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I share your sentiments about subsidizing disability, but ...
Feb 22, 2004 7:34AM PST

There are at least 2 serious issues to address before thinking about eliminating social security disability.

(1) Many employers do not offer disability insurance, especially for low income workers; and

(2) In most cases long term disability insurance is applicable only after the employee has left work. This creates a potential "Catch-22" situation for many workers because they may well lose their job before they are clearly "permanently disabled", so they lose their LTD coverage. You wouldn't believe how hard most LTD companies work to find reasons to deny claims even when the patient is clearly disabled. Also, many employer plans have major loopholes. They may limit coverage for mental health problems, and so forth. I took out an individual disability policy when I was still in training, long before I had any work-related LTD coverage and I intend to keep it until retirement because of the limitations in employer-sponsored plans.

One of the biggest issues my patients have to face with SS disability is that most of them have been unemployed for long periods of time before they actually become eligible for SS disability. If you can still work then you are not disabled, but once you stop working the benefits do not begin for 6 months. Then, too, there are many opportunities for the system to go wrong. Many people wait more like a year before the payments start. I have savings adequate to carry me through a 6 month disability, and I could probably go 12+ months if I had to, but most people don't have that much saved up.

I think that having Social Security Disability is reasonable. But then, I also feel that way about health insurance, and I'm pretty sure you disagree with me about government supported and/or mandated health insurance.

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Re:I share your sentiments about subsidizing disability, but ...
Feb 22, 2004 11:04AM PST

Hi Bill,

As to #1, there is no reason the States could not have a supplemental insurance one could purchase if one's employer didn't provide this. This prevents the current double billing that those like my husband are currently essentially being penalized with. A balance could be struck with incentives for business to offer such insurance, plus there is still the notion that employers offer such perks to attract higher quality employees.

The State programs could kick in automatically if one loses one's job/private insurance in advance of becoming fully disabled. And/or the industry could be regulated such that if a person has lost a job due to the onset of a disability, one could compel extension of the disability coverage from the previous employer. My husband will at some point be receiving a workman's comp settlement for his wrist injury. It wouldn't matter if he was no longer with the company, that company will be paying whatever the award is. If he became disabled while employed and unable to work, it seems reasonable that disability would track back to the last place insured provided one kept that current.

It would cost far less to insure only those who fall through the cracks of private industry than offering the blanket system we currently do. And AFAIC, this is where SS as retirement income should move as well. If it is indeed welfare for those seniors who saved inadequately or fell on hard times, then let's call it what it is. But there are some who don't need their SS payments, yet it would be unfair to deny them that which they have been compelled to pay into vast sums. I again see no reason this has to be done at the Federal level.

I see many posts suggesting that SS should be taken out of the general fund and invested. Sorry gang, ain't gonna happen. The only way to change this is to decentralize that power by taking the dollars out of the politicians' kitties and putting it back into the control of individuals. I can see that someone might think a poor person with little financial acumen might just spend hogwild anyway. But if the places that 6% could be put were limited, and the penalties substantial for early withdrawal, once the #'s start to add up that person is likely to be motivated to look for ways to increase the bottom line -- human nature! Consider this, the states often issue bonds to raise revenue. Well, they can offer retirement annuities in a similar fashion. The security of a government issued payment but still the flexibility and ownership of the money.

The unemployment insurance issue is a similar debacle. If Diana (using you as an example because you have shared your current situation with us) had been able to save that portion she paid into this plan (and that her employers paid on her behalf) in a rainy day account, I bet she would still be drawing on that account today. But the current scheme sets us up for further setback. Studies have shown that unemployment bennies tend to cause people to put off finding a new job. Most want to use it all when given the opportunity because they feel (rightly) entitled to get something back that they've paid into. But the payments are not equal to one's former salary, and while you can supplement the income, you are discouraged from taking a job until something better comes along because you then lose those bennies. So you have to drain your other savings and/or go into debt. If you had the money in an account, then any income one might be able to bring in only extends how long that rainy day fund lasts and there is no benefit to not finding a job as soon as possible or penalty for taking a job in a different field until something better comes along. Also, rather than the government offering all sorts of job training and whatnot, you could also merely decide to use your money for tuition, etc. Rambling off topic now, but all these issues are interrelated.

Evie Happy

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Re:Re:I share your sentiments about subsidizing disability, but ...
Feb 23, 2004 7:09AM PST

"But if the places that 6% could be put were limited, and the penalties substantial for early withdrawal, once the #'s start to add up that person is likely to be motivated to look for ways to increase the bottom line -- human nature! "

Well maybe, but for many (and as I recall that would include me) it is extremely hard for 18 to 25 to 30 year old to not touch that money set aside when things came up and they need it to pay bills. Or even to have something that they really need rather than struggle for another year or so.

Whether or not they can make wise investment choices with money available, keeping hands off that money for 20'somethings making less than $50K annually will be very very hard.

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NT Amen. I've been waiting since 1999.
Feb 23, 2004 4:39AM PST

.

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Good thought. How much good does SS as a long term disability plan?
Feb 22, 2004 7:08AM PST

If it pays what it pays retirees, not much good. I am very greatful to have a GREAT employer who, at its own expense, provides a disability plan. It is substantially more generous than SS. Perhaps private coverage of that should also be explored.

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SS Disability can pay more than SS retirement ...
Feb 22, 2004 7:18AM PST

I confess I don't know all the details about how the system works, but IIRC there are two separate payments: Social Security benefits that depend on disability, work history & such, and Supplemental Security (SSI) payments that kick in if the recipient is sufficiently poor. According to the link, the SSI payments are separate from Social Security. You can get an estimate of social security disability payments from the benefits summary that Social Security sends out every couple of years to people who are currently contributing.

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Based on that, disability is about 30% higher than my current
Feb 22, 2004 10:48AM PST

potential SS income. It is less than my SS if I work until retirement age. Not a lot of money.

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You are correct. The benefits are quite small.
Feb 22, 2004 6:53PM PST

Still, even though the benefits are small, they make a huge difference for people who can no longer work.

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There's a Catch-22, Bill...
Feb 23, 2004 7:22AM PST

Bill, there also is a "Catch-22" in Social Security Disability. You get $250 a month for a spouse and $250 a month for children under 18.
The catch is in that $250 for the spouse. It means that I'm not authorized a nurse, my wife's supposed to handle that. If the spouse must work so the family can survive, an interesting situation can arrive.
Remember that fire in my room a rear ago, about which I joked? I'm totally disabled. If my kid is in school and my wife is at work and another fire breaks out, I have 3 choices. Hope I can find a way to put it out, find a way to get outside somehow, or burn to death. BTW, if both them are gone and I "fall down and go BOOM" again, tough cookies for me If I can't get to and drag down a telephone. A certain President didn't "feel that pain".

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It can actually be even more complex than that ...
Feb 23, 2004 7:37AM PST

There is at least one program (locally it's called the "Community Alternatives Program") that sometimes applies to patients like you.

For those patients, if they would otherwise be suitable for nursing home placement (in terms of their dependence on caretakers), the program will sometimes pay to employ an in-home aide. The catch? You are only eligible if you qualify for Medicaid. It's part of the Medicaid home health program. Well, there's also the fact that the local CAP program has a hiring freeze for lack of funds. IOW even the Medicaid patients can't always get the assistance. I don't know of any private insurance company that has a comparable benefit.

It gets even weirder. The program will sometimes hire a family member to be the in-home aide.

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Dear J Vega, have you come across these?
Feb 23, 2004 10:37PM PST

Being medical bleeper necklaces, which when pressed send a radio message for help. These are issued to people at risk under our NHS. It might not be appropriate if provided at great cost or if you are in a remote locale, but maybe there might be a standalone model which can be programmed to contact a receiver carried by a relative for example.

This is the first US link I found that seems to be the same thing, perhaps as a starting point if of any interest.

http://www.pioneeremergency.com/

I am sorry to hear of your circumstances and am only glad that clearly you do have your faculties. My best wishes.

Regards
Mo

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I would check, Kiddpeat...
Feb 23, 2004 7:03AM PST

Kiddpeat, I'd check out the fine print of my disability plan. What you want to know is if the payout amount if you go disabled is reduced if you get Social Security Disability, and by how much.

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As I said, I'm very fortunate to have a great employer. They don't
Feb 23, 2004 9:18AM PST

try to cut corners that way. I've been out a couple of times on disability (manic/depressive), and have always been paid at 100% of my regular salary. I don't know if I have ever been out long enough to breach long term disability. I think long term pays me 70% of my normal salary although I pay extra to boost it from 60% to 70%. I don't think SS is a consideration in how much is paid.

I'm really sad to hear you're disabled and had a fire. I hope you'll let us know if assistance is needed.