OPINION: We need to talk about the pandemic's effect on Social Security. We need to ensure that people retiring in the mid-2030s and later do not see a 20% to 25% cut in benefits.
New wage data offer unexpected angle on one potential avenue of impact
Since this report was prepared before the onset of the COVID-19 pandemic and shutdown of the economy, the press is eager to know how the pandemic would affect the outlook. In an effort to be thorough, I offered three avenues through which the shutdown of the economy could affect the program.
I still feel pretty good about two of the issues covered, but a little sheepish about the third.Program finances. Let me start with the biggest question. Will the weak economy accelerate the exhaustion date of Social Security’s trust fund? In 2021, the cost of Social Security benefits is expected to exceed the revenues coming in. Yet no one is concerned about benefits not being paid in full next year, because Social Security has a pile of assets in its trust fund to cover the gap between cost and income until 2035. But once that trust fund is depleted, revenues are sufficient to cover only 79% of promised benefits initially, declining to 73% by the end of the projection period. If the economic collapse causes payroll taxes to drop by, say, 20% for two years, the depletion date would move up by about two years. Thus, the basic message remains unchanged: As soon as we get the immediate issue of the pandemic off our plate, it would be a good idea to take steps to ensure that people retiring in the mid-2030s and later do not see a 20% to 25% cut in benefits.
Read: AT&T boss retires with $274,000 a month for lifeCost of Living Adjustment. COVID-19 also has potential implications for Social Security’s COLA in 2021, since that adjustment will be determined by comparing the CPI-W in the third quarter of 2020 with that in the third quarter of 2019. If the CPI-W does not increase over that period, the Social Security Administration cannot provide any COLA — the fourth time that such an event would have occurred since the automatic adjustments were introduced in 1975. The absence of a COLA should not harm Social Security beneficiaries, since in theory the cost of goods they purchase also has not increased in price, although substantial debate surrounds the appropriate index for retirees.
Read: Social Security recipients may be in for a rude awakeningSocial Security benefits. Here’s the speculation I feel a little sheepish about. I argued that to the extent that COVID-19 results in a decline in average earnings in 2020, those born in 1960 (who turn 60 in 2020) could see a permanent cut in their benefits. The problem would arise because past earnings and the benefit formula are adjusted by Social Security’s Average Wage Index.
The 2020 Trustees Report projects an increase in the Average Wage Index, but I argued that, in the wake of COVID-19, wages in 2020 may well decline rather than increase, as it did in 2009.Read: The one thing you probably haven’t done in quarantine — but should
It never occurred to me that average wages could increase in 2020. But, indeed, that is what happened in April. In fact, average weekly earnings of private sector workers in April 2020 were 7.2% higher than in April 2019 and 5.0% higher than in March 2020. How could that happen when nonfarm employment fell by 20.5 million? The answer is that a substantial portion of the job losses occurred among low-paid workers. If this pattern persists, wages may not drop this year.Read more: MarketWatch »
yobiwa zusifugo The average SS recipient currently receives 30%+ the amount they are taxed. So even by this estimate they will receive more than their taxed amounts. Raising the cap on the tax for social security would dramatically improve sustainability of benefits, while only slightly impacting high wage earners.
Start taxing robots that are replacing workers. Robots don’t contribute into the system and corporations have too many loopholes to hide income AOC Inflation will make it irrelevant anyways. Social Security is a Ponzi scheme. So is the retirement fund Ponzi scheme that has dumped trillions of working class wages into the Wall Street 'free' money Machine that is not close to being real.
Fire Trump then. Why would anybody cut benefits? We just print that stuff now when we need it. Did you miss the memo? No need to make any cuts as 25% of Trumps elderly supporters will be dead by the time JoeBiden takes office. ThxRona
Americans take a dim view of raiding their Social Security to cover pandemic expenses, poll findsAmericans want more financial aid from the government. Proposals have ranged from giving individuals as much as $2,000 per month in income to letting them borrow as much as $11,000 from their future Social Security benefits. Here's what voters say they want most. You do what ever is necessary to survive! Pres finds all kinds of money for his personal causes. He needs to do some alternate searching for this one.
Online Ticketing, Social Distancing, and Sanitizer: A Night in the Life of a Drive-In During COVID-19Drive-in movie theaters have been something of a salvation during the coronavirus pandemic. As one of the few entertainment joints that are safe to visit outside of the house, they’ve enjoyed… I thought drive ins died years ago. I mean, that’s what we were told… Welp😐 what is old is new again.
Reopened Graceland gives Elvis fans intimate experience thanks to small crowds, social distancingThanks to social distancing measures and much lower than usual attendance, visitors on the first day were, dare we say, graced with an unusually intimate Elvis experience. Хорошие слова So it hasn't gone out of business ? That's nice
National parks prepare to enforce social distancing on crowded Memorial Day weekendThe National Park Service has begun reopening some big-name national parks closed during the COVID-19 pandemic, but advocates are raising concerns about crowds and limited staffing to enforce social distancing. Most people keep away from strangers to begin with! Also, the American People are not children that need to be chaperoned! Yes, you may have a few people here and there! The question becomes: When do you stop interfering with Individual Rights! Should have never been closed! The National Parks are the American People’s. If you can go to Walmart to buy a tv you can go to the park for a hike The public bathrooms--yuck
Rob McElhenney on the ‘Ethical and Social Responsibility’ of ‘Mythic Quest’s’ Virtual EpisodeRob McElhenney: 'Maybe in about six months from now or a year, hopefully we’re going to see what the ItsAlwaysSunny characters were doing in quarantine, but I have a feeling it’s not what the MythicQuest characters were doing' ♥️ that episode It will fail immediately
California elections officials suggest schools as voting sites for social distancingElections officials from across California say they could use schools for voting this fall if campuses could close from Friday, Oct. 30 through Wednesday, Nov. 4. I used to vote at schools when I lived in Cali, just do mail in so much easier How about PARKING LOTS? Open air, plenty of room. You aren’t already using schools as polling places? 🤦♂️