Via Rick Perry – The first step to fixing a problem is honestly admitting there is a problem.  America’s goal must be to fix Social Security by making it more financially sound and sustainable for the long term. But Americans deserve a frank and honest discussion of the dire financial challenges facing the nearly 80-year-old program.

As I said at the Reagan Library recently, Social Security benefits for current recipients and those nearing retirement must be protected. For younger workers, we must consider reforms to make Social Security financially viable.
These are the hard facts: Social Security’s unfunded liability is calculated in the trillions of dollars. Last year, annual Social Security outlays exceeded annual revenues for the first time since 1983. The Congressional Budget Office projects that outlays will be roughly 5% greater than revenues over the next five years, worsening as more and more Baby Boomers retire.
By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented. Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?
I am going to be honest with the American people. Our elected leaders must have the strength to speak frankly about entitlement reform if we are to right our nation’s financial course and get the USA working again.  For too long, politicians have been afraid to speak
honestly about Social Security. We must have the guts to talk about its financial condition if we are to fix Social Security and make it financially viable for generations to come.
Americans must come together and agree to address the problems so today’s beneficiaries and tomorrow’s retirees really can count on Social Security for the long haul.  We must have a frank, honest national conversation about fixing Social Security to protect benefits for those at or near retirement while keeping faith with younger generations, who are being asked to pay.   (article)

By Ross Kaminsky – Republicans know there is no “trust fund.” So why play footsie with the left instead of arguing for permanent cuts?
The Hill is reporting that “President Obama’s push to extend a payroll tax cut has united a rare combination of conservative Republicans and liberal Democrats in opposition.” In particular, Pete Sessions (R-TX), chairman of the NRCC, suggests that a payroll tax cut risks the solvency of Social Security.
This is the wrong argument and Republicans are falling into a trap by accepting it.
The case against extending the tax break due to impact on the “trust fund” is misleading at best. There is no trust fund, at least not in a way that anyone other than a politician would understand one, because Congress has spent 100% of the prior decades’ Social Security surpluses rather than actually saving the money.
In other words, the Social Security system’s operating deficit, which occurred in 2010 for the first time since 1983 and is likely to occur every year in perpetuity, will require the gap to be filled in by any tax revenue the government collects, such as federal income tax, corporate income tax, estate tax, etc. The so-called “trust fund” simply holds government bonds which the government will have to tax citizens (again) to convert into actual cash. (This is why you should disagree vociferously when a Democrat tells you that a government bond is the same as cash.)
If we had a public education system that actually taught American history, people might not be surprised to learn of the few major cases related to the constitutionality of Social Security, particularly the 1937 case of Helvering v. Davis in which the Supreme Court ruled that the program is not a contract, not insurance, and not investment; payroll taxes are general revenue like any other income tax and it is only political realities which make Social Security seem like an “entitlement” in the literal sense of that word. In theory, government could end Social Security without citizens having a legal leg to stand on to save it. In practice, it’s been government’s piggy bank, masking what would have been even larger federal deficits.
Therefore, a cut in the payroll tax is no different than the same cut in the income tax rate except for issues of caps on how much income is subject to which parts of the payroll tax. It may look different on the government books with a cut in the payroll tax reducing the income to the Social Security system and increasing its apparent deficit, but if the choice is reducing the payroll tax or the income tax, then you’re just choosing which deficit you want to increase because the government’s total revenue and total liabilities are the same. If there were an actual Social Security Trust Fund, the situation might be different. But today what we’re dealing with is nothing more than shady accounting practices for which a public company CEO would go to jail.
Republicans should make this point very clear, even though they have culpability as well: There is no trust fund, and government cannot be trusted to maintain one. This is why Social Security must be reformed into personal accounts with property rights.  (continue reading)