AMERICAN ISSUES: Social Security By GLENN MOLLETTE

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Glenn_Mollette_PhotoIt is not my goal
to discuss the history of the Social Security Act. Social Security started out
as a great idea in 1935 under the direction of President Franklin D. Roosevelt.
Generations of people have received more from Social Security than they ever
put into the system. It has saved millions of seniors from cruel poverty.
During the '30s at least half of the seniors in this nation who retired,
retired in poverty. The idea of Social Security made it possible for them to
survive.

I believe we can
keep Social Security solvent but we cannot continue business as usual. The
money paid into Social Security must stay in the Social Security system. We
cannot use the money for anything else and expect to have money to pay our
retirees.

Imagine trying to
save $10 every week to buy someone a Christmas present. You take the money
instead and make a needed house repair. It would be understandable that you
might have a house emergency but then the money for the Christmas present is
gone. You have few options if you are now to buy the Christmas gift. You can
borrow money on your credit card and spend the next year trying to pay it back.
You might borrow it from a friend, which I never recommend. You can give a much
less expensive Christmas gift. Or, you inform the intended recipient that you
had to spend the Christmas money on a very important house issue and hope they
will understand. In many cases the average person would understand if it were
an emergency expenditure.

They might not be
as understanding if you spent the money on golf clubs, pricey business lunches
or a couple of dress suits.

Americans
expecting to receive Social Security payments at retirement age will not
understand, under any circumstances, if the money has been spent on something
else regardless of the expense. 

Can you imagine
loading up a bus with seniors in Florida for a trip to California? They each
pay $400 to cover the trip. When the bus gets to Las Vegas the driver stops at
one of the casinos and gambles away all the money that was collected for the
trip. The bus and the seniors are stuck in Vegas. They are broke and have
nowhere to go. His one option might be to book another trip with some seniors
in Vegas to take them somewhere and then he uses their money to go on to
California and then return to Florida with his first group. He now has the
problem of returning to Vegas to pick up the people waiting on their trip, but
he has to come up with the money he already spent on the return trip to Florida.
It becomes an ongoing cycle of madness.

Mismanagement of
Social Security income will only further leave this nation of seniors broke
with nowhere to go.

If through the
years our country had collected the Social Security money from the people and
wisely invested it, we would not have the troubles we have today with the
system. The government has taken our money and used it for other ventures. Now
we have to listen to the government's excuses. We hear that Social Security is
broken. We hear there are too many people on the receiving end. We hear that
there is not enough coming in and too much going out. 

Currently there
is still enough money to pay the massive number of people receiving Social
Security. Actually, there is more than enough. Historically the excess Social
Security receipts are not invested into the system, but go into the
government's general fund and are spent on wars or any other projects the
government deems necessary. Thus, we are living hand to mouth. Social Security
recipients are dependent on the working people to pay the taxes so that the
government can in turn pay out the benefits. As baby boomers retire, the
population of retirement age individuals is much greater than those who are
paying taxes. Therefore, we are in trouble.

Social Security
can be saved if we put the money aside. We have to keep it away from Wall
Street
and big banks. They have proven to us how inept they are at managing
money.

Our work force
has declined. It takes working people to pay into the Social Security system.
Even with the current employment force we are making the monthly Social
Security payments. Can you imagine if we had an extra 25 million people in the
United States employed and paying into the Social Security system?

We cannot pay
Social Security/ Medicare benefits to those who have not paid into the system.
If people moving into our country elect out of the Social Security system they
should do so within 12 months of becoming eligible to hold employment in the
United States. Citizens of the United States who choose to remove themselves
from the Social Security system should declare by age 25 that they are not
going to participate. People should be required to participate in the Social
Security system for at least 10 years if they are going to be recipients of
Social Security benefits. This of course excludes those who become disabled and
are entitled to receive disability benefits.

We can continue
on our current course but it's a highway to pain. We have to think about our
children and grandchildren. Do we want them to have Social Security? On this
path they will not enjoy the benefits we enjoy today. Some possibilities for
saving the Social Security system so that our children and grandchildren might
have something are as follows:

1) Make 66
the magic normal retirement age and eliminate the early retirement benefit at
62. This sounds outrageous to people counting on Social Security at age 62. If
we do not make some changes, the age of receiving maximum Social Security
benefits will be pushed up to age 70 if not higher. Benefits received at age 62
will be pushed up to 64 or 65. If we will forgo the early Social Security
benefit at age 62 we can preserve retirement at age 66. This would keep people
working four more years, however, it would mean a stronger benefit at age 66.
This would also pump more dollars into the Social Security system. The Social
Security benefit doesn't pay enough when taken at age 62. However, if people
will wait the additional four years it will keep our Social Security system
solvent. There will be more people receiving Social Security than will be
paying into the system by 2036 making the program lopsided. A person would
receive full benefits at age 66. This would keep people in the workforce a
little longer. However, allow those who have paid into Social Security for at
least 30 years to be exempt from FICA (Federal Insurance Contributions Act) and
federal income tax while they are ages 64-65. This would be like getting a nice
pay raise during these years of employment and would be a gift from the
government for working a little longer. The government is not receiving the
FICA and federal taxes from this group but by the same token is not paying it
out to them in Social Security until age 66. It's a win for the citizens and
the country. Also, at 66 when individuals begin receiving their full Social
Security they should not have to pay tax on their Social Security income since
they have already paid on it in prior years.

2) Stop
nation building around the world. The money that is paid for nation building in
places like Iraq, Afghanistan, Pakistan, Syria and so forth costs us billions
and billions of dollars. This money comes out of the treasury that makes the
Social Security payments. If we were not trying to be the savior of the world
we would have more money to take care of our seniors.

3) Stop
unnecessary wars. Billions of dollars have been spent on wasteful wars. If we
need to go to war then we should go and end it as quickly as possible instead
of spending years and billions of dollars.

Stop the foreign
aid. I'm in favor of helping anybody who needs real help. However, we are
giving money we don't have. In many cases we are giving money to people who
hate us. We should not have to give money to buy friends. We can continue to
enjoy Social Security for years to come if we cut out all the money we give
away to overseas dictators and nations who already hate us. Giving them money
does not make them love us anymore.

Abolishing the
Social Security system would financially destroy this nation since most
retirees now depend on Social Security to survive. Therefore it is imperative
that we make it better and more sustainable.

Medicare

My first wife,
Karen was on Medicare and for two brief periods she was a Medicaid recipient.
It's strange how things in life turn out. Lyndon Johnson, The President who
brought Medicare and Medicaid into existence is the one I waved to on the
streets of Inez when I was about nine years old.

After fighting
multiple sclerosis for about three years she knew her school teaching days were
over. She applied for disabled Social Security benefits. The application and
wait time for approval was about 18 months. Her monthly check from Social
Security was $550. She also received her Medicare card. Previously she had lost
her medical coverage. After she left her teaching position we bought into COBRA
for several months but lost that because the insurance company was going
through bankruptcy. The company folded and reorganized under a new name. In the
process they dropped people like Karen who were going to be expensive to cover.

Losing health
care insurance on the one person in the family who needed it was painful. My
two sons and I could scrape the money together to buy health care insurance,
but no insurance company would cover Karen due to her debilitating multiple
sclerosis.

In many ways,
Medicare was a lifesaver but most of the MS drugs weren't covered. In 1994 one
of her drugs cost us over $1,000 a month. Another drug cost over $1,200 a
month. At the time my total salary as a pastor was about $36,000 a year. This
included all benefits and perks. Saying we were stretched financially would be
an understatement.

After battling
the progressive disease for eight years Karen's health had deteriorated to the
point where she could not do anything. She could not feed herself. Her hands
and head became very shaky. She could not walk. She couldn't do anything. After
a brief hospital stay she ended up in a nursing home for six months. That was
six tough months as written about in my book, Nursing Home Nightmares,
America's Disgrace.

Medicare only
covers a limited number of days in a nursing home. At the outset we did not
know how long she would be in the nursing home. We applied for Medicaid. I
didn't know anything about it but I was encouraged by the nursing home staff to
get Medicaid. I went to our local county social services office. This was the
same office where people applied for food stamps and other forms of public
assistance. Sitting in that office waiting my turn was not a great feeling. I
had never asked for anything like this from the government before. The woman
who worked with me was very helpful. Basically Karen would be the one going on
Medicaid. We were paying on a house and making a car payment. We didn't have
any money stashed away, but we had lots of debt and now a $4,500 a month
nursing home bill. This made us approvable for Medicaid.

After finally
getting out of the nursing home, Karen went off Medicaid since we were no
longer entitled to it. About 14 months later she would have to go back into a
different nursing home for about the last 10 weeks of her life. I would once
again go through the same paperwork application and interviews once again
because Medicaid was our only hope of paying for her nursing home bills.

It was such a
painful time for my sons and for me. However, millions of Americans have been
there and done that or are doing it now.

The numbers are
always changing but currently there are 44 million people on Medicare and
another 40 million on Medicaid.

Medicaid is for
the down and out. People on Medicaid are the disabled or the very financially
poor of society. I don't think the majority of Medicaid recipients are pleased
with their situations in life. I believe they want to get off Medicaid if they
can. In cases of disabling illness they cannot get by without Medicaid and our
society should help them. There are situations where people become dependent on
the system and will not try to improve their lives to move beyond the system. This
latter group represents millions. The drain on the federal budget is in the
billions.

Too many doctors
are extremely lenient in signing the papers needed to achieve disability
status. Too many people have become accustomed to poverty and surviving on very
little. If you are financially needy enough, as determined by state guidelines,
then you can qualify for Medicaid.

Local offices are
overworked and understaffed and so it's difficult in most cases for any
recipients to have anyone working to help them get off Medicaid.

I am in favor of
Medicare and Medicaid.

We have to repair
the system or there will be nothing for our children and their children.

I don't think
anyone should be forced to use Medicare. If someone wants to opt out of
Medicare at a younger age then I believe that should be his or her prerogative.
The reality is that most people at retirement age need Medicare. Health care
insurance has become unaffordable for the average person and the premiums are
climbing every year. The co-pay insurance plans that people are buying now to
supplement their Medicare is becoming unaffordable for many.

One of the
biggest problems with Medicare is the medical cost. Recently, a doctor was
going to perform a medical procedure on me. He informed me he would have to
submit a bill to my insurance company three times the amount he really needed
in order to get what he wanted for the procedure. That's crazy and is part of
the big problem. Not all but certainly some doctors and hospitals are grossly
abusing the system.    

I heard about one
nursing home owner who went to prison because his nursing home unjustifiably
billed Medicare and Medicaid for hundreds of thousands of dollars. He was
billing for services that were never rendered. 

If we can
eliminate the fraud and the abuse by the medical society we would save billions
of dollars each year. 

Long-term health
care insurance must be made competitive across the country. Insurance companies
should be able to sell from state to state. Citizens should be able to buy from
any state in the country. Competition would be great for the business, the
people and the economy. 

Second, insurance
companies must develop term health care insurance much like term life
insurance. Someone buys a 20-year term policy and it covers your health care
insurance for a cheaper rate because you've bought it for 20 years. Someone
could buy a policy at 50 designed to provide coverage to age 70. If we could
get people off Medicare until they are 70 it would save the nation billions.
Many seniors are living very productive lives well into their 70s. If a senior
could buy a term health care plan that would cover him or her to 70 before switching
to Medicare that would be huge in solving part of the system's crisis.  

Glenn Mollette is
the author of American Issues: Every
American Has An Opinion
and nine other books. He grew up in Martin County,
Kentucky, and in 1964 was a child when President Lyndon B. Johnson visited the
county seat of Inez to begin his campaign on poverty.  You can hear him
each Sunday night on XM Radio on channel 131  8 EST. Find him on Facebook.
Direct email to gmollette@aol.com

eHeziAMERICAN ISSUES: Social Security By GLENN MOLLETTE

Comments 4

  1. in adddition to the above the tax code has to
    be reformed to eliminate preferences that most
    americans cannot take advantage of…carried interest
    for example which turns earned income into capital
    gains at a far lower rate …the home mortgage deduction has to be limited as well and the deduction
    for second homes has to be severely curtailed ..when
    we allow people to take advantage of the current
    loopholes it is the same as “spending money” because
    if you don’t collect the revenue its the same as
    making an expenditure of that amount…corporations
    have to pay taxes and penalties assessed for offshore
    avoidance…couple these with the suggestions above
    and you have a solution to the deficit

  2. the above article does not set forth a way to fix
    our ever increasing deficit which is driven by
    our entitlement system. But here are a few examples
    of what can be done to fix the problem. And these
    suggestions would be phased in over the next twenty
    years so that the pain was not instantly felt by
    present seniors and or those close to retiring.
    1. means test both social security and medicare
    with the excpetion of catastrophic illnesses..so
    for example if someone is earning in excess of 500,000
    a year he starts to lose some but not all of his benefits until some point where he gets none because
    he doesn’t need it…this would phase in gradually
    but social security was never meant to pay the club
    dues for the super rich it was always intended not
    as a savings plan but as a safety net
    2. lift the amount upon which everyone has to pay FICA
    from 113,000 to unlimited..there is no reason that
    the payroll tax should stop and particularly no reason
    that it should be the most regressive of all the taxes
    we pay
    3. gradually raise the retirement age from 62 to 65
    and the full benefits kick in to 72 from 70 over the next 20 years based on longevity tables that
    tell us that people can now expect to live into their
    80’s. these ages were set in the 1930’s and are no
    longer meaningful
    if we gradually phase in these modifications so that they are in place by 2033 and the problem goes away
    and both social security and medicare would be fully
    funded and on sound footing

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