United We Stand, Divided We Fall

In order to insure the long term solvency of the Social Security Retirement Program, there are many steps that might be taken to accomplish this important national priority. However, the options to reach this important goal come down to increasing the social security taxes to support the program or lowering its expenditures and in effect the benefits of the program.

We, at United We Stand, LLC. are recommending the following steps.
For tax increases to support the Social Security Program

1. Remove the 2% employee contribution hiatus. This would produce $112 billion annually. This has been done. Wonderful!
2. Remove the exemption from social security taxes on salary reduction plans. This step is unscored.
3. Subject Flexible Spending Account withholdings to Social Security Taxes.
This step is unscored.
4. Subject Cafeteria Plan Employer expenditures to Social Security Taxes. This
step is unscored.
5. Subject commuting Employer expenditures to Social Security Taxes. This
step is unscored.
6. Subject Health Insurance Employer expenditures to Social Security Taxes. This
step is unscored.

For lowering the expenditures on social security,
1. Increase the age when full social security benefits can be taken. The present age is
66 to 67 depending on your date of birth. Increase the age for full social security
benefits to 70 (phase in starts in 2023 and is finalized in 2040). This will cover
44% of the Social security shortfall.
2. Increase the age when full social security benefits can be taken using a longevity
Index starting in 2041. This will cover 23% to 27% of the social security shortfall
depending on the details of the plan.
3. Freeze social security payments for 3 years. This will save $13 billion in FY 2014,
$30 billion in FY 2015, and $48 billion in FY 2016. There will be no retroactive
adjustment in the future to make up for this freeze.
4. Change the cost of living escalator from the CPI to the Chained CPI. This will
cover 23% of the Social Security shortfall. It will also reduce expenditures by
$11 billion per year.
5. Increase the number of years in the wage history used to calculate social security
benefits from 35 years to 38 years. This will cover 13% of the Social Security
shortfall.
6. Make the social security benefit calculations more progressive than they currently
are using the Simpson Bowles Plan. This will cover 45% of the Social Security
shortfall.
7. Reexamine the disabled for recipients who can now work. For each 10% found to
be able to work, expenditures fall by $14 billion per year. The estimates range
from 33% to 67% of the disabled can work. This generates between $47 billion to
$94 billion annually.

By taking these steps, we move the social security program to a stable and solvent position in the long run. In addition, we decrease the deficit by $71 billion in FY 2014, $88 billion in FY 2015, and by $106 billion in FY 2016 and help to avert the insolvency of our country.

One final step needs to be taken. To prevent future problems, we must put into law that any insolvency of the Social Security Trust Funds noted in the annual report issued by the Trustees of the Social Security Trust Funds must be addressed by the Congress and the President. Any solvency issue not addressed by the Congress and the President by December 31 of the year the report is issued will result in the stoppage of pay for the Congress, the President, and the President’s cabinet. Once the pay stops, no retroactive restoration of that pay will be allowed. Pay will be resumed when the solvency issue is addressed.
Harry Pukay-Martin December 9, 2013