As a conservative, I have long been in favor of a balanced federal budget and reduction in federal spending. Like most conservatives, I have had my share of disappointments in both Democratic and Republican administrations over my lifetime.
Sometimes I am asked how I can be a fiscal conservative and yet support the Social Security programs, which spend trillions of dollars. My answer may surprise you.
Social Security is not funded by money from the US Treasury. It is a self-financing program. Social Security benefits are paid for by specific taxes placed on working Americans and their employers, starting in 1935 for the retirement program and in 1956 for the disability program. 168 million US workers pay 6.2% of the first $118,500 of their annual earnings into the FICA trust funds. Employers match that with another 6.4% mandatory tax. Self-employed workers pay the entire 12.4% themselves.
Spending for Social Security benefits comes out of two separate trust funds: the retirement and survivors trust fund and the disability insurance trust fund. Money paid to beneficiaries does not increase the federal budget; in fact, benefit payments do not even show up in the US federal budget. Benefits, therefore, cannot and do not increase the government's debt or budget deficit.
Social Security disability insurance (SSDI) is an insurance contract between workers and the Social Security Administration (SSA). The Federal Insurance Contribution Act (FICA), passed in the late 1930s, mandates that each worker must be covered by Social Security Disability Insurance (added in 1956) and must pay taxes to provide this coverage. Very few people, such as some ordained ministers, can opt out of Social Security. Because Social Security coverage is paid for by workers and their employers, it is just as much an insurance contract as your homeowners or auto insurance policy. The only differences are (1) You had no choice about buying the insurance and (2) You have no choice about who you buy it from (you can't shop for better coverage or a better rate).
Therefore, when you file for retirement or disability benefits, you are not applying for welfare or an entitlement. You are merely making a claim on an insurance contract you were forced to buy from the US Government. In my view, the Government sold you the insurance; therefore, they have an obligation to provide the benefits that they promised under the terms of the "policy," just like your auto insurance company is obligated to do.
Sometimes I am asked how I can be a fiscal conservative and yet support the Social Security programs, which spend trillions of dollars. My answer may surprise you.
Social Security is not funded by money from the US Treasury. It is a self-financing program. Social Security benefits are paid for by specific taxes placed on working Americans and their employers, starting in 1935 for the retirement program and in 1956 for the disability program. 168 million US workers pay 6.2% of the first $118,500 of their annual earnings into the FICA trust funds. Employers match that with another 6.4% mandatory tax. Self-employed workers pay the entire 12.4% themselves.
Spending for Social Security benefits comes out of two separate trust funds: the retirement and survivors trust fund and the disability insurance trust fund. Money paid to beneficiaries does not increase the federal budget; in fact, benefit payments do not even show up in the US federal budget. Benefits, therefore, cannot and do not increase the government's debt or budget deficit.
Social Security disability insurance (SSDI) is an insurance contract between workers and the Social Security Administration (SSA). The Federal Insurance Contribution Act (FICA), passed in the late 1930s, mandates that each worker must be covered by Social Security Disability Insurance (added in 1956) and must pay taxes to provide this coverage. Very few people, such as some ordained ministers, can opt out of Social Security. Because Social Security coverage is paid for by workers and their employers, it is just as much an insurance contract as your homeowners or auto insurance policy. The only differences are (1) You had no choice about buying the insurance and (2) You have no choice about who you buy it from (you can't shop for better coverage or a better rate).
Therefore, when you file for retirement or disability benefits, you are not applying for welfare or an entitlement. You are merely making a claim on an insurance contract you were forced to buy from the US Government. In my view, the Government sold you the insurance; therefore, they have an obligation to provide the benefits that they promised under the terms of the "policy," just like your auto insurance company is obligated to do.
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