Research Paper on "Model Applied to Social Security Income SSI"

Research Paper 7 pages (2001 words) Sources: 3

[EXCERPT] . . . .

SSI Income Analysis

The Social Security income system, both disability and retirement, has been enjoyed by many retired and disabled persons over the years as a source of income for times of retirement and disability. However, insolvency concerns brought on by the crushing number of baby boomers who will be retiring over a relatively short period of time as compared to the number of people that will be paying into the system over the same time period is going to lead to a very hard decision within the next few decades as the amount of money funding the system and the government in general will likely not be enough to fund the benefits for the people that will be expecting them.

The Problem & Its Causes

Social Security itself has been around for the better part of a century. Brought about during the Great Recession and the FDR administration, it has evolved and changed greatly over the year. Originally intended as a supplement to the lives of disabled and retired persons, the income stream is now the sole (or close to it) means of subsistence for many vulnerable retired and disabled persons around the country. The reasons for this reach very deep into the fabric of society and thus will make any wide-ranging or widely-impacting solutions very hard to implement without a lot of blowback.

Values & Beliefs as a Social Problem

One of the major reasons why changing the Social Security program massively, even with the insolvency issues presenting themselves, is that Social Security and the level of benefits currently enjoyed by current beneficiaries is viewed by many in society as a social contract and a benefit that cannot be taken away or massively reduced. The problem with Social Security is not all that different from similar issues with pensions (mostly public) and Medicare, which are facing much the same funding issues. There is a glaring mismatch between the solvency levels of the programs and their ability to provide guaranteed benefits and the expectation of current or future beneficiaries of full benefits being paid regardless of whether the funding is there or not.

How Big a Problem and Why

The insolvency problem with Social Security is already rearing its head now and it's only going to get worse before the program is truly out of money. One example of this in motion is people who exhaust their nearly two years' worth of unemployment benefits and then turn to Social Security Disability as a source of income although that was not touched in the first two years of unemployment. Many say one of the problems with the solvency of Social Security is that many people are gaming the system and applying for benefits when they are not entitled to them. This condition applied much more to disability than it does retirement as the eligibility criteria for retirement income is pretty simple and hard to fake. Another issue is the concept of people relying on Social Security too much instead of using it as a supplement, as was the original stated intent of the program even if those words were mostly spoken several generations ago.

Even with the facets of the debate above, the top-heavy nature of the national demographics is something that cannot be debated or explained away. The national birth rate in the United States was massive after the end of World War II and then cut in half during the 1960's, culminating during the Vietnam War. What this means to America is that there is a very large amount of people right now that are nearing retirement age and the generation or two behind these "baby boomers" is not nearly as significant number-wise as has been the case with prior generations. As such, the amount of people supporting the pay-ins to the Social Security system is not as much as is has been in the past, all else equal.

Who Has the Power

The power to change this condition with Social Security ultimately resides in Washington DC. The Supreme Court may or may not have to review any legislation concocted and the President of the United States (currently Barack Obama) has veto power over anything not passed with significant enough a majority. However, the initial and ultimate power to construct and pass any major changes would fall with the United States Congress. The current state of affairs in Congress makes any major changes to Social Security very unlikely due to how the power current falls. The Democrats, along with the Presidency, control the Senate although it is by no means close to a super-majority. The House of Representatives has been controlled by the Republicans since the seismic shift in seats that occurred in 2010 during the midterm elections at the time. President Obama has since secured re-election and the Democrats made gains in both the House and the Senate, although not enough to change the balance of power in either house of Congress.

Muddying the waters further is that Social Security is one of those "third rails" of politics. Meaning, it is an issue and a policy that gets absolutely demagogic and vitriolic responses when it is mention in certain circles or in certain ways. Anyone who mentions that the program's expenditures need to be cut is often accused of trying to "kill" seniors or otherwise leave them in destitution. That may seem alarmist and unrealistic but it does happen.

Social Work Implications

Whether it is through intentional and arbitrary cuts or whether it is from the money simply running out, the implications of this debate to the social work sphere is quite clear. The current social work maelstrom that exists surrounding urban and ghetto areas will mushroom to anyone and everyone who relies on Social Security income heavily because their main source of income will either be eliminated or at least reduced. This would bring a lot of weight upon the social work sphere which is already weighed down with a populace that ballooned during the Great Recession and was already at its limits before 2008 when that came around.

Solutions

It is easy to say that social workers could do more but that is a bit unrealistic given what it is at stake and what could truly happen here. In the end, the problem that Social Security is facing will have to be addressed by a society as a whole because the options that exist within the government and social work sphere will not be enough to address this. A lot more retired Americans will have to live with their children and/or in other more low cost arrangements because if the money is not there, it is not there.

If nothing is done, the benefit levels for Social Security will simply have to drop because the money will not be there. As such, the legislative solutions that could be implemented in the interim are to raises taxes to bridge the shortfall or reduce benefits sooner so that the impact is lessened over time. Raising taxes may seem attractive to some but one cannot get blood from a turnip and raising taxes too much would kill economic activity and growth and would lead to a much bigger problem. Lowering benefits on people that greatly need the money, even if the programs original intent was never to be a main source of income, is also not going to be socially palpable either.

That being said, there are some solutions that can be delivered. First, the current cap on Social Security tax, which is not paid beyond $110,100 for any taxpayers (no matter what the income level) needs to be raised (SSA.gov, 2012). The cap in question was removed from Medicare tax back in the 1990's and the same needs to be done for Social Security (SSA.gov, 2012). Second, the Social Security payout system will probably need to be means-tested. People above a certain income/wealth level will probably need to be excluded from the system as the program will have to be focused more on people who have little to no income or other economic resources. Third, eligibility requirements for Social Security Disability need to be reined in so that people are not actively sponging off the system. People that genuinely need the money should get it but people using it as a way to not return to work when they can and should need to be cut off.

Fourth, Social Security recipients may want to live autonomous lives and not live with someone else, but they need to consider that if they did not otherwise prepare for retirement. There is a fine line between having a social contract fulfilled and relying too much on the government when saving for retirement and other responsible financial measures were not taken as they should have been. Fifth, all of the redundant programs that exist in the federal and state spheres need to be condensed and simplified so that money is not wasted where it should not or cannot be spent. Again,… READ MORE

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