Will Trump or Any President Cancel Social Security? No!

Political divisiveness is rampant in the media and internet websites. Some stories are promoted by political parties/groups and some may be supported by foreign interests.

Here is what you should be sure of. Trump will never support “getting rid of Social Security.” No one in Congress will vote for that even if any President wanted to.

Recently, Trump DID SAY he wanted to get rid of the “payroll tax” which primarily partially funds Social Security. That reflects his view (shared by many over the years) that the payroll tax (15% of wages) is very unfair and regressive. That applies to the first $137,700 of wages irrespective of income. Therefore, someone making $25,000 pays the same 15% as someone making $250,000. In fact, higher incomes stop paying above the threshold. Many economists feel it has become unfair.

Currently, those taxes are earmarked for Social Security. In the Federal Budget, all the funds are commingled. Future planned benefits cannot be paid out of funds set aside. There are not enough funds and those funds are not segregated. It has been a long standing fraud on Americans to suggest SS benefits were safely set aside. They simply are not.

What Trump wants to do (and has always said so) is to fix an unfair tax, and, find a way to honor the commitment to beneficiaries.

Any reasoned analysis of Social Security shows there are long standing problems with paying these benefits. It has to be fixed. Like many issues, Trump wants to fix it even though it will be hard and want to be avoided by the politicians that created the mess.

For my friends who are in Illinois, the pension crises for state and local employees in Illinois is much much worse due to chronic bad policies regarding excessive pension benefits, state budgets and funding. While Illinois is only one state, the lack of funding to pay pensions to state employees is almost as large as the unfunded benefits in Social Security.

Details:
15% payroll tax for Social Security and Medicare is jointly paid by both employee and employer.

The max income threshold of $137,700 applies to SS tax (called FICA) and there is no cap on Medicare tax.)

Illinois is a Fiscal Train Wreck

When Illinois voters consider their choices in the next several weeks, it is important that they decide whether to hold incumbants accountable for their financial responsibility.

Just a few days ago, the Civic Federation of Chicago disclosed that the delayed funding of the state's pension obligations will cost taxpayers $12 billion vs the $3.5 billion that was not funded in the fiscal 2011 budget (source COGFA). Earlier in September, the Civic Federation was quoted on the NPR website:
 
"The financial condition of the state of Illinois is a fiscal train wreck," says Laurence Msall, president of the Civic Federation, a Chicago-based nonpartisan, not-for-profit group[ http://www.civicfed.org/ ] that analyzes and researches state and local government budgets.
 
He says Illinois' fiscal problems are not simply the result of a bad economy.

"The state's train wreck is caused by inaction and dereliction of duty in Springfield; the failure to provide a balanced budget," Msall says, adding that Illinois' last two governors and the Democratic-controlled state Legislature haven't cut spending to match declining revenues. In fact, he says, they keep spending more.

Illinois By the Numbers; Chicago Tribune

An Opinion Piece today in the Chicago Tribune provides insight into where Illinois stands relative to other states. Several important ideas from the analysis assembled by the Tribune:

• One of the worst states for job creation and business confidence
• The WORST state for funding its employees pension obligations
• The state with the most units of government
• Not effective in providing public education
• 29th in the US out of 50 in voter turnout
• 29% of the state budget (3rd in US) spent on Medicaid (health care for the poor) which provides health services/benefits to 1 in 5 people in IL.

Simple Campaign Finance Reform in Illinois

There is a fun suggestion going around the internet about how to reform politics in Illinois. It involves establishing a two term limit in Illinois. One in office and one in jail. Being serious for a moment, there is a quite simple solution that would dramatically reduce corruption. When all else fails, stay simple.

NO one may contribute to an Illinois election campaign more than $2,500 per campaign cycle. Only legal residents of the state of Illinois may make such contributions. No contributions to any IL political campaign, whether in-kind, or in cash, may be made by any party, committee, business or any other organization. Any organization may organize and encourage individual contributions of its members.

Now, every current politician and lobbyist in Illinois will suggest dozens of reasons why the simple formula above can't possibly work. But, ask the citizens if it works. Ask actual voters what is wrong with the above? Then listen carefully what voters say and who says it.