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BumRushDaShow

(145,167 posts) Fri Dec 13, 2024, 08:46 AM Dec 13

O'Malley: Calling Social Security a 'legal Ponzi scheme' is bull

Source: The Hill

12/13/24 6:55 AM ET

Social Security is not on a path toward bankruptcy, nor is it a “legal Ponzi scheme,” according to former Maryland Gov. Martin O’Malley. Sen. Ron Johnson (R-Wis.) previously called Social Security a “Ponzi scheme” in one of many attacks on the program, but O’Malley argues that’s “bull.”

“It’s been stable for 89 years. If it’s a Ponzi scheme, as Senator Johnson says, it’s the longest-running Ponzi scheme in world history,” he said during a Thursday appearance on “The Hill.“

O’Malley recently stepped down as Social Security Administration commissioner to run for chairmanship of the Democratic National Committee. “Social Security is not on a path for bankruptcy or insolvency,” O’Malley added. “The dollars that people pay into it are the dollars that are paid out.”

The Senate is pushing toward a vote on legislation that would provide full Social Security benefits to almost 3 million additional people. Senate Majority Leader Chuck Schumer (D-N.Y.) said Thursday that he would begin the process for a final vote on the bill, known as the Social Security Fairness Act, which would eliminate policies that currently limit Social Security payouts for roughly 2.8 million people.

Read more: https://thehill.com/homenews/5038527-martin-omalley-knocks-social-security-critics/

10 replies

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Highlight:

O'Malley: Calling Social Security a 'legal Ponzi scheme' is bull (Original Post) BumRushDaShow Dec 13 OP

Johnson, voted worst Senator, and dumbest, of all time! machoneman Dec 13 #1

Too dumb to understand how insurance works, apparently William Seger Dec 13 #3

Remove the cap - TBF Dec 13 #2

What are "the policies" that limit it for 2.8 million people? TIA. mobeau69 Dec 13 #4

It could be denial of Social Security to people who receive retirement benefits from another source, YodaMom2 Dec 13 #5

My wife did the same in the work place and has teacher retirement,and receives SS Bengus81 Dec 13 #8

This message was self-deleted by its author YodaMom2 Dec 13 #10

The "Windfall Elimination Provision" (1983) passed as an amendment to the Social Security Act BumRushDaShow Dec 13 #6

"Social Security is not on a path for bankruptcy or insolvency," elleng Dec 13 #7

Well, there's no such thing as a "legal" Ponzi scheme TexasBushwhacker Dec 13 #9

machoneman

(4,128 posts)

1. Johnson, voted worst Senator, and dumbest, of all time!

Reply to BumRushDaShow (Original post)

Fri Dec 13, 2024, 09:00 AM

Dec 13

William Seger

(11,149 posts)

3. Too dumb to understand how insurance works, apparently

Reply to machoneman (Reply #1)

Fri Dec 13, 2024, 10:01 AM

Dec 13

TBF

(34,843 posts)

2. Remove the cap -

Reply to BumRushDaShow (Original post)

Fri Dec 13, 2024, 09:15 AM

Dec 13

should have never been a thing. Folks should be taxed on all the income, and what goes into Social Security should be a lock box. The Senate should take responsibility for their part in not managing it properly. And Ron Johnson is an idiot.

mobeau69

(11,723 posts)

4. What are "the policies" that limit it for 2.8 million people? TIA.

Reply to BumRushDaShow (Original post)

Fri Dec 13, 2024, 11:42 AM

Dec 13

YodaMom2

(57 posts)

5. It could be denial of Social Security to people who receive retirement benefits from another source,

Reply to mobeau69 (Reply #4)

Fri Dec 13, 2024, 11:52 AM

Dec 13

even though they paid into the system in the past.

For example, my sister is a retired teacher. She worked for *years* in the private sector, paying into Social Security all along. Teaching was a second career. But since she receives a retirement from her years as a teacher, she’s ineligible to receive Social Security, even though she paid into it. They consider it “double dipping”.

Bengus81

(7,561 posts)

8. My wife did the same in the work place and has teacher retirement,and receives SS

Reply to YodaMom2 (Reply #5)

Fri Dec 13, 2024, 04:51 PM

Dec 13

Was your sister paying into a teacher retirement fund?

Not sure what this is all about but it evidently doesn't affect everyone in that similar situation.

Response to Bengus81 (Reply #8)

YodaMom2 This message was self-deleted by its author.

BumRushDaShow

(145,167 posts)

6. The "Windfall Elimination Provision" (1983) passed as an amendment to the Social Security Act

Reply to mobeau69 (Reply #4)

Fri Dec 13, 2024, 12:08 PM

Dec 13

(snip)

This provision eliminates gaps in protection for Federal employees, particularly those who shift between Federal employment and jobs already covered under Social Security. In addition, over the long run, windfall Social Security benefits will be eliminated for these employees. The provision increases revenues by $9.4 billion for 1984-89 and has a long-range saving of .28 percent of taxable payroll.

(snip)

Prohibit Termination of Coverage of State and Local Government Employees

Prohibits States from terminating coverage of State and local government employees if the termination has not gone into effect by the date of enactment (4/20/83). Under prior law, a State could terminate coverage for groups of State and local employees by giving 2 years' advance written notice, providing the coverage had been in effect for at least 5 years. Also, permits State and local groups whose coverage has been terminated to be covered again. Prior law prohibited a terminated group from being covered again. This provision avoids gaps in protection for State and local employees (and their families) whose coverage would otherwise have been terminated. Further, it reduces the loss to the trust funds due to payment of "windfalls"--benefits which represent a high return on Social Security taxes for terminated workers compared with the lower return for those with a lifetime of covered work. The provision increases revenues by $3.2 billion for 1983-89 and has a long-range saving of .06 percent of taxable payroll.

(snip)

https://www.ssa.gov/history/1983amend2.html

Basically, anyone who had a job that collected the SS payroll tax and that individual also had a work history in a job that wasn't covered under SS (generally federal/state/county/municipal government workers and some non-profits - at least pre-1980s), then when it comes time for retirement, the eligible SS payout portion might be reduced or eliminated as a "windfall" for that person, which would be in addition to the retiree's regular pension/annuity (even if the person had been fully vested with at least 40 quarters in SS).

This new legislation would repeal that provision.

elleng

(137,251 posts)

7. "Social Security is not on a path for bankruptcy or insolvency,"

Reply to BumRushDaShow (Original post)

Fri Dec 13, 2024, 03:40 PM

Dec 13

. O’Malley added. “The dollars that people pay into it are the dollars that are paid out.”

TexasBushwhacker

(20,777 posts)

9. Well, there's no such thing as a "legal" Ponzi scheme

Reply to BumRushDaShow (Original post)

Fri Dec 13, 2024, 05:18 PM

Dec 13

Social Security's current solvency problems are created by the income inequality that's been growing for the last 40 years. They figured out a long time ago that in order to remain solvent in perpetuity, 90% of all wages need to be subject to Social Security tax. Right now, I believe it's around 83%. They could eliminate the cap, raise it dramatically, or create an untaxed "window" where incomes up to $200K (for example) would be subject to SS tax, then it wouldn't kick in until over $500K. They could adjust the untaxed window as needed.

They also need to get rid of "stepped up basis" for all heirs but spouses. That's a racket that perpetuates dynasties. I thought we left that behind when the pilgrims came over from England.

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