Wednesday, May 11, 2016

How Secure Is Your Social Security

Recently I heard from a well-informed source about a change that is going to take place by eliminating the word "entitlement" from the Social Security Act.  The word "entitlement" is a legal term that mandates the government to keep paying social security and Medicare regardless as to whether or not the social security trust fund has money.  Eliminating the word "entitlement" is going to open the door for the government to reduce payment to present retirees and possible denied payment to future social security recipients. Propaganda will  focus on the fact that social security is running out of money and to convince younger workers that social security is not going to be there for them.

Talk to "privatize" social security is nothing new. But, the reality of actually reducing or denying payment?  I felt that I needed more proof so I decided to check it out on SS.Gov. And, there it was, plain as day. Congress can change the rules regarding eligibility; the rules can be made more generous, or they can be made more restrictive; and benefits which are granted at one time can be withdrawn. Following is what appeared on their website in the Supreme Court case of "Flemming vs Nestor.

The fact that workers contribute to the Social Security program's funding through a dedicated payroll tax establishes a unique connection between those tax payments and future benefits. More so than general federal income taxes can be said to establish "rights" to certain government services. This is often expressed in the idea that Social Security benefits are "an earned right." This is true enough in a moral and political sense. But like all federal entitlement programs, Congress can change the rules regarding eligibility--and it has done so many times over the years. The rules can be made more generous, or they can be made more restrictive. Benefits which are granted at one time can be withdrawn, as for example with student benefits, which were substantially scaled-back in the 1983 Amendments.
There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. That is to say, if a person makes FICA contributions over a number of years, Congress cannot, according to this reasoning, change the rules in such a way that deprives a contributor of a promised future benefit. Under this reasoning, benefits under Social Security could probably only be increased, never decreased, if the Act could be amended at all. Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled "RESERVATION OF POWER," specifically said: "The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress." Even so, some have thought that this reservation was in some way unconstitutional. This is the issue finally settled by Flemming v. Nestor

In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right. 

I feel that in light of the upcoming election, this is a timely topic. I have yet to hear any of the supposed candidates address the issues such as social security, Medicare, or affordable senior housing, just to name a few. Now is the time to speak up, ask questions......and demand answers. And, most of all, when casting your vote, proceed with caution.

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