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AARP Drops Opposition to Social Security Cuts

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Social SecurityHaving just passed the thirty mark a short time ago, I usually don’t follow too much about that end of retirement on Bargaineering. I try to keep up to date on it, since I’d like to know how likely it is I’ll be collecting Social Security in thirty years, and so this latest news that the AARP is dropping its opposition to Social Security cuts is pretty big news. As we all know, lobbying (and money in general) equals influence in Washington and this opens the door for a restructuring of Social Security. A restructuring that we probably need pretty badly.

What’s wrong with Social Security?

Social Security, which was created in 1935, is facing a demographic challenge as the baby-boom generation retires with fewer younger workers to support it. The program’s actuaries say that by 2036, the program will have exhausted its reserves and will only be able to pay 77% of promised benefits. Between now and 2036, the government, which has spent the money held in reserve, will have to borrow to meet those obligations.

It’s always been the third rail in politics because seniors vote early and often. Alienating them is hazardous to your politic health.

I’m eager to see what happens out of this and hopefully it’s a compromise that results in a stronger/solvent Social Security program.

(Photo: andrewmorrell)

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22 Responses to “AARP Drops Opposition to Social Security Cuts”

  1. Annie says:

    I find it very interesting that AARP is willing to concede that we need to do something with SS before it becomes a worse problem. I wish the gov’t had the foresight to do something about this and the deficit. We need to grow this economy, create jobs, and get out of debt. Maybe there is hope that all the money I have paid into social security was not just wasted and that I may get a little of it back.

  2. Texas Wahoo says:

    I wonder if this is due to the fact that the baby boomers are getting older and the maximum amount age has gone up. I imagine that AARP’s demographic is scewing younger (towards 55). Maybe the fact that more AARP members are still paying in and worried about receiving their full entitlement.

    Just a theory.

  3. zapeta says:

    I’m not expecting to get much out of SS. I’m sure it will be around in some form but I’m not counting on it to fund my retirement. I’ve been ignoring it in my retirement planning so whatever I get will just be icing on the cake.

  4. fabclimber says:

    Social Security should be kept as is. The thing to cut is Medicare. It’s an outrageous pay-off to the Insurance companies, the AMA and hospitals who continue to raise prices, refuse to cut costs, and is completely rife with phoney billing schemes and outright fraud. I personally don’t know any health care providers driving 10 year old American cars, do you?

    • tom says:

      We need to cut both. Combined, they account for 60% of the federal budget. If you make meaningful and significant cuts to both programs, you will be on your way to eliminating the deficit in no time.

      Bottom line is that we need to start weening people off Government entitlement programs. Americans need to take responsibility for themselves and the Government needs to help make that happen.

    • billsnider says:

      Lets take this one step further.

      How many people in general drive a car that is more than 10 years old? Stop blaming health care providers.

      Bill snider

    • billsnider says:

      I forgot to add…. (you know how we seniors get).

      How old is your car and what kind of job do you have that requires years and years of education and experience?

      Bill snider

    • PlayVT says:

      Regulations and the cost of delivering healthcare is the issue. I’m in the healthcare industry and government and nongovernment entities increase the cost in several forms. I am a physisican, after 14 years of training and $250,000 in loans, and I have not had a raise in over a decade. I consider myself lucky since I have not had a paycut in that time period. However, it is always a concern. In fact, I work more hours than I did 10 years ago. Considering time working and inflation, I get a paycut on a yearly basis.

  5. molly says:

    Unfortunately for this article, the news is inaccurate. This is fortunate for us! AARP reasserts its position today here: http://www.aarp.org/about-aarp/press-center/info-06-2011/aarp-has-not-changed-its-position-on-social-security.html

    • skylog says:

      thank you for the link. soooooo, one has to wonder, did they say one thing, then when the reactions were negative, did they back away?

      • tbork84 says:

        I could certainly imagine that being the case. Its going to be terribly difficult for us to have a real discussion about entitlement reform when leading advocacy groups are pushed around when they try to make an argument.

        It is a scary topic to discuss however.

        • skylog says:

          scary indeed. i have no idea what ss will look like, or if it will even exist when i reach that point in my life, but i am simply moving forward with the thought that i will receive nothing.

  6. mannymacho says:

    Many people still believe the myth that there’s a Social Security “reserve” somewhere that’s going to run out. As the article says, everything’s already been spent. We either cut now, cut later, hope for a miracle change in demographics, or scrap the program.

    • billsnider says:

      people don’t understand the facts.

      Social security is a pay as you go system.

      Down the road the inflow will outstrip the outgo.

      At that point the system does not stop. What has to happen at that point lacking any further action is REDUCTIONS in payments.

      Bill Snider

  7. Michele says:

    Social security was never meant to be your only retirement. It was meant to keep the elderly out of abject poverty. It was assumed you had a pension to supplement, it assumed your family will help you. These things are no longer the case as most companies do not offer pensions or even 401k’s. Now all we hear are about entitlements and how x percent of people pay no taxes. The government and the media spend its time convincing you that your neighbor’s greediness is why your employer wont pay you a fair wage, or are unemployed, etc. Grandma lives to be 85 and its coming out of your pocket. That’s the society we live in now.

    • adam carolla fan says:

      well said, michele.

      the times have definitely changed. in the past, it was easy to spend 20-30 years at one job, retire, then collect a decent pension.

      now, we often hold multiple jobs over the course of our life, which makes being mobile (i.e. don’t buy a home immediately) that much more important.

  8. Rosa Rugosa says:

    Bill,
    Isn’t it that the outgo will outpace the inflow?

  9. fabclimbers says:

    Bill, I’m a CPA with 40 years work experience. I have recently experienced the death of my parents at an old age. I have seen the corruption in the Medicare system 1st hand. I can’t go on and on here due to space. I’m a conservative. I own 2 Fords. One is a 2004 and the other is a 2006 I bought used with low miles. My point here is that social security is a payment to people who can then decide how to spend it. Healthcare or whatever. Let the consumer decide and pay the cost and Medicare costs will drop dramatically and so will taxes and the deficit.

  10. Mike says:

    They are willing to decrease or overhaul the program when all their current members are dead.

  11. Grant says:

    What’s really amazing is that since Social Security’s inception in 1935, the retirement age has increased from 65 to 67. Over this same span, the average life expectancy has increased from 61.7 in 1935 to 77.9 in 2007 (http://www.infoplease.com/ipa/A0005148.html), that’s a whopping 16.2 years. Seems like anyone with common sense would have linked retirement age with mortality tables (life expectancy) and much of these issues would have been avoided. Now people cry when they want to raise the age a year or two. SS was actuarially sound at the inception of the program based on the life expectancies of the time, but we lacked the leadership to implement these common sense changes because of society’s innate greed to get what they think they deserve. For all its complexities, it seems the problem was staring them in the face the whole time.

    • Evan says:

      “Seems like anyone with common sense would have linked retirement age with mortality tables (life expectancy) and much of these issues would have been avoided.”

      We are talking about politicians here. This could have easily been done in the early 80s when Reagan moved to reform the system to provide some help.

    • PlayVT says:

      You hit the hammer on the nail.


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