Truth and guesses about Social Security
18 February 2005 - Orange County Register

Letter-writers John P. Lotz and R.B. Fisher are definitely on the right track in making the point that Social Security is insurance - that fact seems lost on just about everyone these days, especially those trying to “protect” FDR’s legacy. Means testing on its own won’t fix anything, but it certainly will enhance the public’s awareness that it is indeed insurance, and maybe at some point in the future we won’t be forced to buy it, just like we’re not forced to buy life insurance or health insurance.

On the other hand, Joel H. Goodman is flat-out guessing when he states that removing the cap on payroll taxes would solve “most of the ‘crisis’ for the [next] 75 years”. According to the Social Security Administration’s own actuaries in its 2003 report, removing the cap completely would only delay the start of annual deficits by 6 years, from 2018 to 2024. Removing the cap AND only paying benefits on the first $90,000 of income (an alternative to means testing) would only delay it one more year, to 2025.

Sources: Chris Chaplain, Actuary, and Alice H. Wade, Deputy Chief Actuary, Social Security Administration, “Estimated Long-Range OASDI Financial Effects of Eliminating the OASDI contribution and Benefit Base." and the 2003 Trustees report