Social Security Benefits
* Treasury Secretary Lloyd Bentsen and others in Washington are suggesting that we will need to see a raise in the age at which Americans begin receiving Social Security benefits. This is because life span has steadily increased during this century, leading to projections that ever-more Americans will be receiving benefits for increasingly long periods of time. But raising the Social Security benefits age may not be necessary if the Clinton health plan succeeds in Congress. We won’t need to restrain Social Security benefits if we have a health plan that restrains longevity.
HOWARD R. KRAUSS MD
Santa Monica
* Bentsen is looking in the wrong places in order to cut federal spending. In your article, it was stated that he is advocating programs that would hurt senior citizens by raising of the minimum retirement age.
In the same edition was an article about Rep. Dan Rostenkowski (D-Ill.) being accused of paying a ghost staff with federal money and in another article, Sen. Dianne Feinstein (D-Calif.) voting for a wool and mohair subsidy that many feel is wasteful spending.
Bentsen must not have a very high opinion of the American intellect. He seems to think that people do not know what is going on in Washington.
JOSEPH FAVATELLA
Los Angeles
* The suggestion to raise the age when benefits begin has been made many times before but it has been rejected because it is considered advantageous for the older persons to retire and give younger persons their chance.
The reason given for the recommendation was to save Social Security funds to bring down the debt. These funds have always been separate from the general budget and therefore do not affect the debt in any way. In fact, if the Social Security funds did not exist, the real amount of the debt would be exposed because the surplus could not be used to hide the debt.
This retirement fund is raised in the same way that most retirement funds are raised. The workers make contributions from each paycheck to the retirement funds and these funds are invested and made to grow faster than they are needed so that those who contribute retire honorably because of these contributions.
W. NEWTON LeBARON
Laguna Hills
* Your staff writer made an error by linking Medicare and Social Security relating to the yearly budget deficit. Social Security does not increase the federal deficit in any way.
As established in the 1930s, the Social Security system has its own trust fund, and all payments come from this fund. In 1992 alone, the fund realized a surplus of over $47 billion as a result of payments by employees and employers, and the paper value of the fund at the end of the year was over $330 billion. This year the value of the fund will increase by more than $50 billion. All things being constant, the fund will continue to grow because of the early surpluses through the year 2027. At that time, it is estimated that the worth of the fund will be between $3 trillion and $4 trillion.
Because it is a “fund” that is separate from the “general” fund that is used to pay the standard government expenses, if all Social Security payments were to stop today it would not decrease the budget deficit by one cent.
In fact, due to a quirk in the 1993 Clinton tax bill, stopping all payments would actually increase the budget deficit. Many Social Security recipients pay taxes on their Social Security--which now could equal between one and three months of Social Security benefits. Before the new tax bill, the law stated that these taxes must be returned to the Social Security fund. Now these taxes go to the general fund. This, in effect, transfers money out of the Social Security fund to the general fund. As a result, no Social Security payments would mean no Social Security taxes, and thus an increase in the deficit in the general fund.
Medicare is a completely different situation. This comes from the general fund and much attention is currently being given to this with the discussion of the Clinton health-care bill. The above numbers came directly from the Social Security Administration.
ROBERT L. KURTZ
Rolling Hills Estates
