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I would like to know if it is likely that the United States government may have to reduce Social Security payments for the remainder of this year to help fund economic stimulus packages to help bail out small businesses and big companies like Boeing.
Or are Social Security payments guaranteed not to go down unless Congress introduces a new bill to do so and then has to vote on this bill and then send it to the President for signing in order to enact this SS payment reduction?
There has been zero talk about cutting social security payments to people currently receiving payments.
There has been talk about cutting the taxes funding the social security system. The idea would be to make up the shortfall due to a tax cut by sending money from the general fund into the social security system. That plan has problems due to unemployed people not having to pay into the social security system, so a tax cut wouldn't put money into their pocket. They might need money to pay rent and buy food.
A change to the formulas used to determine payments for people currently receiving payments would be a big deal and would not be done to counteract a short term crisis.
I would like to know if it is likely that the United States government may have to reduce Social Security payments for the remainder of this year to help fund economic stimulus packages to help bail out small businesses and big companies like Boeing.
I think you'll find that of those who still earn a salary, most are:
If stocks = NO, and consumption = NO, the only place to put the money is into bonds. And the safest of them -- government bonds.
For the government, in these difficult times, there is absolutely no shortage of people willing to lend their money to the government.
I don't know the particular details about funding of the US social security. However, I genuinely believe that given the massive amount of people willing to lend their money to the government, there is and will be no shortage of money.
Of course, it is a political decision whether to fund the social security.
The reason governments are doing the massive stimulus packages is that there is plenty of money they can borrow.
As I understand things, Social Security Administration (SSA) has two streams of income to pay current pensioners.
First is the payroll tax. The payroll tax pays off current SSA obligations (checks to pensioners). If there is anything left over, it goes into the reserves.
The reserves are invested in US Treasuries (I believe SSA is the largest holder of US Treasuries).
So if the number of people working goes down (through higher unemployment) or the payroll tax goes down, the revenue to SSA goes down.
If SSA has negative cash flow, it gets the balance from its reserves.
There is plenty of money in the reserves for the foreseeable future.
