By cottenwesto57742814, Sep 19 2016 01:29PM
You have worked all your life, dutifully paid into Social Security and your spouse worked as a teacher, a municipal worker or police, fire, or other form of government worker that has not paid into Social Security. When you die, you expect your spouse to get the benefit of the money you paid into Social security, right? Not necessarily so.
Benefits paid by the Teacher Retirement System of Texas, or other governmental body, such as firemen, police and other governmental bodies, may affect Social Security benefits due the surviving spouse on account of the Government Pension Offset (GPO).
The Government Pension Offset affects Social Security benefits paid to individuals who either have a living spouse who's receiving Social Security benefits or who have been widowed by a spouse who paid Social Security taxes. Benefit amounts are reduced by two-thirds of the amount of the uncovered government worker’s retirement pension. If two-thirds of the pension benefit is more than the spousal benefits amount, the person doesn't receive any spousal Social Security benefit at all.
Texas governmental pensions are not subsidized by the federal government, so the argument that receiving a state, or local governmental pension and Social security is “double dipping” is ludicrous. It is simply a way to help balance the Social Security accounts and prolong the deficits created by Congress.
Look at the history of Social security: from Social security Reform Center (http://socialsecurityreform.org/history/index.cfm)
1935 - The Social Security Act, which covered workers in commerce and industry, was signed by President Roosevelt.
1937 - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Payroll taxes were 2%.
1939 - Social Security was expanded to cover dependents and survivors. Payroll taxes were 2%.
1950 - Coverage was expanded to jobs outside of commerce and industry, and benefit levels were increased. Payroll taxes were 3%.
1956 - Disability Insurance was created, and expanded over the following years. Early retirement at age 62 for women was permitted. Payroll taxes were 4%.
1961 - Early retirement at age 62 for men was permitted. Payroll taxes were 6%.
1972 - Automatic cost-of-living-adjustments (COLAs), which index benefits to inflation, were introduced. The formula to calculate increases initially overstated inflation by 25%, and people born between 1910 and 1916 received an unintended windfall. Payroll taxes were 9.2%.
1977 - The mistake in the benefit formula was corrected. The "notch" refers to the difference in benefits paid to the group that received the windfall and those who retired following the formula correction. Social Security was thought to be actuarially sound. Payroll taxes were 9.9%.
1983 - The National Commission on Social Security Reform was created in response to the actuarial unsoundness of the system. The commission called for 1) and increase in the self-employment tax; 2) partial taxation of benefits to upper income retirees; 3) expansion of coverage to include federal civilian and nonprofit organization employees; and 4) an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000. Again, Social Security was declared actuarially sound. Payroll taxes were 10.8%.
1985 - The Social Security Trust Funds were moved "off-budget" so that the funds earmarked for the Social Security system would be tracked separately from the rest of the budget. Payroll taxes were 11.4%.
1986 - COLAs were increased to respond to minor levels of inflation. Payroll taxes were 11.4%.
1993 - The amount of taxable benefits for upper income retirees was increased to 85%. Payroll taxes were 12.4%.
1996 - The Social Security Trustees' Report stated that the Social Security system would start to run deficits in 2012, and the trust funds would be exhausted by 2029. All members of the Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%.
1997 - All members of the presidentially-appointed Social Security Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%."
1999 - The Social Security Trustees' Report stated the Social Security Retirement System's unfunded liability increased by $752 billion since the 1998 Trustee Report was published. This brings the total long-term unfunded liability to more than $19 trillion.
The Social Security system is funded by payroll taxes paid by employees and employers through the Federal Insurance Contributions Act (FICA) and the Self Employment Contributions Act (SECA). (The payroll tax is also used to fund part of the Medicare system.) Today the total employee/employer payroll tax is 15.3%, with 12.4% of that going to Social Security. This rate has been increased dramatically since 1937, when the rate was 2%.
Employers and employees each pay a 7.65% payroll tax. They pay 1.45% on all earnings for Medicare, and they pay 6.2% for Social Security up to a capped amount of $72,600. (This cap changes each year.)
Self-employed individuals pay the full 15.3% tax, but one half of the tax can be deducted as a business expense. Because the employer's portion of the payroll tax translates into lower wages for workers, it is most accurate to talk about the combined level of the payroll tax.
The Social Security payroll taxes are recorded through the different program trust funds, which are used to track the inflows and outflows of the program. The trust funds are presently taking in more money then they are issuing in benefits, and they therefore run annual surpluses. Rather than saving the surpluses, Congress spends the money on other parts of the budget, such as defense, domestic discretionary programs and other entitlement programs.
The government will have borrowed over $3 trillion from the trust funds and not a penny will be left to cover the owed benefits. To repay the $3 trillion, the government will have to either cut spending by $3 trillion, raise taxes on every family in America by $43,000, or increase the national debt by an additional $3 trillion.
Social Security has always depended upon more workers entering the system and paying more in taxes into the system than are being paid out of the system.
My thanks to Teacher Retirement System, Wikipedia, socialsecurityreform.org and nysscpa.org.