Social Security Programs (aka social insurance prgrms)

(are "social security prgrms" the same as "Social insurance programs?")

- OASDI: (old Age, Survivors & Disability)

- Unemployment Inusuance

- Worker's Compensation

- Medicare

- (& Social Security)

Social Insurance (not Entitlement prgrms) vs. Public Assistance (Entitlement prgrms)

1) Social Insurance:

2) Public Assistance:

1) Social insurance:  Requires people make periodic contributions usually through payroll before they recieve bennefits. Social Insurance = 4.2% of GDP.

2)Public Assistance: Very different than Soc insurance. PA is safety net for needy, has means test. Entitlement program Public Assistance = 2.5% of GDP.

Public Assistance Programs (are entitlement prgrms)

- TANF  (AFDC in the past)

- SSI: Suplimental Security Income

- Food Stamps

- WIC

- Medicaid

- During the Great pression Roosevle promoted Social Security act of 1935. Major shift. Fe govt took responsibility for social welfare prgrms.

- OASDI is the largest social security program (covers 9 of 10 workers)

- Smart politics believe: "Touch Social Security and you will die"

Medicare

1) Explain

2) list the parts

1) All persons elibible for Social Security are eligible for Medicare that provides medical coverage. (4 parts)

- Part A. Inpatient care (hospital/nursing home stays) + in home health care. no monthly pymnt by recipient.

- Part B. Outpatient care (doc visits)+ some other services. Has gotten much larger, so now less $available for other parts. recipient

pays monthly.

- Part C. Medigap coverage

- Part D. This is a controverisal new provision. Covers Rx drug coverage to all on Medicaid. Requires recipient pay insurance company but at low cost.

Social Security

- more than 53 million ppl recieve some bennefit (an avg pymnt: $1,100)

- Financed by 6.2% wage deduction (currently 4.2%)

scheduled to return in 2014

- Deduction on wages up to $106,800. (cap is considered unjust)

- Sadly, the govt has borrowed against what has been paid in. Surplus was 2.5 trillion

Unemployment Insurance

(social security and Social insurance prgrm)

- Unemployment rose from 6.7% (10 mil) in 2008 to 9.1% (15 mil) in 2010

- Two purposes: 1) provide income to those involuntarlily terminated 2) stabilze economy during recessions

- Hasn't changed since 1935

- part time and temp workers less likely to receive bennefits (in 03' only 44% of unemployed recieved UI)

- Bennefits are less

- unemployment is worse/ longer

- Women receive less bennefits

- First started in 1911 in wisconsin and New Jersey. by 1948 all states had UI.

- vary in eligibility and bennefits

Future of Social Security

- Describe the three solutions ("alternatives") and other solutions

- Alternative I. Raise SSA taxes and invest 40% of revenues in private capital markets w/out trimming bennies.

- Alternative II.  Trim bennies and add revenues.

- explained:

- Alternative III. replace social security benefits w/ flat benefits independent of earnings in mandatory personal retirement accounts. Funded by divering some payroll tax to these accounts to be kept and managed by individuals.

Future of Social Security

- As SS bennies will exceetd income soon, something should be done. List/explain the "alternatives" and other solutions.

- Alternative I. Raise Taxes and invest 40% of revenues in private capital markets.

- Alternative II. trim bennies and add revenues

- Alternative III. Replace social security w/ flat bennies independent of earnings in mandatory personal retirement accounts. Fund by diverting part of the payroll tax. Kept and managed by individuals.

Future of Social Security cont'd

Other Ideas

- Fed shld stop borrowing from Social security surplus to fund other programs ("locked box")

- Exclude wealthy from benefits.

- Raise the retirement age again

- Lift the cap on the max ammnt paid during a year.