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Tuesday, April 19, 2011

Obama Supports Social Security Income Cap Increase

For years now, the government has been presenting a lot of proposals to alleviate the budget deficit. What’s sad about this, some plans tackle some considerations that will affect Social Security like altering retirement age, decreasing disability benefit amounts and even increasing income cap. However, it is unclear if these proposals can definitely help ease our budget deficit.

Last Tuesday, President Barack Obama expressed his support on the proposal to raise income cap on Social Security to strengthen fiscal budget for retirees. Yet, Obama’s advisers still has to determine how much would be the increase not to result much burden to the working population. Last year, a recommendation increasing the cap to $107,000 but the chief executive rejected it.

On his statement, Obama said that Social Security may not have contributed to the budget deficit but it may not be able to provide full benefits for retiring workers in the next few decades if no actions will be implemented to stabilize its finances immediately. A bit of adjustment to Social Security cap would bring significant amount to reinforce the program, Obama reiterated.

This year, Social Security will spend more in paying benefits than it will collect taxes. Experts believe that the program might have to borrow funds from the federal reserves by the year 2015 and if the government failed to come up with better solution, no funds will be available to pay benefits by the year 2037.

It is very critical for the government to resolve the budget crisis before our economy completely collapse. Nonetheless, it may also be important to consider sparing Social Security or at least implement programs that will not be too harsh for the members.

Workers must still be able to receive suitable disability benefits, retirement benefits and other support programs that they deserve even after budget measures have been implemented. Else, abolish Social Security and let private institutions handle the job.