What I know about Social Security and the cost of living adjustment…

From personal experience.

I’ve been extra-astounded at the crazy GOP political statements about getting rid of Social Security. Equally, I used to be astounded at the false claims that Social Security/Medicare will run out of funds in…[fill in some date or other doesn’t matter what, because it isn’t going to happen. See below].

Why any politician would campaign against Social Security/Medicare beats me. I’m not going to repeat arguments for government successes like these programs. But I think it might be useful to explain some things about them.

How do I know these things? Because for many years I was the administrator of a small law office. And one of my jobs was doing payroll.

Very early on, I learned about the ingenious and highly successful payroll service ADP, and signed up. For a stunningly low monthly rate, ADP took over our payroll needs. Each month, I fed them the payroll information (who was to be paid and how much) and they wrote and delivered the checks, as well as piles of computer-generated tables and reports about our payroll. And they sent our withheld taxes (one of which was F.I.C.A., i.e., the Federal Insurance Contributions Act) to the appropriate government agencies in three separate governments (federal, state and city).

For our employees’ contributions to F.I.C.A., ADP deducted 6.2% for Social Security and 1.45% for Medicare.

But our employer, the law firm, also paid into F.I.C.A. on our behalf. Same percentages.

So, in total, each of our paychecks caused ADP to pay to the IRS a total of 12.40% for Social Security and 2.90% for Medicare, half from each of us employees and half from our employer.

Sorry if I’m boring you because you know all this. But I can’t assume it. Here’s why: one day one of our associates asked me if I knew why he had more net money in his paycheck that month (we paid monthly).

“Sure,” I said. “You capped out.”

He didn’t know what I meant. So I explained: once his gross pay reached a certain amount (back then it was maybe around $110,000), no longer were Social Security and Medicare taxes deducted for the rest of that year.

What is the maximum income base today? $147,000.

Now, maybe you think it’s fair that people earning $147,001 through $40+ zillion only pay SS and Medicare taxes until they reach $147,000, while people earning, say, $25,000 a year have that 7.65% deducted from every paycheck.

Fair or not, here’s the major point: Social Security and Medicare cannot run out of money. Because our government can raise that cap infinitely. How secure would Social Security and Medicare funds be if all gross income was taxed 15.30% for F.I.C.A?

Well, maybe we could then afford universal health care.

In part, this explanatory calculation answers the question of why the GOP is campaigning on getting rid of Social Security. Employers, i.e., corporations, i.e., the constituency of the GOP, would no longer have to pay all that money.

Gee, could that be another big tax break for corporations and rich employers, even as they deprive us individuals of a government-protected retirement fund?

Let’s get to COLA, i.e., cost of living adjustment.

Next year, because of inflation, we Medicare recipients will be getting the highest cost of living adjustment since 1979. The COLA for 2023 will be 8.7%. Real money.

Another thing that happened decades ago: because I was listed as the resident manager of my small Village building, I was the recipient of an annual phone call from a man who worked for the Bureau of Labor Statistics, a unit of the Department of Labor.

This guy and I, who talked once a year, got as friendly as a fairly quick annual conversation allowed, mostly because I was intrigued about his work. The reason he called me was because the statistic he was mandated to calculate was the cost of apartment rents in Manhattan (I think, although it could have been the West Village).

We were a small building, a walk-up. On the fourth floor front was an apartment euphemistically called a one-bedroom, even though it consisted of a small room with a wall down the center. Nevertheless, the rent of this unit was one of the apartments registered as a DOL statistical exemplar.

So every year this guy would call me and we’d chat about whether the 4F rent had gone up or stayed the same.

He was the Apartment Rent statistician at his bureau. I assume there were other people there with their own special focuses in determining the consumer price index. I’d guess transit costs, the cost of a basket of food, a quart of milk, toilet paper, et cetera, would be gathered each year.

And that’s how they calculate our SS cost of living increases.

Two things to say here.

First, to the Daily News readers who comment regularly in the letters to the editor section: your whining about how you need a “raise” in your Social Security payments is ignorant. And your yelling about how the current federal administration and its executive in the White House isn’t paying attention to your suffering is pointless and silly.

The President of the United States has nothing to do with cost-of-living adjustments; nor does anyone in his administration, including the Secretary of Labor. So don’t blame them. You needn’t praise them, either.

COLA is determined by real numbers as gathered by my experienced friend, a statistician, in the Bureau of Labor Statistics. I’d think a computer or two might be involved.

P.S. Even if inflation goes down over the next year, we will not have our Social Security payments reduced. They only go up — sometimes not by a lot, but sometimes, like next year, by a lot.

P.P.S. You know who also will get this COLA next year?

What you might call “illegal immigrants,” and what urbanites like me call “the people without whom our cities would collapse.”

A reminder. Immigrants working on or off the books do not collect Social Security. They don’t; not ever.

But they contribute a fortune into Social Security and Medicare every year.


This entry was posted in Capitalism, Immigration, Law, suits and order, The Facts of Life, The War On Workers, Trumpism and tagged , , , , , , . Bookmark the permalink.