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Extra resources for Class, power, & austerity: the New York City fiscal crisis
4. Transfers made by ignoring wages after 35 years The fourth benefit transfer mechanism is the 35-year wage limit that is built into the benefit formula. Most people in America start their careers by age 22 or 23, and many start as teenagers. The woman who begins working at, say, age 20, has 47 years to wait until she qualifies for full Social Security benefits. Yet, if she works during all those 47 years, only 35 will count. The payroll taxes paid on the other 12 years goes down the drain — and it’s not insignificant.
Congress could have created a true trust, to be run by autonomous trustees who would answer only to principles set forth in some form of irrevocable trust document. The document would set forth broad principles of equity, fiduciary responsibility, and overall funding caps, but details such as the definition of “disability,” retirement distribution options, and other administrative matters would be left to the appointed and/or elected trustees. And, once funds were transferred to the trust they would no longer be in reach of Congress.
Faking ailments and concealing income probably constitute the two most serious problems faced by Social Security. Control over the SSI welfare program has been so lax that, in 1997, the GAO proclaimed it to be a “high-risk” program (a designation it carried into 2003). 4 Other fraud schemes 4. Christopher M. Wright, “SSI: The Black Hole of the Welfare State,” Policy Analysis no. html. 14 Chapter II: Party Time on the Titanic affecting Social Security include collecting SSI while in prison, on the lam, or out of the country; stealing or fabricating identities (to get benefits), and collecting retirement benefits for those who don’t exist.