Plan: Fixing Social Security and Medicare

 

Plan: Fixing Social Security and MedicareDate: June 29, 2025
Problem: Social Security’s OASI trust fund depletes by 2033, cutting benefits 23-25% (~$16,500/year for retirees, CBO 2024). Medicare Part A faces insolvency by 2036. Congress has delayed action for 40 years. This plan modernizes both as worker-owned insurance programs, fully independent of federal budget debates, ensuring fairness, transparency, and sustainability for contributors. Core Principles

• Worker-Owned Insurance: Social Security and Medicare are earned benefits, like private insurance, owned by American workers who contribute through payroll taxes. Benefits are exclusively for U.S. citizens and legal immigrants who pay in.
• Budget Independence: SSA/Medicare is entirely separate from the federal budget, funded solely by worker contributions. This eliminates threats of cuts, protects the programs from fiscal politics, and frees Congress to focus on balancing the federal budget and reducing the national debt.

The Plan in a Nutshell

1. Fully Employee-Paid Taxes with Transparency:
   • What: Employees pay the full 16% payroll tax (14% Social Security [OASI, DI, SSI], 2% Medicare) on wages up to $250K (from $168,600 in 2024). No “employer share” pretense.
   • Wage Adjustment: Employers raise wages by 7.65% (former “employer share”) to maintain take-home pay. For a $50K earner, wages rise to ~$53,825, offsetting the $8,000 tax.
   • Visibility: Pay stubs show “SSA/Medicare Contribution: $X, paid by you.” Annual SSA statements detail credited benefits, reinforcing worker ownership.
   • Why: Ends the government’s misleading split, showing employees pay the full cost and own the benefits.
2. Contributor-Only Benefits:
   • What: Benefits are restricted to U.S. citizens and legal immigrants with a contribution history (e.g., minimum 40 quarters of payroll taxes, per current SSA rules). Non-contributors (e.g., non-legal immigrants or non-workers) are ineligible.
   • Verification: SSA uses earnings records (Social Security Number-based) and work-authorized status (e.g., green card, work visa) to confirm eligibility.
   • Why: Ensures benefits reward only those who pay in, aligning with the insurance model.
3. Self-Employed Fairness:
   • What: Self-employed pay 16% (14% SSA, 2% Medicare) on net earnings up to $250K, replacing the 15.3% “double tax.” They deduct half (8%) as a business expense.
   • Why: Equates them with employees, supporting entrepreneurship.
4. Stabilize Now:
   • Taxes: 14% SSA tax funds OASI (2033 depletion), DI (2064 depletion), and SSI. 2% Medicare tax, plus 10-15% healthcare savings (~$100-150B/year by 2035), supports Part A (2036 depletion).
   • Cap: Taxable wages rise to $250K, covering ~60% of SSA’s 4.3% payroll deficit (CBO).
   • Impact: Extends OASI to ~2045 and Medicare to 2040+.
5. Complete Budget Separation:
   • What: SSA/Medicare operates as a standalone, worker-funded insurance program, supported only by the 16% payroll tax, with no ties to the federal budget.
   • Why: Removes SSA/Medicare from fiscal debates, eliminating threats of cuts or “raiding” allegations. Frees Congress to prioritize balancing the federal budget and paying down the $35.5T national debt (as of July 2025, per Treasury estimates).
   • How: Legislation mandates SSA/Medicare as a distinct entity, with trust funds ring-fenced for contributor benefits only.
6. Hybrid Social Security Investment Fund (HSIF):
   • What: Workers can opt to divert 2% of their 14% SSA tax to a personal HSIF account (40% Treasuries, 30% infrastructure bonds, 30% equities, targeting 5.5% returns). PAYGO (12%) funds current retirees; HSIF grows future benefits with a safety floor guaranteeing 14% PAYGO equivalents.
   • Rollout: Starts with new workers (2026), expands to under-40s (2031), all workers (2036).
   • Features: Default opt-in (opt-out via SSA portal/HR), $500 tax credit, gamified SSA app, low admin costs (0.3% via AI/blockchain).
   • Goal: HSIF funds 35-45% of benefits by 2050, reducing PAYGO strain (worker-to-retiree ratio: 2.8 now, 2.3 by 2035).

Why It Works

• Solves the Crisis: 16% tax and $250K cap cover ~80% of SSA’s shortfall; HSIF’s $1-2T pool (50% opt-in) closes the gap by 2050. A $50K earner’s $1,000/year HSIF adds ~$70,000 by retirement (+$350/month).
• Honest & Fair: Employee-paid taxes, contributor-only benefits, and self-employed parity eliminate confusion and inequity.
• Worker-Owned: Framing as an insurance program, with benefits tied to contributions, counters the “handout” myth.
• Budget Freedom: Full separation protects SSA/Medicare from cuts, letting Congress tackle the federal deficit (~$2T annually, CBO 2025) and national debt without distraction.
• Empowering: HSIF offers choice with a safety net; gamified app engages workers.
• Bipartisan: Market-based HSIF for conservatives, guaranteed benefits and infrastructure jobs for liberals, contributor focus and debt reduction for fiscal hawks.

The Numbers

• Revenue: 14% SSA tax + $250K cap covers ~80% of the 4.3% deficit; 2% Medicare tax + healthcare savings stabilizes Part A to 2040+.
• HSIF: 50% opt-in (75M workers) contributes $150B/year, growing to $1-2T by 2040.
• Solvency: OASI to ~2045; HSIF potentially eliminates the deficit by 2050.

Call to ActionThis is YOUR program, not the government’s. Protect Social Security and Medicare by making them independent, worker-owned, and contributor-only. Share this plan with Congress, coworkers, and friends today—demand action to secure your benefits and free up Congress to tackle the $35.5T national debt. Let’s build a fair, sustainable future together! #SocialSecurityReform #WorkerOwnedFuture

Curtis Neil 07/02/2025