Ross: Social Security could become another welfare program

The President has signed an executive order to give workers a break – by deferring payroll taxes on salaries below $100,000 a year.

Normally, employers would withhold about six cents of every dollar for the Social Security trust fund, so this lets employees just keep it.

No need to ask Congress for more money. And the Social Security checks still go out.

But of course there’s a catch. And the catch is that the formula for keeping Social Security solvent has been precisely engineered over the years. That’s why the retirement age has been inching up, and why the payroll tax has been applying to higher and higher incomes.

Now the President is altering that formula. And if this ends up going on for as long he hopes – eventually Social Security payments WOULD have to be cut.

My guess is Congress would end up cutting payments to the richer Baby Boomers.

Not the end of the world.

But it would be the end of Social Security as a retirement program. It would just become another welfare program – something that Republicans were against once upon a time.

And if for some reason Social Security DID wither away entirely?

Well, the Urban Institute projects that without it, millennials would need a nest egg of about a million dollars by retirement.

So when you see that 6% increase in your paycheck – you might want to save it.

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