Social Security and Other Government Benefits Term Paper

Social Security and Other Government Benefits - Term Paper Example The generations to come also runs the risk of missing out on the opportunities of receiving government aids and benefits in the form of social security and Medicare as they turn older. This fact makes it even more important for the government to fix its spending issues and figure out a way for future generations to have the same benefits as those before them did. The hypothesis is that the fiscal policy reform in the US is possible so as to keep social benefit level unaltered and move towards recovery of the federal budget deficit. The contents of this paper evaluates the validity of this hypothesis and establishes the possible alternative that might be followed for a more comprehensive reform in the US economy while accommodating policy changes for amending the gigantic federal debt. Study methodology The study has been conducted by making secondary research on the topic. Studies have been made on resources available from print and online media, such as newspapers, books, journals a nd online articles. Qualitative method of data analysis has been followed to reach the conclusion. Finally, strict adherence to personal timeline has helped in completing the research successfully. Narrative The new budget plan made by the Obama government has announced to make a change â€Å"in the way in which the annual cost of living adjustments for Social Security and other federal programs are calculated† (CNN, 2013). This shift from the current inflation measure to the chained CPI process is expected to reduce the debt of the Federal Government by US $230 billion. However, this policy also implies that the increment in the Social Security payments made to the senior citizens every year would be lesser than before. However, there are funds allocated for programs meant for benefitting the section of population that are in poverty or very close to it. Some of such programmes are the Supplemental Security Income. These programmes are exempted from the change in COLA calcul ations using chained CPI (CNN, 2013). In the initial years, the growth in Social Security benefit checks would be reduced by only a small amount. For an average retired worker the Social Security benefit in the first year would range between $38 and $45 (CNN, 2013). This range would however increase over time, and would amount to many hundred dollars. The debate on social security Social Security in the USA is funded from the revenue generated from the Federal Insurance Contributions Act tax (FICA), which is a kind of payroll tax (Whittington & Delaney, 2008). Both employees and employers make contributions for the FICA. Workers covered under this regulation receive retirement benefits along with Medicare facilities (disability benefits for people aged below 65 years as well as selected health benefits and disability benefits for people above 65 years of age) (SSA, 2013a). In case of demise of any worker covered under this scheme, the spouse of that person and children are eligible to obtain survivors' benefits. However, the payments made on the social security accounts are not directly invested on the tax payers. The total receipts are used for making payments for the total number of