Responses to this, that, and the other thing. Legally the SS Trust Fund is not the property of workers. Much like public employee pension funds. The worker owns a promised stream of payments, not whatever is in the funds. In the latter case the assets are much better protected legally from meddling than the SS Trust Fund, whose reality depends totally on politics. But of course politics affects outcomes, so it is useful to speak of the trust fund's asset as belonging to the workers who paid in, perhaps to build in stronger legal safeguards against a default engineered by the "Just IOU" gang.
In political practice there could well turn out to be less difference between the over- and under-55s than you may think. Would anybody over 55 be comfortable in a program when other, younger citizens were being herded into something crappy? If the deficit means we're-all-gonna-die, there is no reason for an over-55 person to be complacent. And pressing this point might be very effective in derailing any cuts in benefits for anybody. I confidently predict that when proposals to split the program between over- and under-55s, we will start to hear from the latter (especially 45-to-55s) and it will all grind to a halt. SS is insurance. It insures the worker some wage replacement in the event of retirement, disability, or survivorship (death of the breadwinner) in return for reductions in her pay. It pools risk. What you get is related to what you forego via the payroll tax. This can all be true, whether or not there is a Trust Fund. There is no logical contradiction. To reduce it all to tax and transfer I think diminishes its appeal and rationale. Why did Obama appoint the BS commission. Because his economists believe entitlements must be trimmed to reduce the long-term deficit (which he has already done to some extent with the health care reform), and he wanted some promotion of a package that would advance that premise, wrapped around support for tax increases. In a better world the Administration could have exploited the crappy BS proposal instead of elevating it as the left-wing position. But of course they are not much to the left of the BS proposals.
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