During Bush's speech I attended, he spoke about Social Security. Did you know that the idea of Private Accounts was introduced by Bill Clinton in 1999 to a warm reception by Democrats?!
Some other points I found interesting were that:
- Democrats want to delay updates to SS by increasing the amount put into it (taxes) by 50% and lowering the benefits provided from SS by 27%. Sure that will make the program last a little longer, but who wants 1/4 less benefits for twice as much money if you can have more benefits for the same amount of money (and less tax money eventually)? Especially since delaying the problem doesn't mean you won't have to face it eventually somewhere down the line.
In 1950 there were 16 workers paying into SS for every ONE beneficiary receiving out of SS. Today...there are 3 workers paying into SS for every ONE beneficiary receiving out of it. Furthermore...SS benefits are GREATER today than in 1950 and require more money coming into the program to support it than in 1950. Let's also keep in mind that people (retirees) live much longer now than in 1950 so we pay out of SS security for a longer period of time than we did in 1950. They expect that by the time WE retire, there will only be two workers paying in to SS for every ONE beneficiary taking out!!!
The only other suggestions I have heard are:
- limiting benefits for wealthy retirees
- indexing benefits to prices, instead of wages
- increasing the retirement age
- changing the benefit formula to create disincentives for early retirement.
I want to know who actually finds these options more appealing than private accounts? Maybe we should just drop FICA all together and fund SS by raising sales tax! That way the democrats would be happy that SS is funded mostly through purchases by the wealthy. I bet they would go for that...as long as a Republican doesn't introduce the idea.
Private accounts are no different than the current SS program, EXCEPT...the government can't touch the money in the accounts (so we don't have to worry about them spending it instead of saving it.)
Under the Private Accounts option...taxes are taken out of our paycheck for SS, just as they are now. A portion of it goes into today's SS program to pay for anyone over the age of 55 today. (Notice you don't lose your benefits at all if you are 55+...not even the 27% the democrats want to take away). The other portion is placed in our own private accounts that we can't touch until we retire, but neither can the government. If we die...the money in our accounts are passed on to family members so we don't lose our savings that we worked on all of our life (like you do under the current program.) The private accounts yield higher interest and since we don't have to worry about the government spending our retirement money (like we do now), we will actually have MORE money for retirement than we currently do.
You have to ask yourself...Who do you trust more with your money for retirement...yourself...or the government? If you trust yourself more...you must be a Republican. If you trust the government more than you trust yourself...you must be a democrat (and you obviously aren't capable of accountability.) It's funny to see so many citizens gripe and moan that they don't trust politicians...yet they fight to allow government to handle their retirement savings instead of themselves!
Maybe their dissent has more to do with partisanship than logic???
2 comments:
Social Security Quotes from Bill Clinton:
http://www.cnn.com/ALLPOLITICS/stories/1999/01/19/sotu.transcript/
"Today, Social Security is strong. But by 2013, payroll taxes will no longer be sufficient to cover monthly payments. And by 2032, the trust fund will be exhausted, and Social Security will be unable to pay out the full benefits older Americans have been promised.
The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits; not to raise payroll tax rates; and not to drain resources from Social Security in the name of saving it.
Instead, I propose that we make the historic decision to invest the surplus to save Social Security.
Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector just as any private or state government pension would do. This will earn a higher return and keep Social Security sound for 55 years.
But we must aim higher. We should put Social Security on a sound footing for the next 75 years. We should reduce poverty among elderly women, who are nearly twice as likely to be poor as our other seniors -- and we should eliminate the limits on what seniors on Social Security can earn.
Now, these changes will require difficult but fully achievable choices over and above the dedication of the surplus. They must be made on a bipartisan basis. They should be made this year. So let me say to you tonight, I reach out my hand to all of you in both houses and both parties and ask that we join together in saying to the American people: We will save Social Security now." -- Bill Clinton, State Of Union Address 1999
(A few points. When Clinton said that the system was in trouble and pointed out the dates of its demise, Dems gave him standing "O". When Clinton said some should be privately invested, not one of the Dems claimed it would be a windfall for Wall Street. They all jumped on board...(of course you should note that its the government doing the investing not the citizens.) When Clinton said private investments would earn a higer return, there was no dissent from the left. And last but not least, when Clinton said "let's spend the surplus" there was no surplus ... just a projected surplus. Not that it mattered. Because, as usual, nothing happened, even though at the time the Dems were in agreement that Social Security was in deep trouble and they needed to save it.
Hypocrites
Democrats booed during the State of the Union Address while President Bush was talking about Social Security. They specifically booed while he was stating that Social Security will go bankrupt by the year 2042. Besides being crass and childish, the booing showed these democrats to be hypocrites.
To back up this point, I went back and looked at all of President Clinton's State of the Union speeches. Here is what he had to say about Social Security during his presidency:
1993
Secondly, the only change we are making in Social Security is one that has already been publicized. The plan does ask older Americans with higher incomes, who do not rely solely on Social Security to get by, to contribute more. This plan will not affect the 80 percent of Social Security recipients who do not pay taxes on Social Security now. Those who do not pay tax on Social Security now will not be affected by this plan.
(Now why would he want to change Social Security if there is nothing wrong with it?)
1998
Tonight I propose that we reserve 100 percent of the surplus--that's every penny of any surplus--until we have taken all the necessary measures to strengthen the Social Security system for the 21st century. Let us say to all Americans watching tonight--whether you're 70 or 50, or whether you just started paying into the system--Social Security will be there when you need it. Let us make this commitment: Social Security first. Let's do that together.
I also want to say that all the American people who are watching us tonight should be invited to join in this discussion, in facing these issues squarely and forming a true consensus on how we should proceed. We'll start by conducting nonpartisan forums in every region of the country, and I hope that lawmakers of both parties will participate. We'll hold a White House conference on Social Security in December. And one year from now I will convene the leaders of Congress to craft historic, bipartisan legislation to achieve a landmark for our generation: a Social Security system that is strong in the 21st century.
(Sounds like there is a problem with Social Security that needs to be fixed!)
1999
Our fiscal discipline gives us an unsurpassed opportunity to address a remarkable new challenge, the aging of America. With the number of elderly Americans set to double by 2030, the baby boom will become a senior boom. So first, and above all, we must save Social Security for the 21st century.
Early in this century, being old meant being poor. When President Roosevelt created Social Security, thousands wrote to thank him for eliminating what one woman called "the stark terror of penniless, helpless old age." Even today, without Social Security, half our Nation's elderly would be forced into poverty.
Today, Social Security is strong. But by 2013, payroll taxes will no longer be sufficient to cover monthly payments. By 2032, the Trust Fund will be exhausted and Social Security will be unable to pay the full benefits older Americans have been promised.
The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits, not to raise payroll tax rates, not to drain resources from Social Security in the name of saving it. Instead, I propose that we make the historic decision to invest the surplus to save Social Security.
Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector, just as any private or State Government pension would do. This will earn a higher return and keep Social Security sound for 55 years.
But we must aim higher. We should put Social Security on a sound footing for the next 75 years. We should reduce poverty among elderly women, who are nearly twice as likely to be poor as our other seniors. And we should eliminate the limits on what seniors on Social Security can earn.
Now, these changes will require difficult but fully achievable choices over and above the dedication of the surplus. They must be made on a bipartisan basis. They should be made this year. So let me say to you tonight, I reach out my hand to all of you in both Houses, in both parties, and ask that we join together in saying to the American people: We will save Social Security now.
Now, last year we wisely reserved all of the surplus until we knew what it would take to save Social Security. Again, I say, we shouldn't spend any of it, not any of it, until after Social Security is truly saved. First things first.
(Wow, now he says Social Security needs to be saved! But how can that be? I thought President Bush was just making it all up. President Clinton even talked about investing a portion in the private sector. Now where have I heard that before?)
2000
Beyond paying off the debt, we must ensure that the benefits of debt reduction go to preserving two of the most important guarantees we make to every American, Social Security and Medicare. Tonight I ask you to work with me to make a bipartisan downpayment on Social Security reform by crediting the interest savings from debt reduction to the Social Security Trust Fund so that it will be strong and sound for the next 50 years.
***Indeed, we must make these investments and these tax cuts in the context of a balanced budget that strengthens and extends the life of Social Security and Medicare and pays down the national debt.
(Hmm, still sounds like Social Security needs to be fixed. How can this be? Democrats are now saying that Bush is creating a crisis that really isn't there.)
http://www.clintonfoundation.org/legacy/102399-press-briefing-by-gene-sperling.htm
"Gene Sperling - Clinton Economic Advisor": "this is a chance for both parties to actually show ... that we are saving more to meet the Social Security crisis in the future. If we don't do this, then we are just putting those burdens on a future generation."
http://www.ssa.gov/pressoffice/trustees98_press.htm
Kenneth S. Apfel, Commissioner of Social Security: "Although there is no immediate financial crisis, the time to act is now in order to prevent a crisis from ever occurring."
http://www.ssa.gov/history/senateret.html
Senator Kohl - Democrat: Wisconsin [March 22, 2000]: "Comprehensive Social Security Reform is still necessary. Today's changes will do nothing to hold off the coming crisis that will begin when we start drawing down the Social Security Trust fund in 2014. Congress needs to deal with this soon, otherwise we are shirking our duty to the American people."
http://www.ssa.gov/history/clntstmts.html
WHITE HOUSE RELEASE [October 30, 1998] -- "It is normally impossible for any democracy to tackle long-term problems while the crisis is still only on the horizon. Putting the surplus off-limits until we address saving Social Security provides a strong impetus for all of us to do something to solve a fiscal challenge early so we can prevent a crisis later."
And then there's...
President Clinton
February 2, 1998 -- "We have a great opportunity now to take action now to avert a crisis in the Social Security system."
February 9, 1998 -- "every one of you know that the Social Security system is not sound for the long-term, so that all of these achievements ... are threatened by the looming fiscal crisis in Social Security."
February 9, 1998 -- "This fiscal crisis in Social Security affects every generation. ... That would be unconscionable, especially since, if you move now, we can do less and have a bigger impact..."
April 7, 1998 -- "Today the system is sound, but the demographic crisis looming is clear."
April 7, 1998 -- "All these trends will impose heavy strains on the system. Let's look at the next chart here. You can see that in 1960, which wasn't so long ago, there were over five people working for every person drawing Social Security. In 1997, last year, there were over three people --3.3 people -- working for every person drawing. But by 2030, because of the increasing average age, if present birthrates and immigration rates and retirement rates continue, there will be only two people working for every person drawing Social Security."
April 7, 1998 -- "If we act now, we can ensure strong retirement benefits for the baby boom generation without placing an undue burden on our children and grandchildren. And we can do it, if we act now, with changes that will be far simpler and easier than if we wait until the problem is closer at hand."
October 24, 1998 -- "Unfortunately, some in Congress already may be backing away from this historic opportunity. Just last week, the Senate Majority Leader said he may not be willing to join me in our efforts to save Social Security. That would be a grave mistake. As with so many other long-term challenges, if we act now, it will be far, far easier to resolve the problem than if we wait until a crisis is close at hand. I believe we must save Social Security and do it next year."
February 17, 1999 -- "the evident financial crisis which will be imposed on Social Security when the baby boomers retire"
March 12, 1999 -- "Now, if we do what I'm suggesting, not only can we deal with the financial crisis in Social Security and Medicare..."
August 6, 1998 -- "I don't want us to run right out and spend [the surplus] before we take care of the crisis in Social Security that is looming when the baby boomers retire."
Note how closely that rhetoric--"if we act now, it will be far, far easier to resolve the problem than if we wait until a crisis is close at hand"--mirrors that of President Bush, who said:
http://www.whitehouse.gov/news/releases/2004/12/20041216-8.html
"A lot of government, if the truth be known, is crisis-oriented management. You know, we wait and wait and wait, and then the crisis is upon us and everybody demands a solution. The problem with that when it comes to a modernization of Social Security is, is that the longer we wait, the more expensive the solution becomes.
And so one of my jobs, one of my charges is to explain to Congress as clearly as I can, the crisis is now. You may not feel it, your constituents may not be overwhelming you with letters demanding a fix now, but the crisis is now."
http://apnews.myway.com/article/20050323/D890QBLO0.html
Social Security Said to Go Broke in 2041
Mar 23, 12:22 PM (ET)
By MARTIN CRUTSINGER
WASHINGTON (AP) - The trust fund for Social Security will go broke in 2041 - a year earlier than previously estimated - the trustees reported Wednesday.
Trustees also said that Medicare, the giant health care program for the elderly and disabled, faces insolvency in 2020.
The new projections made in the trustees annual report were certain to be cited by both sides in the massive battle to overhaul Social Security, which President Bush has made the top domestic priority of his second term.
The go-broke date for Medicare was delayed by one year, compared to the estimate that trustees gave a year ago.
The insolvency dates represent when both trust funds will have exhausted the government bonds that have been building up to take care of the pending retirement of 78 million baby boomers.
Equally important are when benefits paid to the elderly start exceeding the payroll taxes designated to support the two programs. That's when the government will have to increase its borrowing on financial markets, raise taxes or divert money from other government programs to sustain Medicare and Social Security at current levels.
For Medicare, the threshold when benefits exceed program income occurred last year. For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year's report.
That change is certain to be cited by the administration as a sign of the urgency to act to deal with Social Security's funding woes.
Democrats argue that the real crisis is in Medicare and that the administration is ignoring the health care crisis.
Treasury Secretary John Snow, chairman of the six-member board of trustees for both programs, said the estimates "leave no question that Social Security reform is needed and it is needed soon. Reform of this system, for the sake of our children, grandchildren and the financial future of our country, is a very real and pressing matter."
The trustees said that Social Security's unfunded obligations total $4 trillion over the next 75 years, an increase from last year's projection of $3.7 trillion in unfunded liabilities.
Snow said that to meet that shortfall, Social Security payroll taxes would have to be raised by 3.5 percentage points or benefits would have to be cut by 22 percent.
Bush has said he will not raise payroll taxes to deal with the funding problem although he has left the door open to raising the $90,000 cap on incomes subject to the payroll tax.
In the report, the trustees said that "the projected trust fund deficits should be addressed in timely way to allow for a gradual phasing of the necessary changes and to provide advanced notices to workers. The sooner adjustments are made, the smaller and less abrupt they will have to be."
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