Bush's SS Plan Would Reduce Government Guarantee For Younger Americans

[Itsthetruth]

Bush's Social Security Plan Would Reduce Government Guarantee for Younger Americans

By David Espo The Associated Press
Published: Feb 2, 2005

WASHINGTON (AP) - Near-retirees 55 and older would receive Social Security benefits without any changes under President Bush's proposal for personal accounts, but the government guarantee would fall for younger workers, congressional Republican officials said Wednesday.

These officials said that under Bush's blueprint, the reduction in the federal benefit for Americans younger than 55 would be larger for those who establish personal accounts than for people who do not, on the assumption that investment income would more than make up the difference.

http://ap.tbo.com/ap/breaking/MGBEOOZ9Q4E.html

[ryban]

1. My Social Security Question ...

PRESIDENT BUSH SAYS: "Right now, a set portion of the money you earn is taken out of your paycheck to pay for the Social Security benefits of today’s retirees. If you are a younger worker, I believe you should be able to set aside part of that money in your own retirement account, so you can build a nest egg for your own future."

QUESTION: If the younger worker is allowed to take his/her money out of the mix and people over 55 don't have to worry about losing benefits under the Bush privatization plan, how is the government going to make the math work? Who is going to make up the difference when the younger workers' money is taken out of the mix? The president seems to have skipped over this part.

Does anyone know the answer?

[mediaman007]

4. Its the "lock box"

For years the system has generated a surplus. The unspent money was supposedly used to buy government bonds. Of course, the surplus was used for government expenditures. So theoretically, cashing in the bonds should cover some of the shortfall until about 2042.

Realistically, the government might have to do some creative math to come up with that money.

[SharonAnn]

11. Yes, the young people will support their parents and grandparents

which will save Social Security from having to support them.

It'll work just like the old days.

I think if you tell all the boomers and their kids that the parents will have to move in with the kids to make this work, that'll be the end of it.

[Furity]

23. Not sure

But I think it means if I'm 42 and my hubby is 47, we're screwed. Just a guess (but I'm probably right).

~Furity

[mediaman007]

40. You might be screwed anyway if

you don't have any more than Social Security. Social Security (even if its paid in full) really won't do much to help you. Its meant to supplement your main retirement plan or assist if you become disabled.

[TahitiNut]

41. That's what "start up costs" mean.

That's the interior of the Trojan Horse. When we hear estimates of $3.5 trillion in "transition costs" through 2028, they're talking about the levels at which we sustain benefits for current retirees. That's also why we're hearing warnings about reductions in benefits. I'll bet a dollar against a moldy old horseturd that future retirees (currently over 55) will/would face greater reductions of benefits under the Fascist Fraud than they will/would under the current system, even if NOTHING is done. There's no fucking way in hell that this FRAUD would be permitted to hit the taxpayers at the very same time they're going to be laying off the National Debt (by paying off the Debt or doubling up on public borrowing) currently held in the Trust Fund.

[mediaman007]

2. I don't get this...Everyone under 55 gets less money, so real young (20's)

can invest to maybe make some money for retirement. Don't young people have a chance to invest in 401's and 403's now? When I saved my money (I'm over 55), I never expected Social Security to be more than a little extra which would be necessary if something catastrophic happened.

The answer of course is to raise the limit to $150,000. If you're making that much you can do a little more.

[stevebreeze]

3. what it would do is reduce SS for everyone even the disabled

want to help SS without benefit cuts or tax raises? help the economy to grow. raise wages from the bottom up. raise the minimum wage. restore progressive taxation.

[havocmom]

5. BINGO. Fix the ecomony and allow for real paychecks.

Outsourced labor does not fill payroll tax coffers.

[TahitiNut]

42. Absolutely. The REAL problem is the impoverishment of the working class.

Payroll taxes, the source of Social Security funding, depend on the national payroll. When fewer people are working, payroll tax revenues go down. When people earning under $90,000 are paid less and less in real terms, payroll tax revenues go down.

That's why it's so important to understand the Gini Ratio. It's a measure of how much the highest income people get increases at a cost to lower income people. The Gini Ratio has gone up for the past 30 years, showing that the rich get richer and the poor get poorer - the very antithesis of "economic justice"!!

The rate at which the Gini Ratio has been increasing slowed down during the Clinton/Gore era, but the economic rape of the working class goes on!

[Liberal Veteran]

6. The easiest way to "fix" Social Security would be to raise the...

....the cutoff level at which wages are no longer subject to SS. Instead of everything under 89,000 being subject to SS withholdings, make it 150000 or 200000 where the cutoff is.

Problem solved.

[Itsthetruth]

19. Exactly Right!

Exactly! Do that when there is actually a problem .... say in 30 or 40 years.

[Enraged_Ape]

33. The 800 pound gorilla in the room the media can't discuss

Making the well-heeled pay their fair share.

You are, of course, 100% dead-on correct. And I bet you don't even have a Harvard MBA.

[SammyWinstonJack]

39. But that would a tax on the rich and that ain't never gonna fly

with the MePublicans. Taxes are only for the little people, ya know?

[booksenkatz]

7. My husband and I are in our mid-40s

What happens to the money we've paid into FICA since we were 16 fucking years old?? (Yeah, we've got a pittance invested through his 401K; we're trying to cobble together some kind of retirement $ on our own, but it's damned hard when you have nothing leftover after groceries every month.) I guess we just are supposed to write off 30 years of paying into this account? Could, um, I get some kind of TAX WRITE-OFF for losing 30 years of FICA for two adults? Perhaps we could take it as a huge fucking LOSS....????

WORST. PRESIDENT. EVER.

[bleedingheart]

8. I can't help but agree with you....this GOP SS plan sucks

it is nothing more than a big fuck you to the middle class and sadly a bunch of the morons are falling for it.

[Toots]

37. Republicans say you need bootstraps to grab

I think they really mean ankles.

[William Bloode]

9. Hmmmm....

Catch that nice key word "assumption". You know what they say about those that just assume things?

[The Zanti Regent]

10. But YOU got Jesus

and the Churches will take care of the truly needy.

Surrrrrrrrrrrrrrrrrrrreeeeeeeeee

[jtb33]

12. My biggest problem with SS is...

That I am paying the money that I earned into Social Security, but if I die before I collect any of it (say, age 60), it's all gone. That is money that I earned, and it should stay with my family. It should go to my son or daughter (or wife, if she's still alive). The other issue I have is that if my wife and I have both worked all along, when we retire, we only get ONE of our SS payment - we "forfeit" the other. Of course, this is always how it has been so I can't blame Bush for that. My opinions on SS are more conservative that most here. I strongly feel that it should NOT be the gov't who's taking responsibility for supplementing retirement savings - that money I pay into SS is MINE and I should be able to save it, spend it or invest it however I see fit. I'm 30 years old and I'd be happy to give up ALL that I've paid into SS for the 14 years I've been in the workforce just to be able to have full control of that 12.5% from this point on.

It's true that SS is not going to be a "CRISIS" for us, but for our children, yes, it will be. SS isn't something that can be fixed 5 or 10 years before it implodes, so it does need to be addressed long before that time. I also don't see it as a "crisis" give everything else that's going on. As one poster pointed out, it's about priorities right now, and SS is definitely not number 1 right now. Yes, it needs to be fixed, and it needs to be done very soon.

[Lugnut]

13. Consider this

When I was 30 years old I planned to work for another 35 years at least. When I was 48 I became disabled through no fault of my own and was immediately unable to work. How would that affect your planning?

Social Security is not an investment plan. It's an insurance plan. I am grateful that it was there for me when I needed it.

[jtb33]

17. Good point, however...

If you were injured on the job, or a job-related task, your employer should be paying. If it was from an accident (like auto accident) and someone else was at fault, their insuance should be paying... if it was your fault, well then it's your resposibility, hence your money (money you paid into social security) goes back to you. Don't get me wrong, I am not saying that SS should be abolished (seems like that's what you may have thought I was inferring), but I think we all should have control over the money we put into SS. If you want to invest 100% of it into tech stocks and you lose it all, it was your fault for doing that (for example). If you want to leave it all in the govt's hands, then so be it.

[Lugnut]

24. No accident either job related or otherwise

There was no explanation as to how one of my cervical vertebra slipped out of alignment and impinged my spinal cord causing permanent damage from the neck down. The neurosurgeon had no clue.

Nobody seems to be addressing the fact that SS is not just for old people.

Now, if you invest 100% in tech stocks and get burned who gets to care for you when you do get old? The government? I don't believe that the average person is investment savvy. You could probably invest your money wisely but not everybody can. Just suppose that you invested in Enron.

[jtb33]

34. That's my point...

You wouldn't HAVE to invest your SS money, but we should have the option to do so. If someone want to invest it in high-risk categories, then if they lose it all, whose fault would that be?

[podnoi]

16. Your family does not get the money if you die...

"Any funds that remained available under these annuities after death would go to the Social Security program; the money could not be inherited. While that would assure retirees a monthly check while they live, it also could undercut what polling shows is one of the most persuasive arguments on behalf of personal accounts - that they can be inherited. "

[jtb33]

18. What are you trying to say? eom

[finecraft]

20. Read this...the background press briefing on SS

http://mywebpages.comcast.net/duncanblack/ssb.txt

Bush's plan is crap. You will be able to divert a portion of your SS into a "private" account. But when you retire, you will be FORCED to take an amount from your private account equivalent to a sum, when added to your social security benefits, that would generate income equal to the poverty level income at the time of your retirement. You will be FORCED to buy an annuity from the government with these funds. When you die, the ownership of the annuity reverts to the annuity holder.....ie THE GOVERNMENT. It's a shell game.

[Romberry]

31. You misunderstand

Social Security is not a series of "private accounts." The money you pay in does not go into an account for you. The money you pay in is used to fund current benefits for retirees, survivor benefits, and benefits to the disabled just as the people who came before paid in money that was used to the same purpose.

Social Security is about social justice. It's about lifting seniors out of poverty and keeping widows and children of the disabled off the streets. Your entire post reads like someone who is fundamentally opposed to the very idea of Social Security and when you post "MINE" in all caps you tend to come across as someone who is invested in the culture of greed rather than the culture of community.

Social Security is a contract for social justice, not a retirement or investment plan. It's the price we pay for living in a nation that is fundamentally better than what came before. It's the price of a civilized society. Even if you die and never get a penny, you do indeed benefit from Social Security. Everyone does.

On the "crisis" front....if the economy grows fast enough that you can earn six or seven percent returns on conservative investmemts, there is no Social Security crisis at all.

I don't mean to sound glib but I really think you would be well served to read up on the history of Social Security and on the plight of the elderly prior to the time Social Security came into being. I'd also recommend a visit to ThereIsNoCrisis.Com

[booksenkatz]

32. But don't you agree that if they suddenly are going to claim that these

funds ARE private accounts, that these funds ARE "our money," then I should RETROACTIVELY be able to consider the 30 years my husband and I have paid into the fund as OURS, to take as a loss on our investments?? We should be able to take these 30 years as a 30-year investment loss on our 1040, since we won't see any of this money. We could have put those 30 years of money into some damned good investments, but because of Bush's arbitrary decision, we won't see ANY of the money. The least they could let us do is let us take it as a loss.

I *totally* agree with every word you wrote. These funds should be a safety net for all of us, NOT an investment scheme. What if everyone invested in Enron? Where would the government get the money to take care of millions of penniless elderly? (As if many of them are not virtually penniless now, but at least SS is something, and something is better than nothing. We still need to do better by all of our seniors -- not all of them are living the high life.)

[prolesunited]

45. That's because SS is an insurance plan

NOT an investment or savings plan. If you have a home, you have home owner's insurance and pay into it every month. You're pooling your resources with others and sharing risks.

If you have a fire or natural disaster, it keeps you from being homeless or impoverished. Do you feel cheated out of your premiums? Do you think your family should inherit them.

And if your go-it-alone mentality worked so well, why were there so many elderly, disabled and widows living in poverty prior to its implementation. But, I guess that's not your problem, is it?

[Rose Siding]

14. AP too: Only One Side Told in Bush Soc. Sec. Pitch

GREAT headline...

By CALVIN WOODWARD, Associated Press Writer
WASHINGTON - The devil was in the missing details Wednesday night when President Bush (news - web sites) showcased his Social Security (news - web sites) plan and claimed advances on jobs and against terrorism that don't tell the full story.

Bush explained in detail how, under his proposal, younger workers would be able to divert some of their Social Security payroll taxes into private accounts "so you can build a nest egg for your own future."

Nowhere in his State of the Union speech did he give the other side of the equation — that Social Security benefits for those workers would be reduced as a result. He stated "your account will provide money for retirement over and above the check you will receive from Social Security," without explaining that check would be smaller.

Moreover, he seemed to issue a guaranteed return on investment for people putting some of their retirement money in the market, saying: "Your money will grow, over time, at a greater rate than anything the current system can deliver."

http://story.news.yahoo.com/news?tmpl=story2&u=/ap/20050203/ap_on_go_pr_wh/state_of_union_fact_check

[Erika]

15. Bush forgot a few points

One of them is that any return of over 3% would go back to the bankers for administration of a separate pool for those who lose in the market. Nor did he mention that the max of 3% would be only after the bankers took their fees.

[Itsthetruth]

21. So What's The "Problem"?

Old-Age, Survivors, and Disability Insurance Trust Funds, 1957-2003

Year End Assets After All Benefits Were Paid

1957 23,042 23 billion, 42 million dollars
1958 23,243
1959 21,966
1960 22,613
1961 22,162
1962 20,705
1963 20,715
1964 21,172
1965 19,841
1966 22,308
1967 26,250
1968 28,729
1969 34,182
1970 38,068
1971 40,434
1972 42,775
1973 44,414
1974 45,886
1975 44,342
1976 41,133
1977 35,861
1978 31,746
1979 30,291
1980 26,453
1981 24,539
1982 24,778
1983 24,867
1984 31,075
1985 42,163
1986 46,861
1987 68,807
1988 109,762
1989 162,968
1990 225,277
1991 280,747
1992 331,473
1993 378,285
1994 436,385
1995 496,068
1996 566,950
1997 655,510
1998 762,460
1999 896,133
2000 1,049,445
2001 1,212,533
2002 1,377,965
2003 1,530,764 One trillion, 530 billion, 764 million dollars.

Social Security Trust Fund assets are projected to increase to nearly 6 trillion dollars by 2018.

[Erika]

22. Yes, the rates were raised on current workers years ago

to account for the loss of workers paying in the future when there would be fewer of them.

His patronizing attitude is disgusting. He says he is concerned about the SS available for his twins when they reach retirement. Prescott Bush and his connections to Hitler and Saudia Arabia guarantee that the Bush twins will always fit in the elitist group.

[Erika]

25. The important factor is that the government raised

contributions to SS years ago to assure there would be monies for future recipients when there were less paying in. We all need to get on our DC reps about this. Bush has been silent about this.

[daleo]

26. One way or another, this is to pay for tax cuts to the rich.

The two ideas came along at the same time for a reason - ultimately they are linked, although the form of the linkage will be obscured.

[MADem]

27. And let's not forget all those fees that those "managers"

of these private accounts will skim off for their "management" of your assets. This is a fucking gift to the whores of Wall Street. And it screws blue the people under the magic age of 55.

I agree with those who warn these young kids that sure, they can keep their money, and they can keep mama, and granma, and Uncle Fester too, down in the basement on army cots!!! Hey, free babysitting!!! It might be hard for gramma to catch the two year old, being on a walker and all, but it beats paying the teenager down the street....and hell, old people don't eat much! All in together, there's some family values for ya!

[daleo]

28. True, this is also to pump up the stock market.

Bush's economic policies have basically destroyed growth, so this (and devaluation of the dollar) is meant to give the semblance of growth. Essentially, they plan to force people to invest in the market, whether they want to or not. And killings will be made by fund managers fleecing naive sheep.

Republican administrations are generally more about fighting over the pie than growing it (to use Clinton's imagery). The BFEE administration is the absolute epitome of that.

[wishlist]

43. Pumping up our capitalist economy and stock market is what Bush wants

Bush and his RWingers are not trying to 'save' the Social Security program to help the average American, they are simply trying to use it as a way to create an ever expanding source of funds into the stock market to prop up the economy and wealthy investors. They still believe in Reagan trickle-down economics, hate social programs and and the fact that the benefit formula used in the current program provides a bit of a subsidy favoring low earning workers and is a very good deal for many low income people.

[Stockholm]

29. Is it just me or does the abbreviation of social security creep you out?

I have lately seen a lot of people referring to social security as SS. This abbreviation even though correct sets off alarm bells big time for me. Maybe it´s just because I´m European.

Seems almost Rovian?

[Borgnine]

30. Everytime I see "Bush's SS Plan"...

...I accidently think it means Bush is resurrecting a different "SS".

[Massachusetts]

35. Not worth discussing because there is NO CRISIS and

The Bu$h plan is NO PLAN! tweak what has proven to be a successful program, so that there will be money in the account for FUTURE generations.

Practice Opposite Politics; Whatever these tyrants say, do and think the opposite and you'll be right.

[HuckleB]

36. Divide and Conquer.

Gotta find a way to get that money to his friends on Wall Street.

[happynewyear]

38. what about those that are disabled?

* did not say one word about those on SSDI (Soc. Sec. Disability Insurance). I've been so upset by this news that I was up half the night worrying about it.

I guess no one really cares do they? :(

:kick:

[KayLaw]

44. I think people care

They just don't know the answer yet. I'd like to know about widows, too.