Keep ‘Security’ in Social Security -if only CPI index, todays Bene cut 75%

[papau]

http://www.nytimes.com/2005/01/16/magazine/16SOCIAL.html?ex=1263618000&en=724735416bdbfdd8&ei=5090&partner=rssuserland

*Keeping the ‘Security’ in Social Security*
Black Hills/Portal.com
Jan 18, 2005

The Problems with Privatization

As the public debate over Social Security begins, the White House has not yet released a plan. However, one key component in the debate is the notion of "privatization," allowing workers to invest a portion of their Social Security payments in the stock market.
...
+++++++++++++++++===========================+++++++++++++++++
KEY POINTS

The President's Plan Would Cut Guaranteed Social Security Benefits. In the President's plan, benefits will be cut by tying benefits to the rise of inflation instead of wages. “Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century.”

Benefits Would be Cut By 45 Percent or More. By changing the way Social Security benefits are calculated, seniors would see their benefits greatly reduced. “According to the Social Security Administration's chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would FALL by MORE THAN A QUARTER. A retiree in 2075 would receive 54 percent of the benefit now promised."

The President's Proposal Will Leave Seniors Behind as Standards of Living Increase for Other Americans. By indexing Social Security to inflation, seniors will maintain the same standard of living at their time of retirement while the incomes of their neighbors will continue to rise. "Social Security benefits currently equal 42 percent of the earnings of an average worker retiring at 65. Under the new formula, that benefit would FALL to 20 percent of pre-retirement earnings. Future retirees would, in effect, be consigned to today's standard of living."

KEY TERMS

Wage Indexing: the average benefit for all retirees of the same age is increased each year according to the growth rate of average wages in the economy from the previous year.

Price Indexing: linking benefits to changes in consumer prices from year to year. Because prices do not rise as fast as wages, benefits will not necessarily keep up with the standard of living of society as a whole.


posted at: http://www.blackhillsportal.com/npps/story.cfm?ID=345

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[underpants]

2. Different time, different plan, not comparable.

The WaPo article on Archer's plan states that he wanted to pay for the change and the initial costs from the budget surplus which of course no longer exists. Not comparable now. THIS IS AN EDIT FROM THE ORIGINAL POST.




The WSWS link shows five plans.

The 21st Century Retirement Act- calls for 2% diverted BUT raising retirement age to 70 in 2037 and cutting cost of living by .5%

The Moynihan-Kerrey plan, also calls for 2% diverted (1% EACH from each employEE and employER and raise the retirement age to 68 in 2023, and then to 70 in 2073.


The Kasich and Roth plans, call for individual retirement accounts by diverting a portion of the federal budget surplus (WHOOPS not there anymore; Kasich's plan would provide equal amounts to each worker, Roth's plan would make shares proportional to earnings, favoring those with higher incomes.

The other plans are not really in the realm of consideration. The point here is that, as far as we can tell, W's proposal calls for a pie-in-the-sky dream of diverting while not raising retirement age and not cutting benefits-basically funding it completely through incurring more debt. The comparisons to Clinton discussing privatization as opposed to W trying to implement it yesterday make it incomparable as well.

*-BTW no one knows what plan W will have proposed but I am willing to bet that it will be done at the last minute with almost no time to read, consider, and get citizens's feedback before voting.

[papau]

3. Clinton did not say these things - private acct supporters said them

The WaPo 12/9/98 simply says "include some form of stock market investment for the first time in the program's history." - which is the trust fund investing in equity rather than gov bonds.


The WaPO "Special Report on the 2003 Archer private Account proposal is again a lie - there never was a 1998 Clinton administration plan that features individual accounts inside the Social Security system - but if the media lies the Democratic Party is bound by that lie?

http://www.washingtonpost.com/wp-srv/politics/special/s ...

"Diverging from a competing 1998 Clinton administration plan that features individual accounts inside the Social Security system, Archer has proposed allowing Americans to invest 2 percent of their annual income in selected private investment funds--marking a fundamental break with the traditional Depression-era program."

The 21st Century Retirement Act- that called for 2% diverted w/ raising retirement age to 70 in 2037 and cutting cost of living by .5% was not endorsed by Clinton. And the Moynihan-Kerrey plan was certainly not endorsed by Clinton.

The most Clinton said was that all plans were on the table - 'cause if he didn't the GOP would have picked up there ball and left the game - and indeed that is what they did when they could not have their way.