WaPo's Samuelson -Cut My Benefits (only cut in 20 years is age 67 in 2027)

[papau]

http://www.washingtonpost.com/wp-dyn/articles/A9446-2005Feb8.html



washingtonpost.com
Cut My Benefits

By Robert J. Samuelson

Wednesday, February 9, 2005; Page A23


<snip>Give Bush credit for broaching, however indirectly, these sensitive issues. Criticize the Democrats for their limp "how dare you" response. But recognize that Bush's chosen vehicle for overhauling Social Security -- "personal" investment accounts -- distracts from what ought to be the central question: How much should younger and poorer taxpayers be forced to pay for older and richer beneficiaries?
<snip>

Long ago we should have begun gradually raising eligibility ages and trimming benefits for wealthier retirees. Aside from a glacial increase of Social Security's normal retirement age to 67 (in 2027), little has been done. This sort of overhaul founders on popular myths. One is that, because retirees are generally poorer than workers, it would be unfair to cut their benefits. Some statistics seemingly confirm the stereotypes: In 2003, for instance, the median income for households 65 and older was $23,787, about half the median for households younger than 65 ($50,171).

But the numbers mislead. For starters, nearly 5 million of the 65-and-older households (about a fifth) have incomes exceeding $50,000, including 1.4 million with incomes over $100,000. Elderly households are also smaller. Few have children; many are singles. Adjusting for that, average incomes per person among those ages 65 to 74 are higher than average individual incomes for all those younger than 44, reports the Conference Board. In many ways, the old are better off than the young. Virtually all (99 percent) have health insurance, mainly Medicare. By contrast, 82 percent of the under-65 population is covered. Most elderly are homeowners, and three-quarters have fully paid their mortgages. Among younger homeowners, three-quarters have mortgages.<snip>

Now, these achievements wouldn't exist without Social Security and Medicare. They are triumphs. Social Security provides about 40 percent of the total income of the 65-and-older population. Among the poorest fifth, it provides about 80 percent. But their very successes should not insulate them from change. Along with being safety nets, they are also increasingly exercises in reverse Robin Hood. Younger and poorer taxpayers are supporting older and wealthier retirees.<snip>

[jpgray]

1. Social Security is not a retirement plan

It is meant to protect ALL SENIORS from poverty in old age. That's it. It isn't about "getting out what you put in", or "the richer giving the poorer money", it is simply about making sure all our old folks can live with dignity once they are unable to work. Why is this always framed as some sort of "I paid in, when do I get mine?" sort of plan?

[nodictators]

2. Social Security is NOT a welfare program. Affluent seniors deserve

their benefits too. If they paid their money into SS, they deserve the benefits. And if they spend their SS money, it helps the economy. Surely Samuelson, a right-winger, has heard of the multiplier effect.

Somehow Samuelson figures that if "nearly 5 million of the 65-and-older households (about a fifth) have incomes exceeding $50,000," then no seniors deserve SS benefits.

BTW, probably one-half of the $50,000+ comes from SS, so he's double counting.

Then he claims the achievments of SS, "are also increasingly exercises in reverse Robin Hood. Younger and poorer taxpayers are supporting older and wealthier retirees."

That's wrong also. Younger and poorer people are putting money into SS so that they will be comfortable in their senior years. The fact that more affluent younger people are also contributing to SS is irrelevant.