Bush administration playing the same "bait-and-switch" game with SS argument as it did with the "War against terrorism"

[ECUHITMAN]

According to the GOP:

"Younger Americans would be allowed to invest a portion of their payroll taxes on their own. In exchange they would receive a lower government benefit than they are now guaranteed, on the assumption that the proceeds of their investments would make up the difference. In addition, though, even younger voters who choose not to establish personal accounts would receive a reduced government benefit under Bush's plan, according to GOP congressional officials who have been briefed on the plan."

Link: http://abcnews.go.com/Politics/wireStory?id=544820&page=3

 

[Darkhawk28]

Originally posted by: shira
I find it interesting that no one has addressed the issue I specifically asked about: The adminstration is slipping private accounts into the discussion, as if privatiziation somehow helps solve the SS funding problem. In fact, privatization is irrelevant to the SS funding problem.

As to REAL solutions presented by the left, here are a few:

Raise the wage limit subject to SS taxes from the current $90,000 (with yearly wage-growth increases) to $140,000 or so.

Decrease the time period during which the SS full-benefit age shifts to 67 (currently, this shift will take another 20 years or so, IIRC).

Transition to an even higher full-benefit age (70 is the most often-cited number).

Reduce benefits (I think we all know this has to be part of the solution), using various proposed formulas: 1. Change the yearly benefit increase to a formula not tied (or less tied) to wage growth. 2. Compute benefits based on a forumula which takes into account outside income (those with higher outside incomes would receive benefits less generous than those with lower incomes, all other things being equal).

Raise the SS tax rate (the one strategy specifically rejected by the Administration).

Raising the tax rate isn't necessary, lowering benefits isn't necessary... remove the cap but formulate the % rate on a declining scale starting at $110k or so.

In other words....

Up to $110k, same % rate as today (believe it's 6% now)...
$110k-$120k, 5.75%
$120k-$130k, 5.50%
$130k-$140k, 5.25%
and so on and so on... something like this.

This was a hypothetical example...

I don't think a billionaire should have to put in 6% of his gross receipts to receive a relatively paltry SS check. By the time it hits a billionaire (or even a millionaire), the % rate should be like 0.25% or something like that. LOL.

 

[ECUHITMAN]

Just so everyone is clear according to the Congressional Budget Office states that:

"CBO projects that under current law Social Security outlays will first exceed revenues from payroll taxes and taxation of benefits in 2020 and that the program will exhaust the trust funds in 2052. After the trust funds are exhausted, Social Security spending cannot exceed annual revenues. As a consequence, because dedicated revenues are projected to equal 78 percent of scheduled outlays in 2053, CBO finds that the benefits paid will be 22 percent lower than the scheduled benefits."

Link: http://www.cbo.gov/showdoc.cfm?index=6064&sequence=0

This DOES NOT mean there is nothing wrong with SS, it just means that it will not be bankrupt in the year 2018 as some people have stated in earlier posts. If you read down to the bottom the charts and tables get a little confusing (at least I find them confusing) but it shows that SS will be around in the year 2100 but it will be a hugh part of our national budget. The current laws do need to be changed (at least according to the CBO, but I have yet to see anyone suggest what to change them too.

Allen Greenspan does agree with encouraging Americans to set aside money for retirement, and he agrees with that part of Bushs plan. Even AARP agrees that people need to set money aside, but I do not think Greenspan or AARP agrees with the price tag of how much it would cost to do that.

 

[Tom]

Originally posted by: Starbuck1975

Bush says by 2018, SS will start toward bankruptcy. That's just not true. He and the rest of the Republicans need to stop lying and come with an honest approach.

The system will be utterly bankrupt by 2040 based on current studies...that is the point at which people taking out of social security will exceed those putting into the system to the extent that it could cause a financial crisis...that trend begins around the 2018 mark...so it is true.

That is not right. social Security will still be taking money in, so it won't be "bankrupt". If all the "studies" are averaged out, then benfits could still be paid at about a 75% rate, even if nothing is done.

But the biggest issue is, no one knows what future economic growth will be. And what is doubly ironic is, if the plan to use private accounts is going to work, the economy would need to perform as it has in the past, but if the economy performs as it has in the past, there won't be ANY short fall in Social Security.

So the whole issue of private accounts doesn't have anything to do with fixing Social security, it's about doing away with social security.

 

[jpeyton]

Ha ha, this just keeps getting better

The top Senate Republican pushes for a delay in the vote on SS reform (probably because support is astronomically WEAK) and mentions any reform that will be voted on might NOT include private accounts!

In your face Dub!

 

[NJDevil]

Originally posted by: Starbuck1975

Bush says by 2018, SS will start toward bankruptcy. That's just not true. He and the rest of the Republicans need to stop lying and come with an honest approach.

The system will be utterly bankrupt by 2040 based on current studies...that is the point at which people taking out of social security will exceed those putting into the system to the extent that it could cause a financial crisis...that trend begins around the 2018 mark...so it is true.

Oh yes, this is where I use Penn's factcheck.org Thank god for the annenberg public policy center to disprove such falsehoods. Bankrupt = they will pay out 75% of the benefits they do today (maybe a few percent less), which is actually higher than Bush's plan would pay out.
Maybe that's why people (reps and dems) are not warming up to this plan.

fact check article

 

[Genx87]

Bush says by 2018, SS will start toward bankruptcy. That's just not true. He and the rest of the Republicans need to stop lying and come with an honest approach.

Sure it will, what made you think otherwise? That is the point where it stops taking in as much money as it spits out. Eventually it will bankrupt about 2042. That means they can no longer hide the money they will need to come up with by paying back IOUs and instead will come directly from the tax stream to the tune of over 1 trillion a year. Oh did I also mention they will be required to cut benefits by 20% at this time??

Let's see these studies....

http://www.ssa.gov/OACT/TR/TR04/VI_OASDHI_dollars.html#wp129340

Right from the horses mouth.

the economy would need to perform as it has in the past

The problem with this argument is in the past we have had the demographics on our side. In the next 80+ years this simply wont be true and thus this is where SS falls flat on its face. The economy will grow but that doesnt mean it will somehow pay for SS.

 

[Darkhawk28]

Originally posted by: NJDevil

Originally posted by: Starbuck1975

Bush says by 2018, SS will start toward bankruptcy. That's just not true. He and the rest of the Republicans need to stop lying and come with an honest approach.

The system will be utterly bankrupt by 2040 based on current studies...that is the point at which people taking out of social security will exceed those putting into the system to the extent that it could cause a financial crisis...that trend begins around the 2018 mark...so it is true.

Oh yes, this is where I use Penn's factcheck.org Thank god for the annenberg public policy center to disprove such falsehoods. Bankrupt = they will pay out 75% of the benefits they do today (maybe a few percent less), which is actually higher than Bush's plan would pay out.
Maybe that's why people (reps and dems) are not warming up to this plan.

fact check article

Not only factcheck.org but the CBO website and the SS trustees info totally squashes Bush's insinuations of impending doom. Is there a way to avoid less than 100% benefit output? Sure there is. Get some Republicans, some Democrats, Greenspan and a few others and work out a workable plan. A tweak is all that is necessary, not a radical makeover or removal.

The first thing to help SS would be to have sane fiscal policies.

 

[NJDevil]

Originally posted by: Genx87

Bush says by 2018, SS will start toward bankruptcy. That's just not true. He and the rest of the Republicans need to stop lying and come with an honest approach.

Sure it will, what made you think otherwise? That is the point where it stops taking in as much money as it spits out. Eventually it will bankrupt about 2042. That means they can no longer hide the money they will need to come up with by paying back IOUs and instead will come directly from the tax stream to the tune of over 1 trillion a year. Oh did I also mention they will be required to cut benefits by 20% at this time??

Let's see these studies....

http://www.ssa.gov/OACT/TR/TR04/VI_OASDHI_dollars.html#wp129340

Right from the horses mouth.

the economy would need to perform as it has in the past

The problem with this argument is in the past we have had the demographics on our side. In the next 80+ years this simply wont be true and thus this is where SS falls flat on its face. The economy will grow but that doesnt mean it will somehow pay for SS.

If they do nothing, they will still be able to pay out most of the benefits they do now. This is not guaranteed with Bush's plan. Borrowing the initial two trillion (i think we need to borrow 9 trillion total to finance this but i'm not sure) could actually make everything worse off by slowing down our economy. Debt has a habit of doing that.

Edit: I'm for any solution that doesn't involve adding more debt. I wouldn't mind raising some of the taxes on SS, cutting benefits, raising retirement age (the best choice IMO as people are living longer), raising the amount that one can be taxed on etc.

 

[Genx87]

ot only factcheck.org but the CBO website and the SS trustees info totally squashes Bush's insinuations of impending doom

I have to ask if you even bothered to read my link.

 

[Steeplerot]

Originally posted by: Dari
I have my own simple solution to the crisis. Women should have an average of at least three kids. That way, the progenies can support the progenitors without a rise in taxes. Of course, some women might object to this.

Plenty of men too.

 

[NJDevil]

Originally posted by: Genx87

ot only factcheck.org but the CBO website and the SS trustees info totally squashes Bush's insinuations of impending doom

I have to ask if you even bothered to read my link.

Yes, there will be a shortfall but the system will be far from dead. They can still use money coming in to pay for people who are on the system, though with smaller payments. However, those payment cuts are smaller than the cuts people would face if bush's plan were put into being.

Also, there would be even less of a problem if we actually had money collecting interest as opposed to money from the SS being taken by the administration to pay for other things.

 

[Genx87]

Yes, there will be a shortfall but the system will be far from dead. They can still use money coming in to pay for people who are on the system, though with smaller payments. However, those payment cuts are smaller than the cuts people would face if bush's plan were put into being.

Based on what? He hasnt presented a concrete plan yet. What we do know is he wants to incorporate private accounts that will allow a person to invest 4% initially each year into the private account. They then forfeit their SS benefits when they retire in lieu of this. So the govt still gets to rake in 8% of your income to pay the person who doesnt opt out.

Also, there would be even less of a problem if we actually had money collecting interest as opposed to money from the SS being taken by the administration to pay for other things.

Um, congress authorizes all raping of the SS fund, not the administration.

 

[Darthvoy]

Wtf are you talking about. The dems have proposed to raise taxes on the wealthy and up the income cap, but Bush sided with his rich buddies and decided that's not an option. It appears Bush is trying to come up with something where the rich would pay the least as possible.

 

[charrison]

Originally posted by: Darthvoy
Wtf are you talking about. The dems have proposed to raise taxes on the wealthy and up the income cap, but Bush sided with his rich buddies and decided that's not an option. It appears Bush is trying to come up with something where the rich would pay the least as possible.

Raising payroll taxes/increasing the payroll cap is pointless as long as SS surpluses go into the general fund and get spend. We cannot raise SS tax unless we reform how SS deals with the incomeing funds.

 

[Jhhnn]

Of course it's bait and switch- it's the Bush Admin. Kinda like Saddam- Osama- Al Qaeda- Iraq- WMD's- Nuclear program- Terrar!

What they really don't want to talk about is that the problem with SS is that the bonds sold to the trust will begin to demand negative cashflow from the general fund to SS ~2018. Not just interest payments, like the rest of the debt, but actual payment on the principal. Their current looting spree will preclude that, as they fully intend to put the govt so far in the hole that we'll never get out. When push comes to shove, the international bankers will get paid while SS recipients will get screwed, plain and simple.

They're not trying to "save" SS, at all, conservatives have hated it since inception, because they envy the cashflow, and want to get a piece of it- hence the much sought after diversion of funds to Wall St. Imagine what a few hundred billion per year forced into the market will do for the price of the shares they already own... Yummy. Not that the companies involved have done anything to deserve a hike in the share price, other than lobby the repubs... If the market is such a great deal, why are they so anxious to sell us what they already own?

The only honest answer is to quit borrowing money, to actually start paying down the debt, so that we'll be in good financial condition when that 2018 crossover occurs. Not going to happen with the Repubs running the show, and anything else they propose is merely a sham, a distraction from the greatest scam ever attempted- bankrupting the US govt...