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A 2nd Democrat for Social Security Changes

Senate Social Security Reform Democrat Sen. Tom Carper D-Del

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#41 Gefiltefishmon

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Posted 14 February 2005 - 02:25 AM

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So, like bottled water, and those nice folks in Nigeria who keep wanting to give me millions, SS is yet another scam. It's a sword politicans of every flavor like to rattle when they want attention, and tweak and meddle with to show how compassionate they are while they gleefully swindle us out of our money. And we re-elect the bastards because of what a great job they're doing spending our trillions of taxes and retirement savings.

I don't care what anyone say's, I've always liked that Nick! Anyone brave enough to have the avatar he does in this time is alright!

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#42 Spectacles

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Posted 14 February 2005 - 07:26 AM

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Nick: If the damn politicians--on ALL sides would just keep their grubby little hands off of Social Security and run it like a retirement program rather than a political wedge and wealth-redistribution scheme--we'd all be a lot better off and there'd be no problems at all.

No arguments here. The problem is the payroll taxes collected are immediately spent--and not just on social security. It's become a piggy bank to raid whenever the government overspends, and that's almost always.

Foremr Treasury Secretary Paul O'Neill has an interesting proposal, which will likely get overlooked. (And by the way, he's not keen on Bush's private accounts. It seems to me that O'Neill's plan is closer to Clinton's, with money collected being invested and saved.)

http://www.nytimes.c...0&oref=login


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My answer is that we should establish a process that will produce a substantial annuity for every American at retirement age.

By substantial, I mean at least $1 million. In order to create a real, fully financed annuity of this size, people must begin saving when they enter the work force. The saving needs to be continuous, and it needs to be left intact so that compound interest can work its magic.

We can do this. We already have a process in place that requires that we give the government 12.4 percent of our income in the name of Social Security.

The problem with the current arrangement is that our contributions are a tax, not savings. So we should begin by agreeing that we are going to require all Americans to save, individually, to provide for their financial security in old age. After all, if we don't save on our own for our retirement needs, who will do it for us? Our neighbors? Our children? In a civilized society we have a responsibility to take care of our own needs so as not to be a burden on others.

Yet we can also recognize that some people may work hard during their lifetimes, and save 12.4 percent of their income annually, and still not produce enough for a $1 million annuity when they retire. The federal government could then make annual, supplemental deposits to their accounts from its general revenues to make up the difference. Those of us who are more fortunate can help those who are not. (It is useful to remind ourselves that the federal government is "we the people" - and the federal government doesn't have any money unless it takes it from "us the people.")

Let me define what I mean by financial security. Financial security begins with ownership of real assets; so the money saved each year in this plan would be the property of the person who saved it. I would use the existing Social Security collection process because it is already in place, everyone understands it and its costs are relatively low.

The money would then be invested in broad-based index funds with an objective of matching the overall rate of return for all investments in the United States. These funds typically have very low costs because they're not actively managed. That means there would be no windfall profit for stockbrokers in this system.

Further to the definition of financial security: it means enough money in retirement for all needs - food, clothing, shelter - and including medical needs like prescription drugs.

If we could work toward this idea, we could reduce our current dependence on the political process for these necessities. When Congress passed and the president signed legislation last year expanding drug coverage in the Medicare program, many politicians acted as though they were granting us some great beneficence. But they don't have any money (or the benefits they pay for) to bestow unless they first take it away from us in taxes.

As I write this I can imagine the chorus of pundits saying, "This isn't politically possible." Why not? Because it is too complicated for people to understand? Or because the only way to approach change in our society is through small incremental steps, like the president's tepid notion of a limited, voluntary diversion of Social Security taxes into small private accounts?

Baloney, I say. What stands between a truly worthy aspiration for our society and its realization is political leadership with the courage to dream big.

The social policy technocrats will have a more legitimate concern: how do we get from where we are to this new and better condition? While I was secretary of the Treasury, the Federal Reserve chairman, Alan Greenspan, and I worked on an idea to jump-start the changeover by borrowing enough money to put money into individual accounts now, beginning with the youngest workers. We did some very rough calculations that showed for $1 trillion, we could transfer the population from age 18 to the mid-30's into this new arrangement.

The value of doing this is twofold. First, it hastens the transition to the new program for society overall. Second, the $1 trillion of borrowing now (to be paid from general revenues over the next 20 years) makes a substantial dent in the unfinanced liability of the current program.

As to the current program, everyone above the age of 35 could keep their current relationship with Social Security and their benefits intact. Their children, though, would have a better life. And that, after all, is the promise on which this nation has been built.

Clinton's plan, by the way, was shot down by the financial market managers and others who were uneasy about the government making investments in the private sector. They said there was potential for abuse. The Bush administration has talked out of both sides of its mouth on the matter of government management of the private accounts. Here's why: (1) if the money is managed by private contractors, they stand to make a goodly fee, which reduces the returns and (2) if the government manages the accounts, the plan is doing what the financial markets yapped about under Clinton's plan.

Another question in all of this is how on earth can the government lose additional revenue. Take a look at the forthcoming budget cuts. Almost every department takes a hit--defense, education, agriculture, homeland security, etc. Now, I'm all for reducing waste, but I suspect that these cuts are going to create some holes that surprise us all. Some of the holes will be filled in thanks to higher state and local taxes, but some of us will see less law enforcement personnel, fewer school programs for poor kids, no FA-22's (sorry CJ ;)), reduced or eliminated Pell Grants, etc. The belt tightening is going to be a little uncomfortable for everyone. But, if we're going to begin to get a handle on the deficit without rolling back the tax cuts for the wealthy, we have to do it.

So, any effort to make an honest retirement savings program out of social security--one in which the politicians can't spend the payroll tax to cover costs of other programs--is going to result in massive cuts in services and programs or higher taxes.

In short, the choices aren't pretty, as I understand them. Granted I'm no economist and may be misinterpreting the picture, so I welcome any informed corrections.
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#43 Zwolf

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Posted 14 February 2005 - 09:27 AM

Back when Bush was running for Congress, back in 1978, he claimed that Social Security would be bankrupt in 10 years.  (Here's evidence but DON'T click that if you're gonna whine to me 'bout Bush-bashing, 'cuz it's not a real friendly article.  You've been warned...) So, doomsaying about Social Security is a long-time hobby.

The fact is, Social Security would be just fine if the damn government would keep their frickin' hands off of it, they way they're supposed to.  But they keep borrowing from it and meddling with it and treating it like it's their money.  And it's not just Bush who's done that - Clinton did it, too.  It's bipartisan chicanery, and it should stop.  

The new plan would be a mess, but I've talked about that on this board before.  I've already got money invested, and so I've seen how those things go... it's not reliable.  Sometimes you get more, sometimes you take a bath on your investments.  In the past four years, we've broken even... and that's not what you invest for.   So, I do encourage everyone to invest as much of their money as possible, but it's good to know that there's a stable Social Security that's not subject to the whims of the market.  Also, it's not as good a deal as it's been painted to be.  The claim "the government wouldn't be able to touch it," but that's absolutely not true.

As it stands, this reformation plan is little more than an enabler for the government to continue their fiscal irresponsibility, and, as a strong fiscal-conservative and deficit hawk, I am not for any such thing.  And I don't care if it's a Republican or a Democrat proposing the reforms - as they stand, they're not a good idea, and could lead to disaster, especially with the way our economy is trending, and with things like Enron being hardly unique (you just wait until somebody looks into Clear Channel... mark my words, that will be a mess when it gets revealled to the public).

I don't think they're very serious about these reforms, anyway.   It would be enormously expensive to enact them all, and there's been no money whatsoever allocated for it in the budget.  It's just talk...

Cheers,

Zwolf
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#44 Delvo

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Posted 14 February 2005 - 10:40 AM

Zwolf666, on Feb 14 2005, 09:27 AM, said:

The fact is, Social Security would be just fine if the damn government would keep their frickin' hands off of it, they way they're supposed to.

<{POST_SNAPBACK}>

That's terribly naïve. How can a system that was intended as partial support and aid for people who had already lived 2-4 years past the average life span at the time, based on money taken from over a dozen workers employed at the time each retiree started withdrawing, possibly be expected to keep paying essentially full costs for people who now start withdrawing from it 15 years before dying (and that number only keeps going up, not down), with each added year of their lives being tremendously more expensive than the last (getting to be more than most workers earn per year), while the low reproduction rate in the country means that each year there are fewer and fewer productive workers to take the money from just when the number of retirees is about to blow up? It can only get harder to pay for year after year as long as retirees' life spans, the number of retirees, and the cost per year to keep each one alive all keep going up much faster than the number of workers to take money from and their average wealth do (if they even go up at all). That's a fundamental imbalance of cash flow outward to cash flow inward, and there's no way around that fact.

#45 Zwolf

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Posted 14 February 2005 - 11:31 AM

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That's a fundamental imbalance of cash flow outward to cash flow inward, and there's no way around that fact.

****** You may have a point there, and I'm far from a financial expert - that's why I hired one to handle my investments for me.   So, I could be wrong...  but, they do raise SS rates from time to time, and people's salaries go up, thereby increasing the amount taken as a percentage... so, it's not nearly as big a crisis as you're painting it.  But still, they should probably look into some sort of reform... but the plan that Bush is proposing takes the "security" out of Social Security.  I have money invested in things like he's talking about already, and I've actually lost a lot of money in them.   And if something along the lines of another WorldCom/Enron debacle shows up (and it will - those are far from the only companies doing stuff like that - they're just the ones who've been caught), then that could destroy a lot of people's SS if Bush's plan is implemented.   If they can reform social security in a way that has zero risk, fine.  Until they do, though, they shouldn't try to "fix" it with something that could make it worse.  

People definitely should invest some of their money in stocks, etc. - they shouldn't expect to rely on Social Security completely.  If they do, they'll be in trouble, because it doesn't pay out enough to live on (and it still won't, even under Bush's plan in a best-case scenario) - people will need other investments.   But, SS could remain what it is now - a solid, reliable, non-variable core.   If they start privatizing it, that reliability goes out the window.   Even very-conservative investments like a 401-K can tank on you.  I changed jobs a couple years ago and lost over $1000 on my 401-K  (and had to haggle with the company for over a year before they'd get up off it).   Stuff's shaky.   You can think that's "naive" if you want, but you're not gonna talk me out of something I've learned from personal experience...

Cheers,

Zwolf
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#46 MuseZack

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Posted 14 February 2005 - 11:56 AM

Zwolf666, on Feb 14 2005, 04:31 PM, said:

Quote

That's a fundamental imbalance of cash flow outward to cash flow inward, and there's no way around that fact.

****** You may have a point there, and I'm far from a financial expert - that's why I hired one to handle my investments for me.   So, I could be wrong...  but, they do raise SS rates from time to time, and people's salaries go up, thereby increasing the amount taken as a percentage... so, it's not nearly as big a crisis as you're painting it.  
Cheers,

Zwolf

<{POST_SNAPBACK}>


The whole "imbalance" that begins around 2018 or so was actually built into the system during the 1983 Social Security reforms implemented by Reagan and the Congress to deal with the retirement of the baby boomers.  It upped payroll withholdings so that the system would begin to accumulate a bigger and bigger surplus, which would peak as the baby boomers retired and then get slowly drawn down.  And surprise, surprise!  It's working like a charm.
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#47 Delvo

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Posted 14 February 2005 - 01:24 PM

Zwolf666, on Feb 14 2005, 11:31 AM, said:

People definitely should invest some of their money in stocks, etc. - they shouldn't expect to rely on Social Security completely.

<{POST_SNAPBACK}>

We would if we could, but the money that could go to that is INVOLUNTARILY being taken from us instead.

And notice how people say the "solution" to the problem of SS not having enough money is to take even MORE of productive workers' own money from us, making any other kind of savings decisions on our part even HARDER. Funny how the people can always do just fine with less, but government never can, so taking more money from the people is never a problem or even questionable, but failing to give the government more is an unthinkable, sinful horror.

#48 Rov Judicata

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Posted 14 February 2005 - 01:36 PM

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Nonny: As I like to say to people who make snarky comments about how great it must be to park in disabled parking without risking a fine, do you really think the benefit makes up for the pain and all?

I apologize if I wasn't clear. I was using 'good deal' in a strictly financial sense that "You'll get more back than you paid in". You yourself said:

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I received more money from SSA than I ever contributed

Obviously, the money won't compensate for pain, injury, lost opportunities, etc. However, since no amount of money could, there's really no way to incorporate that into a SS discussion.

The bottom line is that if you are disabled, then it's in your interest to see no changes in social security. In most other cases, social security is a bad deal, in that the money you get back is less than you could have achieved via your own management (even with a conservative CD strategy, as noted above)

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Zack:  Whatever you think of Social Security on ideological grounds, its actual problems are so modest compared to things like the budget deficit and medicare that insisting we fix it RIGHT NOW is the equivalent of deciding that what your car with two flat tires and a smashed windshield really needs at the moment is an oil change, since you haven't done it in 2000 miles.

Bingo.

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Zack:

What a load of crap. Clinton was talking about investing a chunk of the Social Security trust itself into the market, not carving out individual private accounts. That's not even apples and oranges, it's apples and plutonium.

Yeah. Basically, Clinton's plan let the government accept a little bit of risk to make ends meet. Bush's plan shifts the risk from government to individuals. Neither one is a winner though: Bush injects an element of risk (and expense) that's politically unacceptable, and Clinton's plan would give the government too much de facto control of corporations via social security money. Neither one is really all that acceptable.

But, again, this isn't a problem until 2042 or later. I'm content to wait this one out.
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#49 Godeskian

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Posted 14 February 2005 - 01:56 PM

actually Rov, most estimates say 2011-2015 whent he first of the babyboomers retire and are by law (namely ERISA) required to start withdrawing their savings from SoSec will be the first big storm, as at that point, there will be many more people withdrawing their money from SoSec every month than currently. enough to tip the balance.

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Yeah. Basically, Clinton's plan let the government accept a little bit of risk to make ends meet. Bush's plan shifts the risk from government to individuals

The problem with this plan is that it is idiotic to assume that any substantial minority of the tens (if not hundreds) of millions of people who will suddently be forced to be investors have any skill, or talent or training to BE investors.

investing sensibly isn't just a matter of picking a company name out of a hat, or throwing darts at a copy of the wall street journal. It is as demanding a mental profession as any you'd care to name, and any politician who thinks the majority of average people can handle the educational requirement to invest safely (and yes, you can invest safely) hasn't got a clue what he's talking about.

It requires training, it requires skill and it requires a certain willigness to have faith in your own skills and training to do it right. In a world where half the people think that stocks and shares are 'shocks and scares' investments (honest to God, that's what they are advertising it as) forcing people to become investors is stupid.

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#50 HubcapDave

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Posted 14 February 2005 - 02:13 PM

Steven_Q, on Feb 14 2005, 11:56 AM, said:

actually Rov, most estimates say 2011-2015 whent he first of the babyboomers retire and are by law (namely ERISA) required to start withdrawing their savings from SoSec will be the first big storm, as at that point, there will be many more people withdrawing their money from SoSec every month than currently. enough to tip the balance.

Quote

Yeah. Basically, Clinton's plan let the government accept a little bit of risk to make ends meet. Bush's plan shifts the risk from government to individuals

The problem with this plan is that it is idiotic to assume that any substantial minority of the tens (if not hundreds) of millions of people who will suddently be forced to be investors have any skill, or talent or training to BE investors.

investing sensibly isn't just a matter of picking a company name out of a hat, or throwing darts at a copy of the wall street journal. It is as demanding a mental profession as any you'd care to name, and any politician who thinks the majority of average people can handle the educational requirement to invest safely (and yes, you can invest safely) hasn't got a clue what he's talking about.

It requires training, it requires skill and it requires a certain willigness to have faith in your own skills and training to do it right. In a world where half the people think that stocks and shares are 'shocks and scares' investments (honest to God, that's what they are advertising it as) forcing people to become investors is stupid.

<{POST_SNAPBACK}>


The burden placed on the individual wouldn't be any greater than picking out their own retirement plans (which many seem to be quite capable of).

#51 StarDust

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Posted 14 February 2005 - 03:24 PM

Well, here are some links about what Clinton was up to.  It's easy for people to check this stuff out. Obviously if you have access to this place, you can search the internet.  The best places to go are CNN and ABCNews because they were on the internet in the early days and have tons in their archives.  These happen to be a few quick ones from CNN.

Clinton wanted to use the surplus to help shore up SS to make necessary reforms easier. He never intended to only use the surplus. He agreed the system needed to be changed. He thought the surplus should be invested as part of regular SS, but he also supported private accounts. He seemed to be a proponent of a multi-prong approach.

What happened? Welll, first this all occured during his Monica problems and his impeachment trial. That's got to hurt. Second, it takes time and Gore started stumping stating that SS was fine, another stab in the back. Third, it moved slowly because Clinton seemed to be trying to push others to come up with change instead of leading the way, possibly because of the situation he was in and he thought others would be more successful. And then there was the fact that by the end of 1999, we already knew we were headed into a recession, there would be no surplus.  People make less money, government gets less money, but government has to provide more resources to help those not making money. No surplus. Economy 101.

Basically, it's a no brainer.  Without reform, we either increase taxes or decrease benefits. The middle class looses either way.  We are moving to a time when there will only be 2 people working for every 1 person on retirement. Do you want to pay half of someone else's income?  Can you afford it?

And SS is definitely broke.  When some Dems state that the program will survive to the middle of the century, the aren't tell you at a drastically reduced rate.  I found this while researching my 401K.

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5 critical fixes for 401(k) plans

Currently, Social Security replaces 41% of pay for workers who make average incomes over their lifetime, and 56% of pay for low-income workers.

But those replacement rates are scheduled to drop over time. Because of tax laws already in place, Munnell expects that by 2030 replacement rates will fall to 27% and 49% respectively. If and when Congress gets serious about fixing the Social Security mess, the replacement rate may drop even lower.

so basically, the hard-working middle class already doesn't get a whole lot, and we'll end up with a lot less. I'm sorry but checks that are 27% of my working income aren't going to cut it.  That probably won't even pay medical costs.

Here are some links to news articles about Clinton and SS.


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White House looking at surplus to build retirement savings accounts

Supplemental savings accounts would not directly address the predicted bankruptcy of the Social Security system within the next 30 years, a problem created by the impending retirement of the country's huge baby boom generation. Instead, the idea would be to help Americans better prepare for retirement.

Unlike any other current proposals for saving Social Security, the accounts have a degree of bipartisan support. Last year, Senate Finance Committee Chairman William Roth of Delaware and House Budget Committee Chairman John Kasich of Ohio introduced plans to hand back surpluses to American workers in new retirement accounts they could invest for themselves.

...

The idea also could meet with resistance because it would spend the surpluses without doing anything to solve the expected Social Security shortfall.

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Clinton launches yearlong debate on Social Security

March 21, 1998
Web posted at: 8:28 p.m. EDT (2028 GMT)

WASHINGTON (CNN) -- A national dialogue on how to fix the country's ailing Social Security pension system got under way Saturday, as President Clinton made a vigorous push to reform the public pension system.

"By 2029, all the baby boomers will be 65 or over, and most of them will be in the retirement system," said Clinton, adding that if present trends continue, there will be only two people working for every one person drawing benefits from the system. Analysts say funds would run dry quickly under such circumstances.

"We do not need to put this off," he said. "We can solve it with modest, far-sighted actions now that will have a huge impact 20 or 30 years from now."

Clinton made his comments from Washington, via satellite, to more than 1,000 citizens and lawmakers participating in an afternoon town hall meeting in 10 cities. Earlier, Clinton discussed Social Security in his weekly radio broadcast from the Oval Office.

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Clinton favors using stock market to pump up Social Security

December 9, 1998
Web posted at: 8:10 p.m. EST (0110 GMT)

WASHINGTON (CNN) -- President Clinton favors some use of stock market investments to boost returns for the Social Security Trust Fund, according to his top economic adviser, Gene Sperling.

Briefing the press on the second day of the White House Conference on Social Security, Sperling said the president is part of the growing consensus that supports investment as a way to boost the fund, which is projected to run short of cash by 2032, after more than 75 million baby boomers begin collecting benefits.

But whether that investment would be managed by the government or by individuals themselves remains at the heart of the debate over reforming Social Security, Sperling said.

(No date, but sometime in 1999.)

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Questions and answers about Clinton's Social Security plan

SHINGTON (AP) -- Q: How would Clinton shore up Social Security's finances?

A: Clinton wants to add to Social Security's cash reserves about 62 percent of the budget surpluses expected over the next 15 years -- more than $2.7 trillion.

The government would invest about a quarter of that money in the stock market -- a first for Social Security -- in hopes of getting a higher return. The rest would be kept, as the retirement system's reserves have been, in safer but historically lower-yielding Treasury bonds.

Administration officials estimate the cash infusion and higher earnings could push back the date when Social Security would run short of money by more than 20 years, to 2055.

Q: Does that mean there wouldn't be any other changes to Social Security?

A: Not necessarily. Clinton says he still will ask Congress to consider other changes -- with an eye toward keeping the program solvent even longer. A higher retirement age is still a possibility, for example, or limits on the annual cost-of-living raises retirees get, or more payroll taxes on the wealthy. Clinton has not endorsed any of these changes, however.

Q: Is that the president's whole plan?

A: No, Clinton also wants to earmark another 11 percent of the expected surpluses to new 401(k)-style retirement savings accounts for most American workers. The accounts would be separate from Social Security, giving people an additional source of old-age income.

Based on current projections, government contributions to the accounts would total about $500 billion over the next 15 years.

Q: How would the new accounts work? Would everyone get one?

A: The accounts would work much like the 401(k) savings plans many companies offer workers, with a choice of investment options such as stock or bond mutual funds.

The government would give each person an annual lump sum, then additional contributions paralleling the person's own savings -- up to a limit.

A sliding scale would mean bigger subsidies for those with lower incomes and might disqualify the wealthiest, perhaps 5 percent, from the money altogether.

A worker earning $45,000 a year, for example, might get an initial government payment of $100, then a 50 percent government match of his or her own contributions -- up to a maximum of $600. The result would be $1,000 in the worker's account at the end of the year, with $400 of that from the government.

Assuming that worker's account yielded a steady 10 percent return, compounded annually, it would grow to nearly $35,000 after 15 years. But outcomes could vary widely depending on investment choices -- and the stock market's performance.

Clinton's is not the only model proposed for such accounts: A Republican plan would have government deposits to the accounts rise along with a person's income, just like Social Security taxes do.

Q: Would the new accounts mean I'd definitely end up with more retirement income than Social Security promises me now?

A: Maybe, maybe not. Clinton says his plan could maintain full Social Security benefits through 2055, plus pay to create the new accounts. But changes may still be made to Social Security that affect future benefit levels.

So a worker could end up with a smaller Social Security check than promised now. And that difference might or might not be made up by the money in a supplemental account.

Q: Would the government add money to my account each year for the rest of my life?

A: No. Clinton's proposal would earmark money for the accounts only for the next 15 years. After that, Congress would have to evaluate whether to keep up the government contributions. Lawmakers' decision might depend on whether budget surpluses have continued -- or what other priorities face the nation.

Although the latest estimates show surpluses for the next 25 years, such predictions can change quickly, for example, if the country plunges into a recession.

Q: Getting back to Social Security, how would the government choose which companies to invest the program's cash reserves in?

A: Many details have yet to be worked out, but Clinton suggests establishing an independent board -- insulated from political pressures by, perhaps, long terms in office -- to choose the investments. The board's options would also be limited to relatively neutral investments, such as stock index funds.

Quote

Clinton To Push For Social Security Fix

WASHINGTON (AllPolitics, Jan. 4) -- Saving Social Security may become the focal point of President Bill Clinton's domestic agenda for 1998.

Administration officials tell CNN the president may include in his State of the Union address, scheduled for later this month, a call for Congress to deal with Social Security reform by 1999.

The address may also include some of Clinton's own ideas on how to keep Social Security from going bankrupt within the next 30 years, according to the Washington Post. Until now, Clinton has avoided revealing his ideas on Social Security reform because he wanted the solutions to arise from the bipartisan process.

Sources tell CNN the president has all but ruled out calling for a bipartisan commission to deal with the issue. One source said Clinton doesn't believe a commission is necessary because the problems Social Security will face in the next 20 to 30 years are well known.

Clinton officials also suggest that even if a commission were appointed, in the end compromises would be worked out in talks between Clinton and congressional leaders, according to the Washington Post. That scenario, officials told the Post, leads some aides to suggest that reform talks should just begin at that stage.

Gore, when running for president bucked everyone at the time stating there was no need for reform.  I guess he was in a different universe. His stance undoubtably helped to bury everything Clinton was trying to accomplish.
May 9, 2000
latimes.com: Two seniors programs show how Bush and Gore differ


Quote

Social Security advisory panel disagrees on everything
December 8, 1996
Web posted at: 9:40 p.m. EST

WASHINGTON (AP) -- For 2 1/2 years, members of a federal advisory panel on Social Security argued, disagreed and argued again. Still without consensus, the group presents this month three opposing plans to save the doomed system.

Some panel members said Sunday that's what they were supposed to do. Others disagree.

"We were charged with coming up with general approaches," said panel member Sylvester Schieber, who supports a plan to restructure the program to rely on individual investment accounts.

"Now the report goes to Congress and the administration, and they'll decide what to do."

Member Gerald M. Shea demurred. He said the report offers "non-recommendations" because the proposals differ so widely.

"I think it -- absolutely -- was a total failure," said Shea, assistant to the president of the AFL-CIO.


#52 Spectacles

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Posted 14 February 2005 - 03:35 PM

Social security, as Zack pointed out, was restructured back in 1983 so as to build a surplus and trust fund, from which the baby boomer crisis could be weathered.

But that trust fund has been raided to pay for everything else so it's empty:

http://www.forbes.co...828topnews.html
"Facts are stupid things." -Ronald Reagan at the 1988 Republican National Convention, attempting to quote John Adams, who said, "Facts are stubborn things"

"Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing." -- Paul Krugman

#53 Spectacles

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Posted 14 February 2005 - 03:39 PM

Considering that the ss trust fund has been used by government as a general fund, it sure hasn't helped matters that we've been running huge deficits for the past three years. And, contrary to the usual "but it was 9/11's fault," we began to dip into red ink in August 2001, right after the first round of tax cuts.
"Facts are stupid things." -Ronald Reagan at the 1988 Republican National Convention, attempting to quote John Adams, who said, "Facts are stubborn things"

"Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing." -- Paul Krugman

#54 MuseZack

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Posted 14 February 2005 - 03:44 PM

Spectacles, on Feb 14 2005, 08:35 PM, said:

Social security, as Zack pointed out, was restructured back in 1983 so as to build a surplus and trust fund, from which the baby boomer crisis could be weathered.

But that trust fund has been raided to pay for everything else so it's empty:

http://www.forbes.co...828topnews.html

<{POST_SNAPBACK}>


Remember how everyone made fun of Al Gore back in the 2000 debates for droning on about putting the Social Security trust in a "lockbox"?  Maybe the guy knew what he was talking about after all.  Naaahhhh.  Next thing you know, people will reveal that he never actually claimed to have invented the Internet.  Or that the main character in "Love Story" really was based on him.  Or...
"Some day, after we have mastered the wind, the waves, the tides, and gravity,
We shall harness for God the energies of Love.
Then, for the second time in the history of the world,
we will have discovered fire."
--Father Pierre Teilhard de Chardin

#55 Rov Judicata

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Posted 14 February 2005 - 05:01 PM

Quote

actually Rov, most estimates say 2011-2015 whent he first of the babyboomers retire and are by law (namely ERISA) required to start withdrawing their savings from SoSec will be the first big storm, as at that point, there will be many more people withdrawing their money from SoSec every month than currently. enough to tip the balance.

There are basically two ways to look at social security funding:
-- It should be funded solely by payroll taxes, and payroll taxes are its dedicated funding source.
-- Social security is just another government program, and payroll tax is just another tax.

If it's the latter, then this whole talk about crisis is meaningless, since social security is then under no obligation to be balanced; if payroll isn't Social Security's dedicated funding source, then it's immaterial whether Social Security is drawing out more than payroll is bring in. As such, that position makes social security crisis talk gibberish.

Conversely, if it's the former, then Social Security has enough money until 2042 or later. It's up to congress to appropriate funds to pay it back.

The notion that the crisis begins in 2012 depends on the truly curious assumption that Social Security/payroll are part of the general fund when the payroll is bringing in more than SS is paying, but separate entities from the main budget when the payroll is bringing in less than SS is paying That's just nonsense. Therefore, either way, 2012 is an irrelevant date. The *real* problem is the government's main budget deficit. Let's do something on that.

Edited by Hotspur Rovinski, 14 February 2005 - 05:02 PM.

St. Louis must be destroyed!

Me: "I have a job and five credit cards and am looking into signing a two year lease.  THAT MAKES ME OLD."
Josh: "I don't have a job, I have ONE credit card, I'm stuck in a lease and I'm 28! My mom's basement IS ONE BAD DECISION AWAY!"
~~ Josh, winning the argument.

"Congress . . . shall include every idiot, lunatic, insane person, and person non compos mentis[.]" ~1 U.S.C. § 1, selectively quoted for accuracy.

#56 Godeskian

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Posted 14 February 2005 - 05:09 PM

HubcapDave, on Feb 14 2005, 08:13 PM, said:

The burden placed on the individual wouldn't be any greater than picking out their own retirement plans (which many seem to be quite capable of).

Tell that to the tens of thousands who saw their retirement funds massacred by the IT bubble bursting.

Tell that to the thousands who invested unwisely in certainproperty brokerage firms in the UK in the late 80's.

Tell that to the millions today who think 'diversify' is a good investment strategy.

Statistically, the majority of people who invest themselves without education in the field fail. No sugarcoating changes that.

Still i'm content to be here in 2012 and post the biggest I Told You So you've ever seen.

Defy Gravity!


The Doctor: The universe is big. It's vast and complicated and ridiculous and sometimes, very rarely, impossible things just happen and we call them miracles... and that's a theory. Nine hundred years and I've never seen one yet, but this will do me.


#57 HubcapDave

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Posted 14 February 2005 - 05:24 PM

Steven_Q, on Feb 14 2005, 03:09 PM, said:

HubcapDave, on Feb 14 2005, 08:13 PM, said:

The burden placed on the individual wouldn't be any greater than picking out their own retirement plans (which many seem to be quite capable of).

Tell that to the tens of thousands who saw their retirement funds massacred by the IT bubble bursting.

Tell that to the thousands who invested unwisely in certainproperty brokerage firms in the UK in the late 80's.

Tell that to the millions today who think 'diversify' is a good investment strategy.

Statistically, the majority of people who invest themselves without education in the field fail. No sugarcoating changes that.

Still i'm content to be here in 2012 and post the biggest I Told You So you've ever seen.

<{POST_SNAPBACK}>


Considering that most people (that I know, at least) don't buy and sell stocks directly, but work through investment brokers.

Secondly, I take the dot com bust as an anomaly, not as an indication of the general trend of the market. People were so willing to throw out the old rules and proclaim the "new economy" that they forgot you still gotta make a buck to survive in business. Besides, when you invest for your retirement, you do so with a long term view, not a short term. If people were investing their retirement money in day trading, then they were foolish for doing so. But that does not mean we need the government to save us from ourselves, that is not it's function.

#58 Nonprofit

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Posted 16 February 2005 - 11:15 AM

"Looming fiscal crisis in Social Security. If nothing is done by 2029, there will be a deficit in Social Security trust fund which will either require a huge tax increase in the payroll tax or just about a 25% cut in Social Security benefits."
-- William Jefferson Clinton 1998

You know, either there wasn't a crisis then and there isn't a crisis now or there was a crisis then and there is a crisis now. Either way you look at it, it's the Democrats that don't want to deal with it.

The Democrats are so married and so hard wired to their past, they have ignored the future.  The only thing they can grasp onto for comfort is old programs and whoever it was that authored them, in this case Social Security and FDR.

http://www.nationalr...00501140807.asp

Quote

“Save Social Security First”?
Just a few years ago, Democrats talked about a crisis they now deny exists.

The latest line of attack against President Bush's still-unformed plan to reform the Social Security system is the charge that the White House is manufacturing a phony Social Security "crisis" to sell its proposal. "The fabricated crisis is the hallmark of the Bush presidency," Washington Post columnist Harold Meyerson wrote this week. "To attain goals that he had set for himself before he took office — the overthrow of Saddam Hussein, the privatization of Social Security — he concocted crises where there were none." A number of other commentators, and also some news reporters, have joined in the same theme in recent weeks.

A key document in the controversy, a strategy memo written in early January by White House aide Peter Wehner — a top assistant to political chief Karl Rove — does not use the word "crisis," but it does say clearly that Social Security is headed for trouble. "Our strategy will probably include speeches early this month to establish an important premise: the current system is heading for an iceberg," Wehner writes. "We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable course. That reality needs to be seared into the public consciousness; it is the pre-condition to authentic reform."

To some commentators, Wehner's analysis suggested that the White House planned to stir up a phony "crisis." But in fact it appears that President Bush is not only relying on accepted economic wisdom about Social Security's future financial viability but also, in his campaign for reform, borrowing a page from the public-relations playbook of his predecessor, Bill Clinton.

In 1998, the major policy question in Washington was what to do with enormous anticipated federal budget surpluses. Republicans, arguing that a surplus meant the government was taking in too much money, wanted to cut taxes. Clinton wanted to kill any tax-cut proposal before it had a chance to gather support. So in his 1998 State of the Union speech, he came up with a famous slogan.

"What should we do with this projected surplus?" Clinton said. "I have a simple four-word answer: Save Social Security first."

Soon Clinton was going around the country, touting a coming Social Security "crisis." All of his administration's economic achievements, he said in February 1998, "are threatened by the looming fiscal crisis in Social Security." There should be no new spending — or, more importantly, no tax cuts — "before we take care of the crisis in Social Security that is looming when the baby boomers retire."

A number of Clinton's arguments back then sound uncannily like Bush's today, if one makes a few adjustments for newly revised figures on Social Security's finances. "We have a great opportunity now to take action now to avert a crisis in the Social Security system," Clinton said, again in February 1998. "By 2030, there will be twice as many elderly as there are today, with only two people working for every person drawing Social Security. After 2032, contributions from payroll taxes will only cover 75 cents on the dollar of current benefits. So we must act, and act now, to save Social Security."

Clinton's Social Security-crisis campaign, while a response to Republican plans for the surplus, was also a way for him to go on the political offensive during the Monica Lewinsky scandal. As the scandal grew, he became more interested in fighting off impeachment than forestalling tax cuts. But Social Security remained a potent rhetorical weapon. In September, Vice President Al Gore went to the Capitol for a Social Security pep rally with congressional Democrats, including House Minority Leader Richard Gephardt, Sen. Edward Kennedy, Sen. Barbara Boxer, and others. Gore said that in coming years — by 2032 — "Social Security faces a serious fiscal crisis." Everyone in the group stayed remarkably on-message as they warned that the future was dire.

"Save Social Security first," said Gore.

"Save Social Security first," said Gephardt.

"Save Social Security first," said Kennedy.

"Save Social Security first," said Boxer.

Today, some of those same lawmakers are leading the opposition to President Bush's initiative and no longer fear a crisis in Social Security. And indeed, by 1999, after GOP tax-cut proposals had been defeated and he escaped conviction in his Senate impeachment trial, Social Security's future became a less urgent issue to Clinton. In his 957-page autobiography, My Life, Clinton included no extended discussion of Social Security at all.

Back in 1998, Democrats realized it was politically safe to rally around Clinton's statements about a Social Security crisis because they knew he did not really intend to take any action that matched his rhetoric. They also knew that Clinton's words were correct; Social Security was then, as it is now, facing a "looming fiscal crisis." He just didn't plan to do much about it.

Now, things are different. George W. Bush, by all accounts, intends to take substantial action. And as he prepares the way for that action, he has decided to use elements of the old Clinton campaign to make his case. Last week, under questioning by reporters, White House spokesman Scott McClellan read an extended passage from Clinton's February 1998 "looming fiscal crisis" statement without first revealing the source of the quote. That wasn't President Bush, McClellan then explained. "That was February 9, 1998, in remarks given by President Clinton. This has been a problem that has been looming for quite some time."

I believe its time to be given a choice for our children, our grandchildren and for ourselves.  

~Red

#59 Kosh

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Posted 16 February 2005 - 12:11 PM

Hotspur Rovinski, on Feb 13 2005, 10:17 AM, said:

Social security is a scam. It's really not seemly to force everybody to fork over 10% of their paycheck (including employer contribution) to subsidize the government with a low-interest loan. [b]The fact that it's been portrayed as something beneficial to the average person is one of the greatest marketing triumphs of our time. However, it's too deeply entrenched to easily get rid of at this point [and we couldn't afford the transititional costs at this point anyway, so eliminating it would be irresponsible.].

That being said, privatization does absolutely nothing to solve the problem; it just increases the debt while accomplishing very little. Very modest fixes-- raising the payroll tax cap when the time comes (or even right now), increasing income taxes and diverting the new money, etc.-- will solve the problem.

Okay, so Social Security will be in debt starting in 2042. Maybe. Fine. The government is paying out more than it takes in every year *right now* via the general fund. Shouldn't we be focusing on that?

<{POST_SNAPBACK}>





Speaking for all the folks I know who have drawn SS. P~~~~~~~~~
Can't Touch This!!

#60 Rhea

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Posted 16 February 2005 - 04:48 PM

Hotspur Rovinski, on Feb 13 2005, 06:17 AM, said:

Social security is a scam. It's really not seemly to force everybody to fork over 10% of their paycheck (including employer contribution) to subsidize the government with a low-interest loan. The fact that it's been portrayed as something beneficial to the average person is one of the greatest marketing triumphs of our time. However, it's too deeply entrenched to easily get rid of at this point [and we couldn't afford the transititional costs at this point anyway, so eliminating it would be irresponsible.].

That being said, privatization does absolutely nothing to solve the problem; it just increases the debt while accomplishing very little. Very modest fixes-- raising the payroll tax cap when the time comes (or even right now), increasing income taxes and diverting the new money, etc.-- will solve the problem.

Okay, so Social Security will be in debt starting in 2042. Maybe. Fine. The government is paying out more than it takes in every year *right now* via the general fund. Shouldn't we be focusing on that?

<{POST_SNAPBACK}>


You must never have known any of the millions of seniors who can't survive without it or you wouldn't be making that statement. Many people, for whatever reason, don't have adequate retirement plans (my mother is a good example - she worked hard all her life but never in one place for very long, as my father was in the Navy - take that couple with the fact my father drank every dime that ever got into his greedy little fingers and you have a mom with a very small IRA who needs Social Security to put food in her mouth).

Perhaps the baby boomers will be the first generation to pay into Social Security who won't need it. I seriously doubt this, though, as I see too many people around me using their Social Security to live on and too many of my peers who don't have adequate retirement.

I agree with Zack that it's not the crisis it's made out to be. But to say that Social Security is useless or a scam is to simply not look around you at the elderly.

Edite to add: what Kosh said. :p :p :p

Edited by Rhea, 16 February 2005 - 04:49 PM.

The future is better than the past. Despite the crepehangers, romanticists, and anti-intellectuals, the world steadily grows better because the human mind, applying itself to environment, makes it better. With hands...with tools...with horse sense and science and engineering.
- Robert A. Heinlein

When I don’t understand, I have an unbearable itch to know why. - RAH


Everything is theoretically impossible, until it is done. One could write a history of science in reverse by assembling the solemn pronouncements of highest authority about what could not be done and could never happen.  - RAH



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