I wonder why this is not on the list of forum issues, hopefully it will be now.
I do not know if most people know it or not but social security is broke now and has been quite some time. The government has been borrowing from it to fund all of its numerous wasteful spending.
How we should reform Social Security, some thoughts.
Number 1 it should not be privatized period. It is too risky and it should not be gambled in the stock market.
Number 2. the money should be put into a lock box and the government should not be able to borrow from it starting immediately.
Number 3. the cap on which people stop paying into the system should be abolished, a person should pay 7.5% irregardless of whether they make l0,000 a year or l0 million. Employers should have to pay their share irregardless of what they pay non-management and management.
Number 4. Early retirement and 80% benefits at age 65.
Number 5. Full retirement and benefits at age 70.
The government through the Department of Education needs to start a program which would encourage all post secondary schools to require one course on retirement planning. Focusing on the need for young people to realize social security will provide about a third of a persons retirment budget. They should be ecouraged to save through IRA's 40lk's etc to make up the other two thirds of what they will need to retire.
MFVboomer I take it this is not a burning issue. Well you can't catch a fish unless you put the bait on the hook. Silence speaks volumes.
Going to be a great deal of pain to get Baby Boomers a check.
Less Benefits and more tax. After we vote a reform package we take SS off the federal budget and make it a public pension for people starting at age of zero to 16.
If you combined employer, employee SS, Medicare, you have a tax rate of 15.30% If you made $25,000 for 49 years the total tax per year is $3825.00 times 5.75% return from bonds only, NO Stocks,each person would have $1million.Power of compounding real money, over long periods of time will make you rich.
The hard part is what gerneration is in the pension and how do we pay for it.First must have balanced budget amendment to the constitution.
Congress will never cut spending, only way to get your house in order.
We move goverment assets to SS Pension Fund.Ft Knox has 147 million oz's of gold, eqaul number in Federal Reserve Bank, US Treasury, US Mints.$650 oz equals over $200 billion. Make TVA, US Post Office, public compaines, funds and stock goes to SS fund.
This will also make the value of the dollar better as our national savings rate goes up.
Ronald R. Tindall
Jeff, I think you left out one or two other ways to fix SS I feel all we would have to do is take away the 100% pensions and benefit packages of all the congressmen,senators,and all the other Government Bigwigs (supposedly our servants) and force them to live on SS and medi-care and I would hazard a guess the problem would be solved " miraculously" in one term..Their pensions and benefits are probably 10 times more than most Americans!!!Another way is to sic the SEC on all those Corp. CEOs' multi-million dollar bonuses and stock options and force them to put a percentage in their companies Employees retirement funds instead of taking it out so we wouldn't have to depend on SS as much...I guess I'm kind of anti-establishment.. But hey we can all dream----
Pragmatically, dealing with entitlement programs, particularly Medicare and Social Security, is really the most important long-term issue facing the American people and the federal government, particularly in light of the criminally massive underfunding of private pension programs. Your suggestions on SS, Boomer, are exactly in line with my sentiments, with one missing component...
I think the discussion needs to be had regarding means testing - that is reducing/eliminating payments to those who are fortunate enough to accumulate a solid retirement outside of Social Security. It would be an acturarial and accounting challenge to come up with a formula which doesn't penalize those who are succesful, and I understand the main argument - namely that if we deny benefits to some they will be less inclined to participate. The upside is that if we reduce the amount needed for projected payouts by doing some limitation on benefits, the lifetime witholdings would be commensurately reduced on all and the savings among those savvy enough to invest widely could be privately invested to priooduce an even greater accumulation of wealth and a higher standard of living in retirement.
I'm no an actuary and am nowhere near sharp enough to run the math on this concept - just feel intuitively it is something that should at least be considered.
Keep up the good work and keep this conversation going!
Mark Greene
Texas Democrat in the Middle
You are SO correct on the means-testing of all entitlements esp SS and Medicare and other items. The argument for means testing entitlements must somehow be reframed and properly portrayed as a method to bridge the demographic black hole that will occur when Baby Boomers start to retire en masse after 2024. I really believe we need to support implementation of a reverse progressivity of all entitlement payouts. This could be done maybe along the lines of the those suggested by the Concord Coalition and the Kerrey/Danforth Entitlement Commission in the 1990’s (CPI minus one, increase in retirement age and income levels subjected to FICA, comprehensive entitlement affluence test starting above $50, 000, limit on home mortgage deductions for second homes and above a million dollars, reduced subsidies to big farms, reigning in Corporate welfare, etc. For example in Social security the wealthier (live to actuarial longer age BTW) would in most means-test schemes still get back what they paid into SS plus interest plus as the rest but SS/Medicare payments to them would be stretched out a bit more than the one’s who were not as wealthy and fortunate. Actuarially they could handle it.
It is the obligation of all involved in the upcoming entitlement and related budgetary debates to honestly educate themselves on the long-term demographic actuarial entitlement realities impinging on the medium and long term fiscal health of the nation. The great Entitlement War of the 21st century is about to begin because of our continued head in the sand attitude and gimmickry (keeping it off budget, raiding the trust funds, etc) on this “Third Rail” item. America’s savings and investment seed corn is funneling increasingly down the black hole of Entitlement Spending. America has never been so psychologically and institutionally unprepared to overcome the demographic hard truths that under gird this coming Entitlement War. Put this issue off any longer and we risk Intergenerational Strife that could be a nation-buster. The stakes are high on this issue because failure to address successfully is likely to mean uncontrollable budget deficits, sky high interest rates, and ultimately a nation in receivership. This Entitlement issue is going to be a REAL tough nut to crack given the PAC/Lobbyist/K Street forces (representing many of us BTW) locked and loaded to shoot such solutions down. We should have NO illusions. But it must be addressed and quick. The legitimacy of the U.S. Government will definitely be on the line.
(1) The FairTax would greatly expand the support base for SocSec and Medicare. So, adding the FairTax to the platform would deal with the current broke(n) system.
(2) Being someone closer to retirement and having done a great deal of saving along the way, I went to a retirement planning session at my credit union. What I found out was that I can't retire anytime soon without including SocSec income. I have paid in a lot over the years and am strongly against being punished (yes, that's what you are suggesting) because I saved for retirement.
I do not really know for sure what the fair tax proposal consists of, is it the same thing as the flat tax advocated by Forbes a few years back? If not would you explain it briefly. Thank You
A Sooner Independent
The Fair Tax is a way to move more of our tax burden from the wealthy to the middle class. It eliminates the top tax bracket because millionaires are tired of paying taxes.
To save Social Security, the only suggestion necessary from the ones listed above is #3. Social Security is in decent shape now, despite what Bush says, and eliminating the cap would solve what little problem it has until eternity.
The "Fair Tax" is in fact Forbes' flat tax. It reduces taxes on the wealthy, eliminates taxes on corporations, capital gains and dividends, does nothing to shore up Social Security or Medicare or reduce the debt. It is just like the GOP program that curbed controls on pollution and logging that they dubbed the Clear Skies Initiative. They're not worth a damn at governing, but are second to none in manipulating the English language and misleading the gullible American electorate.
Mark Greene
Texas Democrat in the Middle
Might I suggest a book? Neal Boortz's "The FairTax Book".
I really like this guy although many of you probably don't. :) I love his candor and views on most things. He is an advocate for an alternative to the current tax system. Sounds like an endorsement, I know... but I was really just trying to recommend a good book! :)
-Keely
would probably be the best solution, IMHO.
http://journals.aol.com/kweinschen/Veritas/
I'd lay out a combo of all 5 suggestions, plus a comprehensive means test of all entitlements Government pays out. Social security as well as all Entitlements (Medicare, Medicaid, Corporate welfare, etc) were suppose to be a saftey net for those who were in less fortante circumstances. Somehow in the last 60 years an Entitlement Mentality has crept in and taken hold in a way that has the prospect of intergenerationally short-changing big time those who are just coming into the work force and their kids/grandkids.
We need to replace the extant entitlement mentality with a hopeful positive endowment mentality that gives the next 2 or 3 generations a stake in the future. That is the formula for bipartisan success by Unity 08. Do nothing effective on this Entitlement thing and kick the can down the road and we risk going down the tubes as a nation withing a few decades. It'sa nation-buster that should be top Unity 08 priority!!
I agree with the first three points, disagree with the last 2.
I don't like it as I plan for retirement that I have to chase a moving target. The first three should fix the insolvency, if it doesn't, raise the contribution amounts.
Most everbody knows that Washington politicians (Senate/House) do not pay into SS, but have their own retirement entitlements, some to the tune of $100,000's and more annually. I am not the first to suggest that Washington politicians retirement be tied to SS just as the average citizen's is and eliminate their golden parachutes. This should also be a top Unity08 avtion, yes?
Hi all.
Just to let any one know. If you have a retirement account that gives you a BIG return or if you are wealthy. A million+ You do not get Social Security when you reach retirement age. Even if you paid into it, you can not collect it. If you were born rich, you don't pay into Social Security either. Most all of congress and the senate, fall under that. BORN INTO MONEY Most of them, have no idea, what it's like to work for a living by getting your hands dirty. FYI.
My site covers in detail, what my plans are for Social Security reform. Thanks
Tee
WWW.Tee4President.US
"Lets take care of "U.S." first"
U.S. = United States
The lockbox idea will never fly, since surplus revenues must be invested in federal securities, which allows the government to spend them. In essence, this means that payroll taxes are funding government in lieu of progressive income taxes, although the Earned Income Tax Credit is designed so that poor people get their FICA contributions back by getting the credit.
That part of the system is not really broken, because of the EITC. Of course, the original desire for private accounts was so that the surplus funds in the system would be saved by individuals and could be invested in stocks. Ron Brown came up with this when he was DNC chair campaigning for Clinton.
This is an essential issue. I agree with lifting or eliminating the cap, but I would add a few features:
Credit each full time worker with the same employer contribution, regardless of salary level. Lifting the wage cap allows for a higher average level, by the way. Allow a portion of the employer contribution to be invested in the voting stock of the employer, if the employer is a public or private corporation. Restore the federal pension system to get the public employee unions out of this debate, since they will only obstruct it in the interest of their members. Throw them a bone and they will not. Also, allow unions to invest and vote the stock of their employees rather than the government, unless the workers vote it themselves. Allow the employee to decide whether the union will vote his stock for him (or her). As for the employee contribution, set up a portion of that in a diversified private account tied to income level. Require that administrative expenses be paid by the employer rather than out of plan earnings. Allow unionized workers and workers in employee sponsored 401(k)s to use these accounts rather than a government account. Require that firms who use these vehicles maintain at least the level of contribution on their own prior to the enactment of the legislation (a five year average) so no one stops contributing because of the new law.
Of course, the real solution to Social Security is more kids. Enact a larger child tax credit ($500/month per child or dependent spouse) to be included in the paycheck rather than at the end of the year in addition to the base minimum wage of $10/hr (so that no one pays their employees just the tax credit). Also, don't let parents pay anything for college. This will remove the fear about having enough kids to make the aging crisis go away.
Keep in mind that boomers have not had the advantage of IRAs, 401K, and such for thier entire working life. Those born in the 30s and 40s have litte or nothing from IRA types. Those born in the 70s and later should have accrued a fair sum for later in life.
boomers will not be affected by any social security shortfalls. They will on average get back 5 times what they paid into it not even considering interest and inflation. So do not cry about the IRA, 401K thingy for the Boomers - they will do just fine.
The ones that will experience the REAL shotfall are those who are entering the work force right now and who were born after 1989 - they are guaranteed not to get back what they pay into Soc security. We the boomers will be just fine, but our grandkids will have to live with the harsh lesson of our irresponsible profligacy as they have to make up the gap. For details on this See:
http://www.facingup.org
and
http://www.concordcoalition.org
DC - 3rd ward - milligansstew08@yahoo.com
http://milligansstew.blogspot.com
Thank you for the links and the info. I have two children born in the mid 60's. There's lots to consider.
Technically, it has been illegal to take from Social Security since 1990, but that hasn't stopped anyone.
There are a few changes that can be made to at least increase the longevity of the Social Security program.
1) At the time SS was enacted the average lifespan was only 65 years, so to follow the same principle we could move eligibility to 72 or so. Not likely to happen soon.
2) If we are going to let Bush's tax breaks expire anyway, why don't we just plan to balance the budget with what we have now and place all of the additional revenue into the Social Security Trust Fund?
3) Remove the income cap or at least increase it from where it stands today at $97,500.
4) Increase capital gains taxes for high income individuals. There was an article in Time recently where Warren Buffett, the second wealthiest person in the world, stated that he pays a significantly lower
tax rate than does his secretary because his income is in capital gains which are only taxed at 15%.
You didn't ask me if I want to let Bush's tax cuts expire.
Well the Bush tax cuts were designed to expire in 2024, so they would require congressional and presidential approval to be continued. Since there is a Democratically controlled congress and it seems there will be a Democratic president it would be nearly impossible to get them reapproved.
The future is uncertain.
If you are here, you should be here to win the White House. This is not an issues blog, this is a platform blog for an effort to win the White House.
If you aren't here for that reason, the blogosphere is a big place.
This is an Agenda/Platform blog. Unity08 doesn't intend to have a political platform, only agenda questions to pose to its candidates.
ex animo
davidfarrar
It could use some tweaking. You will need to create an organization like the Post Office or the Fed to run it. Something that has congressional oversite, but keeps congresses hands out of the till.
Also, congress should make some restitution for the money they have taken out over the years.
I believe that the way S.S. gets raided is that congress approves a budget and of course they always know that their budget goes over. In order to reduce the amount we have to borrow to fund the deficit, the Treasury Department takes from the Social Security fund, which is by law off-budget (in that respect it is similar to the Post Office) and supposedly can't be touched, and replaces the revenue with "special issues of the Treasury", which are not marketable bonds, they are essentially government IOUs that say this department owes money to that department. So I don't think that the congress really has anything to do with the raiding themselves, but they do need to provide oversight to make sure the fund isn't tapped. They already passed the law saying it can't be tapped they just have to start enforcing it now.
It was a good plan back in the thirties but like all things, corrupt politician touch, it will get corrupted. Despite the naysayers and Bush haters out there. his plan for individual retirement plans was the most financially responsible plan to fix SS. Take the payroll taxes everyone pays and invest it in the stock market in an asset allocated account, each person in America would be able to retire a millionaire. The Fed retirement system was changed about twenty years ago to a similar investment plan. It consists mainly of 5 index funds. The standard portfolio divided into these five funds equally, averaged 10% over the last ten years. The social security system averaged less than 2%. Inflation rate is 3.5%. In theory the Social security system lost 1.5%. This would not only provide a pension plan for every American it would eliminate lockboxes( they don't work), corrupt officials using our money for some pet pork project and give everyone an opportunity for a long and fruitful life. As in all things political the loudest political spinner get the press and America gets screwed. Open a Roth IRA that is the only thing out there that the politicians ever got close to doing right. Then you may have a nestegg for retirement.
I'm a veteran of WWII and the Korean War. Obviously, my social security benefits are not in danger, but my children's, grandchildren's, and great-grandchildren's are. My suggestion is like so many others - put the funds in a lockbox and don't allow it to be touched by anyone for any reason. We can't keep taking out and expect it to fund the retirees of the future. I know many people think that because they are doing well in the early years of their careers, they will still be doing well (or better) at the time of their retirement. Unfortunately, unpleasant circumstances occur during the course of one's career, and income is never guaranteed. We must do something to insure the integrity of social security for future generations.
Raise Retirement Age
Privitize Medicare
*Privitize Social Security.-Partial Privitization, if I can find a better deal than the Government, then I should be able to sign up with them, and be willing to pay the consquences if I have to.