The President said,
We also have a responsibility to improve Social Security by directing extra help to those most in need and by making it a better deal for younger workers. ...
First, millions of Americans depend on Social Security checks as a primary source of retirement income, so we must keep this promise to future retirees as well. As a matter of fairness, I propose that future generations receive benefits equal to or greater than the benefits today's seniors get.
So, out of "fairness" Social Security benefits will increase in absolute dollars, even as they decrease as adjusted for inflation?
Secondly, I believe a reformed system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off.Does this mean a future in which benefits for low-income workers will eventually exceed benefits for middle- and high-income workers? Or is this a proposal for flattening Social Security into a single amount paid regardless of income? If it is the former, it's a phase-out. Once you reach a certain tipping point, the working masses will object to paying a special tax for a program that no longer benefits them.
I have repeatedly said that I don't have a problem with transforming Social Security into a needs-based system, provided it is maintained at a sufficient level to actually keep retirees out of poverty. (GW's own father probably collects Social Security, as he tools around Nantucket by the family's multi-million dollar estate in his Cigarette boat - he doesn't need it, and he wouldn't miss it.) However, if you do that, you should also be willing to shift the "social welfare" component of the Social Security system to the general fund. Also, any such transformation should not simply be a pretext to undercut popular support for the system, such that it can be eliminated at a later date - but that should follow from my prior statement about preventing poverty.
Third, any reform of Social Security must replace the empty promises being made to younger workers with real assets, real money.Whatever I am to make of Bush's insistence that he is a liar, out to defraud the working masses, treasury notes are "real assets".
I believe the best way to achieve this goal is to give younger workers the option - the opportunity - if they so choose, of putting a portion of their payroll taxes into a voluntary personal retirement account.Younger workers can already put money into IRA's, or similar retirement investment vehicles. Heck - they can even invest in treasury notes, despite Bush's insistence that those notes are fake assets, fake money.
Because this money is saved and invested, younger workers would have the opportunity to receive a higher rate of return on their money than the current Social Security system can provide.... And, of course, to receive a lower rate of return.
Whoah - and check this out:
I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of treasury bonds, which are backed by the full faith and credit of the United States government.So the Social Security Trust Fund is a fiction, becasuse it is composed of treasury notes which aren't real assets or real money - and "there is no trust". So why would the same investment vehicle be "backed by the full faith and credit of the United States government" when in a "private account" as opposed to the Social Security trust fund?
Options like this will make voluntary personal retirement accounts a safer investment that will allow an American to build a nest egg that he or she can pass on to whomever he or she chooses.Every time the Bush Administration has been pressed for specifics on private accounts, they have suggested that, upon retirement, people will be forced to purchase annuities with the balance in their accounts. There is absolutely no indication that these annuities will be payable to an heir in the event that they are not wholly depleted before a retiree dies. It is long past time when Bush provided absolute specifics about his plan, such that his promises that the accounts may be left to one's heirs are not being repeatedly and consistently contradicted by everybody else in the Administration.