It's a biggie, too.


hot potato?

Becasue Bush can't find a way to spin it in a positve light, and Kerry can't find a way to blame it on Bush.

The American public is enraptured with the great smoke and mirror show going on...

Ken

If given the choice between MediCare OR Social Security upon retirement, which would you choose? Cuz I see that as a real possibility down the road.

Just convert social security "entitlement" into a cash-balance format and voila, problem solved.

Could you imagine if either one of them touched on this issue, they'd lose the election. Even the democrats, who love having less money in their pocket via higher taxes, would go ballistic if their retirement fund was cut.

Derick

We shouldn't have to choose. We paid for it all our lives. I want ALL the money I put into it plus interest.

Derick

I'm not expecting either to be around when I retire. Certainly not in a form recognizable by today's standards.

And as long as republicans are running the show, each and every one of us had better be socking away as much as we can on our own to afford retirement. After all, we know that government handout programs like Social Security and Medicare are liberal socialist institutions.

I just heard a story about this on NPR -- the story examined how Bush has done on his four big campaign promises from his 2000 nomination speech. The four promises were education, tax cuts, health care reform, and Social Security reform, IIRC.

An argument can be made that Bush addressed the first three. (Opinions differ on the implementation of Bush's ideas, obviously). But he has done anything on Social Security. All he has done is establish a commission to study the issue and then retreat from the issue, partly because his proposal was to privatize Social Security was less palatable once the stock market tanked.

So yes, it's an open issue, Plays.

Cindy -- whose working assumption is that those statements she receives in the mail telling her what SSN benefit she'll receive are a cruel hoax

""If we delay, the adjustments could be abrupt and painful." Get ready for abrupt and painful. Suggesting significant decreases in Social Security and Medicare coverage now would be political suicide for either candidate. Later, maybe Medicare can be folded into a national health plan similar to the UK where everyone has access to really low quality rationed health care, and SSI can become a needs based supplemental payment to people who fall within a certain percentage of the poverty line. People under 40 (or maybe even 50) should plan to get by without Social Security and plan to be able to pay cash for needed medical care in retirement.

How many billions will it cost to save Social Security? Will 80 billion do it? If we can afford to give it to Iraq surely we can afford to give it to ourselves.

Derick

I heard that same story on NPR this morning. One of the commentators pointed out that the President was trapped between "Free lunch Republicans and Do nothing Democrats" in Congress.

Without an initiative even making it out of committee, it's hard to lay the problem completely at Bush's feet. Congress needs a few whacks for this too.

If I had my guess, BTW, I'd say this country will someday bite the bullet and make SSN payroll taxes apply on some level to one's entire earnings, not just the first $70,000 (or whatever the cut-off is now). That solution isn't regressive and would generate revenue from wealthier Americans.

Great. More taxes. That would seriously suck.

Not so easy Derick, because the "cash" you and I put in today is needed for the present recipients so it son't be around when we need it. The conversion is going to be very expensive because the present retirees and soon to be retirees have benefits but no cash balances saved.

jf

Derick, I think every person who's paid into the system feels the same way, me included. The reality, however, is that it just isn't going to happen. We are funding our parents' benefits and, well, there just aren't enough workers younger than us to shoulder the burden when it's our turn.

The boomers have been squeezed and shafted all the way down the pike because of the enormity of our generation. Kinda like squeezing a watermelon through a drinking straw.

But Jack you are forgetting that a conversion to a cash balance system could easily result in a 40% loss of benefits to those who "get converted". Believe me, I know. So do a lot of major US corporations currently in court defending themselves against angry employees.

Derick

JKeene, it is a Republican Congress and Republican president. I'm afraid Bush has to wear this one. I mean, "presidential leadership" includes leading (or, more accurately, pressuring) Congress.

Cindy,

"If I had my guess, BTW, I'd say this country will someday bite the bullet and make SSN payroll taxes apply on some level to one's entire earnings, not just the first $70,000 (or whatever the cut-off is now). That solution isn't regressive and would generate revenue from wealthier Americans."

I agree with you that this will happen one day. But it is these people that are the least likely to need or use the system.

Why not make it mandatory that anyone making over $250,000 has to adopt and support a family with a gross income of less than $50,000.

lb

The problem is more than 4 years away.

Cindy, you can be "afraid" Bush has to wear this one, but I suspect you're actually trying to tag him with it. I don't buy it. He was able to get a resolution through Congress authorizing force in Iraq, and even though we're approaching one thousand dead soldiers that's nothing compared to cutting Social Security. Instead of two thousand mourning parents spread across the country imagine two thousand angry grandparents in every congressional district (that's a low estimate). That's why Congress won't act.

If you have an idea on how Bush could apply some pressure that would make Congress move, please share. I'll read it.

plays, very true. But the other part of the problem not being mentioned is that the money we pay into SS is going to fund other governmental programs.

It irks me to no end to think that by the time I retire, the retirement age will probably be 99 and the monthly pay-out for this "entitlement" will be $100. All because some beaurocrats in Washington can't figure out how to manage a budget. It's my money and I want it.

The failure of SS is probably one of the single biggest arguments for smaller government.

Derick

The present value of the shortfall for Social Security only was $3.2 Trillon.
Hard to put a $ value on the shortfall but $10 Trillion might be in the ballpark. Giving a total present value of the shortfall of $13 Trillion or so. About 160 times as much as $80B.

JKeene, the way you lead on this issue is you put a plan together, get Republican sponsors in the Senate, and do what Reagan did -- take the case directly to the American people in the form of speeches to move the issue onto the national agenda.

You know, kind of how Bush pulled together support for the Iraq war.

Bush chose not to lead. I don't mean it to be a partisan dig, really. It's just a fact. Besides, I think privatizing SSN is not a good idea, so I'm rather glad Bush didn't pursue it.

When faced with the choice "pay me now or pay me later", if you chose "pay me later" you will always pay more.

Social Security worked fine when there was an ever-increasing workforce. But that just ain't the case any more, and anyone who has looked at census data, birthrate data, or just looks around his or her own neighborhood at the dwindling number of tricycles going down the sidewalk can see for themselves. The current system is doomed.

I didn't realize that there was a salary cutoff for SS taxes. Sheesh. Another gift to the wealthy. It also doesn't apply to non-salary income like stock dividends and capital gains. Double-sheesh.


Fewer and fewer people get pensions from their employers. (Add that to the discussion of current job creation: newly created jobs these days rarely feature a pension in the benefits package.) My company just restructured its pension program so I will be getting much less than I was told when I hired in 15 years ago.

Finally, people are living longer than ever before.

The train wreck is imminent.

Bush started to do something his first few months in office. 9/11 effectively scuttled it. It would have been impossible to build a consensus for both issues simultaneously. The one he chose was the most dire even if not the most difficult.

Good morning, Mr. Bryan (probably good afternoon where you are).

That is a valid point, but in the meantime Congress has dawdled away its time on such crucial issues as the so-called "partial birth abortion" ban, and a constitutional amendment banning gay marriage. The first of these has once again been declared unconstitutional, the second fell flat on its keister (sp?).


The republican-controlled congress, in cooperation with the republican-controlled executive branch have done nothing of consequence on these issues...other than that wonderful gift to the drug companies paid for by U.S. medicare recipients.

Whoever chooses to address this issue will do so in their last term. If they're smart, they'll make it their second term.

Given the choice, I'd take medicare over social security.

I think people are living longer and probably collect more checks than they used to, plus there are fewer workers per recipient.

I agree, Susan.

I'll take MediCare. Meanwhile, I'm shoving as many $ in my 401(k) as I can afford, because like Cindy, I think my annual Social Security statement is a cruel hoax.

How much do you suppose it costs the Social Security Adminstration to send those little hoaxes out?

Couldn't that money be better spent on something other than propaganda?

Thanks for raising this topic, plays88, and its one that cries out for serious work. It's hard to get a sense of whether Greenspan is softening the turf for that work, or what.

There is an interesting report from CBP that places SS numbers in some useful context. Might interest some

I'd like to see both candidates answer question of this Voter Question Guide put out by the Concord Coalition:


"The Social Security trust fund does show a positive balance thru 2042. However, the trust fund is simply an accounting device with "assets" consisting of Treasury IOU's. The cash needed to pay these IOU's will have to come from tax increases, spending cuts, or borrowing from the public, all unattractive options for future policy makers. The key point is that the trust fund are also taxpayer liabilities. Their existence on paper does not ease the fiscal challenge of paying future benefits."
Link -* in PDF format.

Apparently, Bush is sticking with politically safe generalities as is, alas, Kerry.

pianojuggler,

I believe the salary cutoff is 90,000 a year for social security.

What do you consider wealthy?

I feel sorry for anyone that has more than 30 years to retirement. We are paying into this forced savings plan that will most likely return nothing.

Clearly a disaster is on the horizon.

Anyone who makes more than I do.

Seriously, I'd say anyone in the top 20 or 15 percent of income or net worth. I don't know what that is in annual income. Help me out, here.

I would rather be in the top 15% of net worth than top 10% of income.

If I am not mistaking, a family making 200k a year would be in at least the top 5% of income. I don't consider that very rich, once you factor in taxes and allow them some small rewards for their hard work.

For me, if your household income is 500k a year or more you are doing quite well and would fall in the "pay more because it won't hurt you so much" category.

It's twisted, really.

If you're wealthy (that is, make more than $90,000), then you get to stop paying SSN for wages above that. OK, got it.

If you're wealthy when you retire, then you still get to draw SSN, even if you're Bill Gates, because SSN isn't means tested. OK, got it.

So a worker who made, say, $80,000 a year each year his entire life would have paid SSN taxes of about 7% of his income each year.

Yet a worker who made $125,000 a year each year his entire life would have paid SSN taxes on less than 7% of his income a year.

But both workers would draw the same SSN payment.

Now, how is that fair? Did I misunderstand something about how this works?

Cindy,

Should the higher earner be given a higher payout then? I could see lifting the cap if you get more.

My wife and I max out, but probably will see very little if any when we retire (at least 25 years).

Is that fair either?

Dammit people, pay attention.

It has long been known that the cornerstone piece of legislation for Bush's second term, is Social Security reform. It's not on the table right now, because it is lousy third-rail politics.

But there are a lot of representatives, and senators, watching and waiting for the hammer to fall. The President has made his mind up on the issue, and it will be forthcoming.

It's gonna be a heckuva battle, and well worth watching...

Cindy,

What do you consider wealthy, in terms of income?
I have lived in your neck of the woods and 90k doesn't go very far up there at all.

What you might be missing is that Social Security is not an investment plan, it's an intergenerational wealth transfer scheme designed to provide a minimal stipend to those whose other retirement income streams have failed. Everybody gets the same payment because its a minimal stipend, not because they put in the same amount. What they put in is long gone, their payments became the prior generation's stipend, while the next generation's payments become their stipend. There's no investment going on, so framing it in terms of a return on payments is incorrect.

What you and I will get depends on how many of our kids are employed, and how many immigrants we can attract and employ.

Heckuva battle for sure. Unless Bush can find some way to get the Dems to call off the dogs, this battle is going to be fought district by district, with knives. I don't think he can do it. Even if he wins the election forty-eight states to two I wouldn't give him more than a twenty percent chance to pull it off.

No he can't. He won't. Easier to pay lipservice than pick up the hammer and get to work. He hasn't got the political skills needed to carry it off. Luckily we have only a few more months of him. '

Correction. Everybody does not get the same amount. THe amount depends on the number of quarters of coverage you have charted, the age you are when you start drawing, and the year in which you start drawing. There is a ceiling, however.

Kathyk, thanks, I should have mentioned that.

Maybe if the Pubs had stuck to Clinon's plan of locking the SS trust fund, things wouldn't be in as big a mess as they are today - just maybe. I've always said, the Republicans covert agenda is to bankrupt it, and all other public benefit programs. Back to the days of poor houses and work farms - not sure where the gray heads will be going.

They way it could have been

Wrong, as usual, neophyte.

What a politcian wants - any politician, of any political persuasion - is a legacy. Clinton pegged the meter in that department, but all pols have huge egos, or they wouldn't be in the game.

Bush is 3 for 4. 4 for 4 is a legacy.

jkeene,

I am not looking to make money on my investment, just to get something back. If I pay 7000 for 20 years and stand to get nothing I am going to be a little p***ed!

Clinton was no more serious about SS reform than any other politician. The "lock box" was a scam pure and simple. The problem is not that the trust fund isn't big enough (for now). The problem is that it is all IOUs (treasury bonds). "Locking" it does nothing to solve that problem. Nor does it solve the demographic problem that will eventually hit any Ponzi scheme.

Cindy

"It's twisted, really.

If you're wealthy (that is, make more than $90,000), then you get to stop paying SSN for wages above that. OK, got it.

If you're wealthy when you retire, then you still get to draw SSN, even if you're Bill Gates, because SSN isn't means tested. OK, got it.

So a worker who made, say, $80,000 a year each year his entire life would have paid SSN taxes of about 7% of his income each year.

Yet a worker who made $125,000 a year each year his entire life would have paid SSN taxes on less than 7% of his income a year.

But both workers would draw the same SSN payment.

Now, how is that fair? Did I misunderstand something about how this works?"

Assuning that each one of these guys (women don't make this kind of money) worked 40 years.

Your $80,000 a year guy would have paid in $224,000. while the $90,000+ guy would have paid in $252,000. Now each of them would draw the same amount.

Now, how is that fair? Did I misunderstand something about how this works?"

lb

posted by lb Boy oh boy, are you ever out of touch with the world! LOTS of women make that kind of money.

And as long as republicans are running the show, each and every one of us had better be socking away as much as we can on our own to afford retirement. After all, we know that government handout programs like Social Security and Medicare are liberal socialist institutions.[/b]

Glad to see you think people should be responsible for themselves instead of becoming slaves to a Socialist government. Your retirement after all, is *your* responsibility, not the rest of the country's.

It's not mean spirited to tell people to plan for themselves. The boat is sailing towards the iceberg. We can either pretend the boat is unsinkable or tell people to prepare.

We live so much better than most of the world or most people throughout history - and prepare so poorly for what lies ahead.

Ken