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Jolie Rouge
02-03-2005, 02:03 PM
Are you in favor of creating personal retirement accounts for Social Security recipients?

Yes -- 53%
No -- 30%
Not Sure -- 17%

Jolie Rouge
02-03-2005, 02:50 PM
Bush hits road to promote Social Security plan
]Thursday, February 3, 2005 Posted: 2:00 PM EST (1900 GMT)

FARGO, North Dakota (CNN) -- President Bush on Thursday kicked off a five-state tour in North Dakota to push his plan to overhaul Social Security, an issue highlighted in his State of the Union address.

Speaking at North Dakota State University, Bush stressed he is willing to work with members of both parties to fix Social Security before it faces a funding shortage. "Now is the time to put partisanship aside and save Social Security for younger workers," he said. "I believe the role of a president and I believe the role of a congress is to confront problems, not leave them for future generations."

In his speech Wednesday night, Bush provided the most detailed look yet at that plan, announcing that what he calls voluntary personal retirement accounts would be made available to workers younger than 55. (Full story : http://www.cnn.com/2005/ALLPOLITICS/02/02/sotu.main/index.html )

He rebutted critics who have accused the administration of overstating the seriousness of Social Security's future financial problems. "Thirteen years from now, in 2018, Social Security will be paying out more than it takes in, and every year afterward will bring a new shortfall, bigger than the year before," Bush said. "By the year 2042, the entire system would be exhausted and bankrupt."

Sen. Barbara Boxer, D-California, told CNN's "American Morning" Bush's plan will fall apart if it is not changed. "Even if we did nothing, [Social Security] would still have enough money in there to pay everyone 70 to 80 percent of benefits," she said.

Republican Sen. Chuck Grassley of Iowa, who chairs the Senate Finance Committee, criticized Boxer for her comments. "The Democrats that are condemning the president for maybe wanting to cut benefits are willing to tell you on your very same program that in the year 2042 it's OK to only pay 70 percent of benefits," Grassley said. " And that's not a cut? That's a cut."



After touting his plan in North Dakota, Bush heads to Great Falls, Montana, and then will spend the night in Omaha, Nebraska. On Friday, the president will travel to Little Rock, Arkansas, and Tampa, Florida. Bush began Thursday in Washington at the National Prayer Breakfast, where he addressed U.S. political and world leaders. He promoted "faith-based programs" by calling them leaders of the nation's "armies of compassion."

During his re-election campaign, Bush promoted his plan to allow younger workers to put part of their Social Security payroll taxes in accounts that they would own, in return for lower guaranteed benefits at retirement. He pledged that the change would not affect the benefits promised to Americans at or near retirement.

Social Security's trustees have estimated that the system will begin spending more money than it receives from payroll taxes in 2018; the Congressional Budget Office, using different estimates, put the date at 2020.

If that happens, in order to meet its obligations, Social Security will have to begin using money from its trust fund, built up over the years when more tax money went into the system than was spent.

Without changes, the trust fund is projected to last until 2042, according to Social Security's actuaries. The CBO puts that date at 2052.

After the trust fund is empty, payroll tax revenue would cover 73 percent to 81 percent of benefits under the current method of increases, according to estimates from both Social Security and the CBO.

The CBO noted that because of those expected benefit increases, the benefits would still be higher in current dollars than what today's retirees are getting.

Democrats have attacked Bush's plan, charging that diverting payroll taxes into private investments would threaten retirees' benefits and that transition costs to the new system would drive up the deficit.

Even Bush's fellow Republicans, nervous about the political downside of tinkering with Social Security, have been pressing him to offer more specifics.

In his speech Wednesday, Bush did not offer a nuts-and-bolts proposal, but instead provided a broad outline of what he would and would not accept and vowed to "listen to anyone who has a good idea to offer."

Bush said he would consider limiting benefits for wealthy retirees; linking increases in benefits to prices rather than wages, which would slow the rate of increases; raising the retirement age and discouraging early retirement; and changing the way benefits are calculated. However, Bush said he would not support higher payroll taxes or a plan that does not "permanently" fix the looming financial gap. He also said changes must not affect anyone who is retired or nearing retirement, and he said any changes must be gradual "so younger workers have years to prepare and plan for their future."

The current Social Security payroll tax is 6.2 percent of a worker's gross pay, which is matched by his or her employer. Bush said the amount of that tax that could be put in a personal account would rise over time, eventually reaching 4 percent of gross pay.

Bush said the personal accounts would operate under "careful guidelines" to ensure the money goes into a conservative mix of stock and bond funds with low investment fees, and account holders would also be given options "to protect your investments from sudden market swings on the eve of your retirement."

He said the system's organization would be similar to a savings plan already offered to federal employees, a government-administered plan that offers a choice of five broad-based investment funds. "Here is why personal accounts are a better deal," the president said. "Your money will grow, over time, at a greater rate than anything the current system can deliver, and your account will provide money for retirement over and above the check you will receive from Social Security."

www.cnn.com/2005/ALLPOLITICS/02/03/bush/index.html

adorkablex
02-05-2005, 12:21 PM
I think if a person wants to go that route then they should be able to. However if someone doesn't want to do so.. they shouldn't be forced to do so.

schsa
02-05-2005, 04:41 PM
I wonder how much it would cost the government if we all got our own SS to invest and not let them touch it. I wonder how Bush would finance his war? SS is not going out of business but Bush is borrowing from it to pay for forces in Iraq.

Jolie Rouge
02-08-2005, 05:13 PM
Posted 2/8/2005 4:34 PM

Poll: Some benefit changes OK
By Susan Page, USA TODAY

WASHINGTON — Most Americans are willing to endorse painful steps to ensure Social Security's long-term solvency — steps that nick the rich, that is.

Two-thirds of those surveyed by USA TODAY/CNN/Gallup over the weekend say it would be a "good idea" to limit retirement benefits for the wealthy and to subject all wages to payroll taxes. Now, earnings above $90,000 aren't taxed.

But some ideas that President Bush said in his State of the Union address were on the table are rejected by solid majorities. By 2-to-1, Americans oppose reducing retirement benefits for those now under age 55. Nearly as many say it's a bad idea to increase the retirement age, and 57% are against reducing benefits for early retirees.

Six in 10 oppose raising Social Security taxes for everybody, a step Bush has ruled out. "It's like when you ask about taxing cigarettes, the people who support it, amazingly, are those in the population who don't smoke," says Robert Reischauer, president of the Urban Institute and former director of the non-partisan Congressional Budget Office. "If the sacrifice includes them, they think twice."

Even though Bush's address focused on Social Security, he failed to convince more Americans that the program is in a state of crisis or that his approach is the right way to fix it. In early January, 18% polled called it a crisis. Now 17% do.

Support for Bush's plan — creating individual investment accounts and reducing guaranteed benefits — is unchanged: 40% call it a good idea; 55% a bad one.

Views vary by income:

• Three-quarters of middle-income workers — those with annual household incomes of $30,000 to $50,000 — say it makes sense to limit retirement benefits for the wealthy. That's 10 points higher than among those who make $75,000 or more.

• Three-quarters of middle-income workers support lifting the wage cap so all income is subject to Social Security taxes. That's 15 points higher than those at the top.

The poll of 1,010 adults, taken Friday through Sunday, has an error margin of +/— 3 percentage points.

http://www.usatoday.com/news/washington/2005-02-08-poll-social-security_x.htm?csp=24&RM_Exclude=Juno

Jolie Rouge
02-09-2005, 10:30 PM
SOCIAL SECURITY: THE POLITICAL STRUGGLE OF OUR AGE
Sat Feb 5, 2005
By David M. Shribman

For years the hackneyed line about Social Security (news - web sites) was that the subject was the third rail of American politics: Touch it and you die an utterly horrible, utterly senseless death. No one voluntarily took on this issue.

Then again, no president, with the possible exceptions of James K. Polk and William McKinley, made pre-emptive strikes part of his diplomatic repertoire either.

So into the breach we go, solving problems that reach into another decade even as our own deficit (fueled by that discretionary war) reached $412 billion in the last fiscal year and, according to a summer 2004 Congressional Budget Office forecast that assumed federal spending will grow with the economy, will be basically the same figure ($414 billion) in fiscal 2009.

The economists can debate whether taking on this issue is prudent right now, with other financial issues -- including the futures of Medicare and Medicaid and growing rebellion over the broadening reach of the Alternative Minimum Tax -- beckoning. The political scientists can only salivate at the notion of exploring the philosophy behind Social Security, for it raises every important contested principle of government known to humankind.

Like, to take just one: Personal freedom vs. collective responsibility.

Whole books have been written on that subject, whole college courses have been dedicated to examining that topic, whole lives have been obsessed with resolving the difficult questions that grow out of it. And the president wants the Congress, notoriously reluctant to grapple with the hard issues, to wrestle with this issue, without the pressure of imminent crisis, and to reach a decision in about 20 months. Pretty neat trick, if you can do it. It's never been done before.

Recognizing that some thinkers' entire life's work has just been brushed off in three sentences and a sentence fragment, let's move on to the more crass aspects of this -- not the ultimate Ways and Means measurement, taken by lobbyists with yellow legal pads and wallets padded by special interests, of who wins and who loses financially, but the political measurement, which in a far different way can be distilled down to who wins and who loses at the ballot box.

Make no mistake: The new battle over Social Security is a struggle for political power. Republicans know this, for that is why so many of them sought political assurances from the president when they met at their Greenbrier retreat last month. Fiddling with Social Security in the past has meant fiddling with GOP House members' own security, and though few of them were in the Capitol in 1982, when the Democrats flourished at the polls by vowing to preserve Social Security, none of them is unaware of the lessons of that midterm election.

But the new Social Security issue is also a struggle for the future of American politics. The Democrats ran in 1982 as the protectors of Social Security because the demographics told them they should. Voters over 60 were the Democrats' second-best age category in the 1980 election, and just as hunters shoot where the ducks are, politicians hunt where their votes (already) are. Add to that the pattern, established even then, that older Americans are more likely to vote than younger Americans, and the Social Security strategy made perfect sense.

The party that is voluntarily giving Social Security a central role in the national conversation won the support of voters 60 or over by 8 percentage points, its largest margin of victory in November's election. That tells us two things: The first is that the Republicans feel a sense of confidence about older voters and the GOP ethos. (Who knows what assurances lurk in the internals of Republican polling figures?) The second is that the president's plan almost certainly won't substantially affect current Social Security beneficiaries.

Now let's consider the Democrats' perspective in this matter. They lost older voters in 2004, so they are hoping that they might squeeze some votes out of adopting their usual protective profile on Social Security.

But if their eye is on the prize, then they are looking at the biggest bulge in the population, the (aging, and none too gracefully) baby boomers, now roughly between the ages of 40 and 58. In the last presidential election, the Republicans barely captured the votes of this group, the margin closely approximating the nationwide 51/48 percent split.

So the Democrats will lay down their markers where it will do them the most good, and where they most need to do well. They'll portray themselves as protectors of Social Security not merely because that might let them peel off some older voters who don't want to jeopardize their benefits, but also because they want to wage war over the baby boomer voters who are worried that Social Security won't be there (or won't be as generous) when they retire.

Not such an easy battle, by the way. The boomers came of age when, for the first time, a majority of Americans were invested in the financial markets. They remember how those markets boomed -- though that's not how that generation got its name -- and how in some of those years some of them earned more in the markets than at work. They, like the boomer president, believe in markets and their redemptive powers.

But the Democrats cannot relinquish this group, which they have courted, with modest success, since Gary Hart ran his new-ideas campaign 21 years ago. They have always based their appeal on hoary visions of the future, but this time that might not be the best strategy. Perhaps they will remember that the last generation to believe in a big boom in the markets found itself, only years later, watching a Depression-era president proposing a program called Social Security.

Here are the stakes faced by a party that has lost two consecutive close national elections: If they fail, or if the Republicans blunt their assault, the president who believes in an "Ownership Society" is going to own this decade in American politics.


http://story.news.yahoo.com/news?tmpl=story&cid=1316&ncid=742&e=13&u=/ucds/20050206/cm_ucds/socialsecuritythepoliticalstruggleofourage

Jolie Rouge
02-16-2005, 10:11 PM
An eighth of every paycheck
By Jeff Jacoby, Boston Globe Columnist
February 13, 2005

YOU DON'T have to be a financial wizard to know that Social Security is a lousy investment. Unlike the money you deposit in a bank or salt away in an IRA, you don't own the money you pay into Social Security. You have no legal right to get those dollars back, and when you die you can't pass them on to your heirs. Nor can you use your Social Security account before you retire -- you can't borrow against it and you can't cash it in. You aren't allowed to put the money into a balanced portfolio. You can't even watch as the interest accumulates, since your Social Security nest egg doesn't earn any interest.


Your nest egg, in fact, doesn't even exist. Because Social Security is financed on a pay-as-you-go system, the dollars withheld from your paycheck today are immediately paid out to retirees. The benefits you receive when you retire will be funded by the payroll taxes then being collected. But because the ratio of workers to retirees is steadily shrinking, Social Security is headed for a crisis.

Within 15 years, the system will be paying out more in benefits than it collects in taxes. Its shortfalls will grow larger and larger. Bankruptcy will loom. To save Social Security, Congress will have no choice but to sharply raise payroll taxes, go even more deeply into debt, or slash the benefits paid to retirees.

This of course is the background to President Bush's campaign to create personal investment accounts, which for the first time would allow workers to own and invest -- really own, really invest -- part of the Social Security tax taken from their paychecks. With personal accounts many of the features that make Social Security such a crummy deal for today's workers would be transformed into a package most of them could support. A social-welfare program created in the age of gramophones and the Model A would be updated for a world of iPods and superhighways.

To many Democrats, such talk is heresy. Letting Americans own some of their Social Security would be too risky, they argue -- another way of saying that Americans are too dumb to be entrusted with their own money. Much better to continue entrusting it all to Washington, which has managed Social Security so skillfully that workers younger than 50 will never get back in benefits what they are paying into the system now. (Perhaps that explains why 58 percent of Americans in that age group support personal accounts, according to a new poll by Zogby International.)

Social Security wasn't always a sucker's game. As with all Ponzi schemes, players who got in early made out like bandits. For many years, Social Security deductions were minuscule. Until 1949, the combined employer/employee tax rate was only 2 percent, and it was imposed on just the first $3,000 of income, for a maximum payroll tax of just $60 a year. The first Social Security recipient was Ida May Fuller of Ludlow, Vt., who retired in 1940 after having paid a grand total of $44 in payroll taxes. By the time she died in 1975, she had collected $20,933.52 in benefits -- a return on her ''investment" of more than 47,000 percent.

It wasn't really an investment, of course. It was a forced transfer of wealth from younger people to an older one. And as the number of Ida May Fullers grew, and the value of their benefits increased, the amount of wealth that had to be transferred kept climbing. By the time I entered the workforce in 1975, the Social Security withholding rate was 9.9 percent, applied to wages of up to $14,100. Maximum tax bite: $1,395 a year -- more than 23 times the $60 of a generation earlier.

And a generation later? Today Social Security skims off 12.4 percent of the first $90,000 earned -- one-eighth of every paycheck. There are no exemptions, no deductions. It kicks in from the very first dollar of income. It is the biggest tax the average American household faces -- 80 percent of us pay more in Social Security taxes than we do in income tax.

One tiny notch at a time, payroll taxes have been ratcheted up to a level that would have been unthinkable in Franklin Delano Roosevelt's day. No wonder Social Security is so unpopular among the young. It provides no security for their retirement, while impoverishing them in the present. In exchange for an eighth of their earnings today, it guarantees nothing but higher taxes tomorrow. That there are politicians who defend this arrangement wouldn't have surprised FDR. But how shocked he would be that they call themselves Democrats.

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2005/02/13/an_eighth_of_every_paycheck/

mesue
02-20-2005, 11:14 PM
The problem is the majority of American's just don't know that much about the stock market. A lot of people lose eveything. The one good thing about the current plan is that one does have a small check in social security to help in their old age. Scenario, people take their money out, invest and lose it all, who is going to take care of them? Are their children going to? Are we as a society going to say while thier starving and homeless going to say, "Well you should have invested more wisely!" I don't know the answer but I do know that Wall Street is just bubbling over with anticipation over getting their hands on this money. Apparently this is not going to be a problem until 2042 should we decide right now or take the time to make a committment to investigate and come up with a better plan than the current one being offered by the Bush administration. And with this plan how much is this going to cost? Are we going to have classes to educate people on how to invest? Who is going to pay for that? There are a lot of things we need to look at and plan for and investigate before we do our usual knee jerk reaction which this administration seems to be famous for. I say form a commission of qualified people to study the issue, people from alll backgrounds and political affiliations and then maybe we can come up with a qualified answer and idea of what to do about the problem. We do have the time for this and can we afford not to take the time to get it right?

Jolie Rouge
02-20-2005, 11:33 PM
YOU DON'T have to be a financial wizard to know that Social Security is a lousy investment.

Unlike the money you deposit in a bank or salt away in an IRA, you don't own the money you pay into Social Security.

You have no legal right to get those dollars back, and when you die you can't pass them on to your heirs.

Nor can you use your Social Security account before you retire -- you can't borrow against it and you can't cash it in.

You aren't allowed to put the money into a balanced portfolio.

You can't even watch as the interest accumulates, since your Social Security nest egg doesn't earn any interest.

Your nest egg, in fact, doesn't even exist.

Because Social Security is financed on a pay-as-you-go system, the dollars withheld from your paycheck today are immediately paid out to retirees.

The benefits you receive when you retire will be funded by the payroll taxes then being collected. But because the ratio of workers to retirees is steadily shrinking, Social Security is headed for a crisis.

This of course is the background to President Bush's campaign to create personal investment accounts, which for the first time would allow workers to own and invest -- really own, really invest -- part of the Social Security tax taken from their paychecks.

To many Democrats, such talk is heresy. Letting Americans own some of their Social Security would be too risky, they argue -- another way of saying that Americans are too dumb to be entrusted with their own money.

Much better to continue entrusting it all to Washington, which has managed Social Security so skillfully that workers younger than 50 will never get back in benefits what they are paying into the system now. (Perhaps that explains why 58 percent of Americans in that age group support personal accounts, according to a new poll by Zogby International.)

Social Security wasn't always a sucker's game.

As with all Ponzi schemes, players who got in early made out like bandits. For many years, Social Security deductions were minuscule. Until 1949, the combined employer/employee tax rate was only 2 percent, and it was imposed on just the first $3,000 of income, for a maximum payroll tax of just $60 a year. The first Social Security recipient was Ida May Fuller of Ludlow, Vt., who retired in 1940 after having paid a grand total of $44 in payroll taxes. By the time she died in 1975, she had collected $20,933.52 in benefits -- a return on her ''investment" of more than 47,000 percent.

It wasn't really an investment, of course.

It was a forced transfer of wealth from younger people to an older one.

By the time I entered the workforce in 1975, the Social Security withholding rate was 9.9 percent, applied to wages of up to $14,100. Maximum tax bite: $1,395 a year -- more than 23 times the $60 of a generation earlier.

And a generation later? Today Social Security skims off 12.4 percent of the first $90,000 earned -- one-eighth of every paycheck. There are no exemptions, no deductions. It kicks in from the very first dollar of income. It is the biggest tax the average American household faces -- 80 percent of us pay more in Social Security taxes than we do in income tax.

One tiny notch at a time, payroll taxes have been ratcheted up to a level that would have been unthinkable in Franklin Delano Roosevelt's day.

No wonder Social Security is so unpopular among the young. It provides no security for their retirement, while impoverishing them in the present.

In exchange for an eighth of their earnings today, it guarantees nothing but higher taxes tomorrow.

That there are politicians who defend this arrangement wouldn't have surprised FDR. But how shocked he would be that they call themselves Democrats.


If you put the money in a load bearing CD you will make more interest than you are on your SS payments now.

IF you hid in in a jar and bury it in your backyard, you have more of an assurance it will be there when you need it than the present situation we have now.



The one good thing about the current plan is that one does have a small check in social security to help in their old age.

The money taken out of my paycheck now is being paid to my mother. There is no - zero - nada - assurance that it will be in place when it is "time" for us to retire in 20/25 years. Trust my own judgement or the Yahoo's in DC that spent $400 on a screwdriver ( that you have assured me can be bought at Ace hardware ) No contest. Give me my money back.

mesue
02-21-2005, 12:05 AM
It was a 600.00 plain old run of the mill hammer. LOL they mention it in the movie Independence Day I think. Most people think this money that is hiiden like this (hidden none too brightly I might add or we would not know about those 600.00 hammers) for operations that the government (Congress and Senate) does not know about, you know like the Iran contra affair in the Reagan years, of course if I recall corrently that was partly financed with cocaine wasn't it. Please correct me if I am wrong on this one, going on memeory alone here on this one.
Also Jolie somehow you and I have reversed roles your more the conservative type and I am more the liberal type. I am saying wait and investigate and you are saying give me my money and let me invest it. LOL I'm not saying it is a bad idea I'm just saying lets take the time to make sure it is the right thing to do. I recently saw a reporter say that mostly the ones who do good investments are going to be paying a huge chunk of it right back to the government, and still only able to get a monthly check from it, I'm supposing this is to cover the bad investors, a guess of course. Of course if worst comes to worst we can always invest in hammers to sell back to the government.

Jolie Rouge
03-06-2005, 09:03 PM
Social Security reform may pass
Tony Blankley

There is a high likelihood that Social Security reform will be passed within a year. I write this although most congressmen I have spoken with -- both Republican and Democratic -- currently don't expect it. In fact, many members doubt it will even come to a vote. They are certainly hoping it won't. But then congressmen and senators are sometimes nearly the last to know how they are actually going to vote.

When I was Speaker Newt Gingrich's press secretary in the 1990s, it was often the case that only weeks, days and sometimes even hours or minutes before an important vote, less than half the members expressed support for the legislation that ultimately passed. While inducements and arm twisting inevitably played its part in some last minutes decisions (and surely will on Social Security this time), the larger reason for the unreliability of early congressional opinion is that until close to the time of voting, the members are not fully aware of all the decision criteria they will face.

Depending on which side has done a better job of public persuasion, public opinion may change nationally or in their districts. There may be unexpected changes in the lineup of interest groups in support of a bill. Certain interest groups will be more or less effective in making their cases. This year, the president's outside supporters may spend up to $200 million in support of passage. Karl Rove's multi-million-person election year volunteer machinery will be rolled out to do battle. The burden of those efforts have not yet begun to have their effects.

Right now, voting no on Social Security looks like the safer vote. But if President Bush can create a sense of urgency in the public (and particularly in the districts of hesitant members), then voting no next fall may be seen as carrying its own political risks.

Often congressmen and senators assume certain provisions of a bill will be popular or unpopular, and express their early support or opposition accordingly. But they may find out their early assumptions were wrong. This could well be the case on Social Security. Currently there are about two dozen Republican House members who have told their leadership that voting for Social Security changes could be political death for them. Another about 40 members probably share that fear. If they are justified in their fears, their leadership will not try to force them to vote yes, in which case Social Security will not pass the House. After all, the Republican House leadership doesn't want to risk losing its majority status in the next congress.

But careful polling may well show these members that their fear is misplaced. Politicians rely on their political judgment built up over a lifetime in politics. This instinct is usually pretty accurate for politicians midway through a successful electoral career. But their instinct on Social Security may well be off because of the sharp difference in public attitudes based on the age of the voters.

The electorate is, of course, constantly changing. Old people die, young people come of age and start voting. We don't notice this gradual change, and usually it doesn't matter that much. But on the issue of Social Security, age is a defining measure of attitude. The Roosevelt-era voters, who hold Social Security untouchable, are dying off very quickly now, while the post-boomer generation, which discounts its reliability, is coming into its high voting rate period of life. The boomers are split.

Most congressmen over the age of 40 feel in their bones that touching Social Security is political death. But their bones may be deceiving them. When the Republican Party starts polling the specific districts of fearful members, they may well find out that properly designed, a Social Security bill may not be political death at all -- given the changing demographics. The party has several months to take these soundings, as part of a confidence-building effort for the members who will be called on to vote in the fall or winter.

Moreover, only after months of careful polling, listening and discussion with various interest groups and political factions, will President Bush settle on the various pieces of his Social Security bill most likely to gain majority support in Congress. Currently, members of Congress are imagining a fright night of all the most unpopular provisions.

The other element not currently being fully considered is President Bush's willfulness, persistence and leadership. Particularly if Iraq and foreign policy are seen to be going better by the fall, President Bush will carry a bigger megaphone in persuading the public and a bigger stick to persuade the politicians.

Thus, it is highly relevant to the politics of Social Security that Sen. Hillary Clinton started talking positively about events in Iraq last week. As a particularly acute bellwether of political expediency, Senator Clinton's positive rhetorical shift on Iraq suggests good news for President Bush. With the economy predicted to continue in healthy 3.5 percent growth for the year, and with things going the president's way abroad, he could well go into the autumn legislating season with 55-58 percent job approval.

Such a president -- armed with a carefully designed bill that finesses the hardest bits of the reform, and laying the charge of obstruction and dereliction of duty at the doorstep of naysaying congressmen of both parties -- is quite likely to get his way on Social Security reform, which almost all members, despite what they are saying publicly, know is in desperate need of rectification. And, at the margin, that shriveled but not yet fully dead sense of public duty, may move the odd vote or two.

Jolie Rouge
03-15-2005, 08:33 PM
Fed chief: Expect Social Security cuts
Greenspan tells Congress that cuts in future retirement benefits are all but inevitable.
March 15, 2005
By Kathleen Hays, CNN economics correspondent


Fed Chairman Alan Greenspan told Congress that without reform, Social Security costs could cause the economy to 'stagnate or worse.'

NEW YORK (CNN/Money) - Federal Reserve Chairman Alan Greenspan told Congress that the mounting financial pressure of a wave of retiring baby boomers is so great that cuts in future government retirement benefits are all but inevitable.

The Fed chairman told the Senate Special Committee on Aging that the nation has about three years to work out a fix. "In 2008, the leading edge of what must surely be the largest shift from retirement in our nation's history will become evident as some baby boomers become eligible for Social Security," he said in his prepared remarks.

By that date, the population 65 years and older will be more than one-fourth of the adult U.S. population, Greenspan said, referring to forecasts by the Social Security trustees. That would be up from 17 percent currently. "This huge change in the structure of our population will expose all our financial retirement systems to severe stress and will require adjustments for which there are no historical precedents," he said.

This huge demographic shift is the main reason why Social Security and Medicare are facing enormous financial obligations that he says cannot be met without some choices that most in government are loathe to make. "At present, the Social Security trustees estimate that the unfunded liability over the indefinite future to be $10.4 trillion," Greenspan noted in his prepared remarks. "The shortfall in Medicare is calculated at several multiples of the one in Social Security."

"These numbers suggest that either very large tax increases will be required to meet the shortfalls or benefits will have to be pared back," he said.

Greenspan also stressed that rising spending on Social Security, Medicare and Medicaid is one more reason why the federal budget "is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years."

"Unless the trend is reversed, at some point these deficits would cause the economy to stagnate or worse," he said.

Senator Hillary Clinton challenged the Fed chairman on his support for tax cuts early in President Bush's first term. Many Democrats blame the tax cuts for helping turn the budget surplus that existed at the end of President Clinton's first term into record deficits, and lately more and more have accused Greenspan of favoring Bush policies, contrary to his official status as an independent chairman of the Federal Reserve.

Greenspan said most leading economists at the time had expected budget surpluses to stretch into the future, citing forecasts by the Office of Management and Budget as well as by the bipartisan Congressional Budget Office. And he said that he had also pushed for tight rules on Congressional spending and more fiscal discipline. "I don't think that the issue is a question of taking a wholly different view... It turns out we were all wrong," he said, referring to the prevailing budget surplus forecasts. He also said that he would take the same position again if he was faced with the same circumstances.

Senator Clinton finished her questioning with a quick parting shot: "Just for the record, we were not all wrong, but many people were wrong."


Greenspan also repeated his support for some kind of private investment accounts. The main reason he gave is that putting part of people's retirement taxes in a private account would be like putting them in a "lock-box" so that the funds could not be diverted into spending on other government programs.

http://money.cnn.com/2005/03/15/commentary/column_hays/greenspan_socialsecurity/index.htm

Jolie Rouge
10-19-2009, 02:14 PM
Gee - I wonder who bumped this up from 2005 ? The Phantom of the Forum ?? :rolleyes: