Tuesday, January 04, 2005
Will the Socail Security Promise Be Broken? Yup!
Private Accounts designed to ease the blow of major benefit cuts
I was in a meeting before the holidays and asked a stupid question. "How will individual accounts under social security help solve the funding issues facing the program." Everyone just kind of looked at me. The fact is that private accounts, or the limited concept of private accounts talked about by the Bush Administration, do nothing to solve the funding issues in the social security program, rather they actually aggarevate it. But the hope is, I guess, that a higher return on those funds (up to $1,000/yr.) will allow the government to cut back promised benefits for future retirees (ie.- us). How much of a reduction are we talking about? According to the WaPo, my generation will see benefit cuts of between 25 and 45%. (Of course it won't realy be a 'cut', oh no, a change in indexing that will 'slow the growth' of unfunded liabilities -most likley).
I welcome the debate on this issue. The federal retirement program does have some funding issues, although I am not convinced it is as bad as people say. I'm more in the Lindsey Grahm camp of upping the threshold of income taxable for the program (currently FICA cuts off on income over $90K). An easier fix.
But make no mistake, the future benefit cuts to Social Security are in part, the cost of the tax cuts and war in Iraq today. Call me in 25 years to discuss if it was worth it.
Social Security Formula Weighed
Bush Plan Likely to Cut Initial Benefits
http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics
I was in a meeting before the holidays and asked a stupid question. "How will individual accounts under social security help solve the funding issues facing the program." Everyone just kind of looked at me. The fact is that private accounts, or the limited concept of private accounts talked about by the Bush Administration, do nothing to solve the funding issues in the social security program, rather they actually aggarevate it. But the hope is, I guess, that a higher return on those funds (up to $1,000/yr.) will allow the government to cut back promised benefits for future retirees (ie.- us). How much of a reduction are we talking about? According to the WaPo, my generation will see benefit cuts of between 25 and 45%. (Of course it won't realy be a 'cut', oh no, a change in indexing that will 'slow the growth' of unfunded liabilities -most likley).
I welcome the debate on this issue. The federal retirement program does have some funding issues, although I am not convinced it is as bad as people say. I'm more in the Lindsey Grahm camp of upping the threshold of income taxable for the program (currently FICA cuts off on income over $90K). An easier fix.
But make no mistake, the future benefit cuts to Social Security are in part, the cost of the tax cuts and war in Iraq today. Call me in 25 years to discuss if it was worth it.
Social Security Formula Weighed
Bush Plan Likely to Cut Initial Benefits
http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics
