Page 286 of the hardcopy in the Social Security section.
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The President is committed to strengthening the Social Security system and has put forward three goals for any reforms: strengthen the safety net for future generations; protect those who depend on Social Security; and offer every American a chance to experience the opportunity of ownership through voluntary personal retirement accounts.
The President has proposed reforms to address the system’s long-term financial shortfall while making Social Security a better deal for today’s young workers. Under the President’s approach, Social Security would include voluntary personal accounts funded by a portion of workers’ payroll taxes. The 2007 President’s Budget includes the estimated impact from the creation of personal accounts. The accounts will be funded through the Social Security payroll tax. In the first year of the accounts, contributions will be capped at four percent of Social Security taxable earnings, up to a $1,100 limit in 2010, increasing by $100 each year through 2016. The President has also embraced the idea of indexing the future benefits of the highest wage workers to inflation while providing for a higher rate of benefit growth for lower-wage workers. This measure would significantly contribute to the solvency of the system. By adjusting the way benefits are calculated, progressive indexing would eliminate nearly 70 percent of annual cash shortfalls by the end of the Social Security Trustees’ long-range (75 year) valuation period, trending towards greater improvement thereafter. Because progressive indexing would index benefits for lower-wage workers to wage growth, which generally grows faster than inflation, benefits would grow faster than the poverty level. This will keep a greater portion of future seniors out of poverty than today.
By adopting progressive indexing and allowing young workers to create voluntary personal retirement accounts within the Social Security system, the President’s recommendations would provide future seniors with real money instead of the current system’s empty promises. Indexing benefits partially to inflation rather than wages allows the Government to save significant sums in future decades, money that would be used to maintain faster benefit growth for low-income seniors. Without Social Security reform, benefits for future seniors will have to be cut about 30 percent across-theboard.
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I also did a quick search on the Analytical Perspectives document. It mentioned the existance of personal accounts, but had no more details.
My analysis: $1100 is better than nothing, but that's only about one tenth of my total SS (not counting Medicare) taxes. I would like to be able keep more in a personal account. Also, no mention is made of how that money can be invested. Can I put it in stocks, or will I be limited to treasury bonds?