Skip to comments.Marco Rubio’s Right on Social Security
Posted on 05/15/2014 7:01:56 AM PDT by SeekAndFind
The funny thing about third rails in politics is that there are many of them. Senator Marco Rubio seized two important ones on Tuesday. If the quality of his ideas this week are any indication, we believe hell live to do so again.
His comprehensive speech addressed how the federal government ought to support the elderly, laying out a plan to shore up Social Security and explaining and endorsing Paul Ryans approach to Medicare reform.
The two key planks to Rubios Social Security proposal are a gradual increase in the retirement age, tied to increases in American life expectancy, and a change to the growth of benefits. He wants middle- and high-income Americans to see their benefits grow more slowly and the poor to see their benefits grow more quickly. He also would eliminate payroll taxes for workers over the age of 65 and eliminate an antiquated reduction in benefits for beneficiaries who opt into the program early but keep working.
Undergirding these ideas is a positive conservative vision for Social Security. Explaining that it has served his family well, Rubio argued Social Security ought to be a strong, reliable safety net that encourages, not discourages, work and economic prosperity. And with millions of seniors still living in poverty, the system ought to be more generous for those who are still slipping through the cracks.
Parts of the 80-year old Social Security system, including its earnings test for retirees aged 62 to 65, are actually structured to push Americans out of the workforce. Economists once thought that getting older workers to quit was a good way to create jobs for younger workers, an idea that has since been entirely discredited. People who are well enough and willing to work through their 60s and into their 70s should be encouraged to do so especially since our country has an aging population and shrinking labor-force participation.
Stronger economic growth, as Rubio explained, is the best way to help close the gaping hole in Social Securitys budget picture. But on its current trajectory, the programs trust fund will be exhausted, and benefits will be legally cut by 25 percent, just a couple years after Senator Rubio reaches retirement. As the program consumes an ever-larger portion of the federal budget, hes right to suggest adjusting the growth of its benefits now. Without more specifics, its hard to say if Rubios ideas will bring the program into actuarial balance for the long term. But it would certainly close much of the funding gap, even if it doesnt go all the way.
The Left, meanwhile, is increasingly suggesting that we open the gap wider. Senator Elizabeth Warren, whod like to adopt a more generous (and highly unreliable) way of adjusting benefits for inflation, has offered no explanation of how shed pay for it. She argues that Americans are undersaving for retirement which is true, though its not as serious a problem as she believes and suggests averting the crisis by having the government pretend to save for them. Rubio has a better answer here, to open up the efficient, lightly subsidized Thrift Savings Plan, a kind of 401(k) for federal employees, to Americans whose employers dont offer a retirement plan. Plenty more can be done to encourage savings, but its one of the cheapest ways to help make the working class into asset owners and savers.
If Democrats just want to preserve Social Security as is without the kind of changes Rubio has proposed, it will soon mean ruinous new taxes, or less spending on proper federal priorities just to feed the welfare state. Which typifies much of the domestic-policy thinking of American liberals: defensive, myopic, and uncreative. Marco Rubios conservatism is just the opposite.
If the polls are correct and Mark Pryor manages to rise from the electoral dead by attacking Cotton for supporting SS reform, you can kiss any potential SS reform goodbye.
Terrified Pubbies will not go anywhere near it.
Eventually the “reform” will be Liz Warren’s idea to extend FICA taxes to every penny of income.
What a RINO joke
RE: What a RINO joke
What about his SS proposal?
Undergirding these ideas is a positive conservative vision for Social Security.Is that anything like the so-called conservative case for gay marriage that was being bandied about last year?
greece, here we come
We in Florida have learned that Marco will say pretty much anything to get elected.
That those who put the most in should get the least back? and those who put in very little should see benefits skyrocket?
A brand new welfare scheme.
Not a conservative approach at all.
I’d support those approaches on SS too. Good for Rubio, willing to express a complicated idea clearly on a sensitive issue.
I was going by what the article said
Rubio’s making an unsupported assumption and attempting to buttress that weakness with a pure appeal to emotion with the “stick to the wealthy” two-tier plan.
The unsupported assumption is about the increasing lifespan continuing. With O’Care in place, I find that to be lacking in evidence. In addition, anything that assumes a straight line into the future better have a load of facts behind it.
The class-envy appeal to emotion is simply base politics with the two-tier plan. If the money is withheld at the same rate, I don’t see they have a leg to stand on for the payout to be different.
What he really said and every congress person agrees ....."If you had died like you were supposed to at age 65 1/2 according to the SS Plan, we wouldn't be in this mess."
I just don’t include Social Security in the “Welfare State” and to think that 1400 dollars is a lot of money for working 50 years is quite insane. Sorry the reason that Social Security is a mess is because Congress raided the slush fund or whatever you call it. They should have to recoup all that money themselves. Thieves.
Eventually the reform will be Liz Warrens idea to extend FICA taxes to every penny of income.
I would just be glad when my Boss stops coming out in July and says to all of us, well I begin my “raise from now until the end of the year”....he finished paying the max to Social Security while the rest of us continue to pay for the rest of the year. Now I am not saying that he should pay more. All I am saying is he should shut the heck up.
Imagine if the 15% of your income (7.5% from you and 7.5% from your employer) taken for FICA were invested in conventional investment instruments.
If you worked for 40 years between ages 20 and 65, you’d be a millionaire at retirement.
In just 20 years, I’m halfway there just applying 4% with employer matching to a 401K.
Maybe he didn't, but the article says: " He wants middle- and high-income Americans to see their benefits grow more slowly and the poor to see their benefits grow more quickly. "
How is that idea anything other than redistribution/welfare?
Yup. And then it'll be means tested on the recipients' end. Social Security is quickly becoming welfare.
Truly SS needs to be gutted. Anyone under 40 should be told they will not ever receive their benefits and no further increases to withholding but that they will continue to pay the tax.
RE: Anyone under 40 should be told they will not ever receive their benefits and no further increases to withholding but that they will continue to pay the tax.
So, they will be paying for current retirees but won’t get anything when they reach retirement age?
What could go wrong???
Social Security was always intended to be general revenue. It was a designed as a Ponzi scheme and Congress was handed the money, they didn’t have to raid anything.
Shrinking labor force with 92 million Americans out of work? Imbeciles!
Are you afraid to debate the actual content of the article without resorting to personal insults and attacks?
Look it’s already socialism. It’s got Social right there in the title, and is a direct transplant by FDR of principles from the German Social Democrats going back to the time of Bismarck.
Social Security IS socialist already. The problem is that it’s structured in a way that is completely unsustainable to government finances. The government, in the American system, is the same as the citizens. There is not a separate entity called THE GOVERNMENT. There is only us. We have created this mess over a few generations and we have to fix it now.
When we have a program that a vast majority of people think is basically here to stay and beneficial, socialist or not, but that program is actuarially unsound it needs to be changed in a way that either the revenues into the system are increased (bad) or the funds paid out are decreased (bad). So between these two, the tweaks, and be clear about that we are talking about microscopic tweaks, not “skyrocketing” benefits for the poor and slashing benefits for those who paid in more, the tweaks ought to address the fact that life expectancy has increased enormously since the program was created, and to further acknowledge that there are so many policies designed to boost the asset values of the wealthy, that they have done very well through asset price inflation.
So raise the retirement age slightly and gradually, and reduce the growth rate of benefits to a chained-CPI for everyone except the lowest income segment.
see my post just above. Not afraid of anyone when it comes to Social Security reform.
So why not stop short of accusing someone who disagrees with you if they are menstruating?
The supposed strength of your argument is seriously undercut by the ad hominem qualities with which you present it.
Because I see that guy on here all the time and he’s always bitching hysterically about things he shows zero understanding of. He’s a whiner.
Our money is being stolen. See how places liek galvenston, Texas are able to make much more money.
A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financials calculations.
A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.
And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.
So identify the hysterics, ridicule nonsensical portions of his argument, and present your own counter points.
By making the personal attack, you undermine your own argument.
By justifying it because “he’s a whiner”, you paint yourself in much the same light.
His original comment, BTW, is a slightly hyperbolic paraphrase of a quote from the article - which makes your response all the more damning to your case.
I intensely dislike Rubio, but we do have to gradually raise the retirement age from 67 to 70 or 71
He wants middle- and high-income Americans to see their benefits grow more slowly and the poor to see their benefits grow more quickly.
No, we cannot means test Social Security without turning it into welfare. I don't mind Rubio coming out with a mixed bag that includes some good ideas, but I do not want him in our White House.
Anyone who has received more in Soc Sec than what he paid in (plus a reasonable rate of return) is at that point forward a welfare recipient. Ditto Medicare.
Sure roofers should work until they are 71. Yeah an A/C tech in their 60’s should crawl around attic in the summer. Keep ‘em working till they drop.
When they decide to increase benefits for those who paid in little by taking from those who paid in more, it becomes a welfare system
SS could use a bailout. One-time payment that pays out everyone’s accounts immediately. You then have the option (come tax-time) on whether or not you have SS taken out of your paycheck. If you do, it goes in an account that only SS can touch. If not, you keep your own money, and can put it in your own 401k or whatever.
Or, just get rid of it entirely. I’d be happy with that as well.
“Is it your time of the month?”
I also think it's a stretch to say the vast majority of people think it's here to stay. Most 40 to 50 year olds that I know would rather have all their contributions back and have the ability to invest that money themselves. Bottom line is, people do see it going away and want their money back.
Anyone who has received more in Soc Sec than what he paid in (plus a reasonable rate of return) is at that point forward a welfare recipient. Ditto Medicare.
Which makes VERY few Welfare recipients at least on the Social Security side. It is horrible that we only get an average of 1400 dollars after giving so much throughout our working years. I know I won’t get back what I put in. If you do, I quite frankly am glad that someone will that it least is conservative.
We have created this mess over a few generations and we have to fix it now.
Didn’t President Reagan already fix Social Security? I have heard that forever. Why are we questing him? He made it so that widows do not get Social Security anymore. Kids stop getting Social Security when they turn 18 instead of 22. He raised the age to 67. If it was not going to work, why didn’t he do more. Now we have to revisit the mess?
For full benefits? Yes. For reduced benefits (which should still be pretty decent considering what skilled roofers/techs make), retire when they need to, or shift to a job that is less physical. Right now, the average person on social security is being supported by five active workers (5:1). That is projected to drop to 3:1 in 2040, and 5:2 by 2080. It's not sustainable unless we raise the age, probably to age 75 by 2080.
Yes, what he and Moynihan accomplished helped, but also created the huge problem of the untrustworthy trust funds. The trust fund approach masked the damaging accounting deficits we were creating, by making the annual cash flow deficits much smaller than the accrual deficits.
Yep, we have to revisit it. And I know it’s a blink of an eye but that was thirty years ago for a massive system.
Sure Social Security needs to be “fixed.” But only after gold-plated government retirement/medical benefits programs are “fixed” first.
What do you think of life and health insurance?
I'm no fan of social security but it was sold as an insurance program and that is how many folks look at it.
It is a socialized pension insurance scheme, but the benefits are absolutely already skewed in favor of those who have paid in the least, not to mention the taxability of the income for those who have other income in retirement further adding to the progressivity of the system.
But if you look at an actual opinion poll you’ll also see it’s one of the most popular programs of the government, including among 40-50 year olds. It’s not going away, but it needs to be adjusted, very slightly and very slowly, to put it on an actuarially sustainable footing.
Nope, they will have to fund their own retirement, which is most likely going to happen anyway, leaders should have the courage to be honest.
What they do not factor in is that legalizing the legals will increase unemployment among current employed. It will open the gates to more illegals, because the newly legalized employees cost too much. The newly arrived illegals will then need to be legalized ... lather, rinse, repeat.
Eventually everyone will be on SSI disability (permanent unemployment benefits).
Sounds magical. Now all they need to do is create the money.
It’s what they did with TARP. Yea, it’s pulling money out of nowhere. But it’s better to do that and get rid of a negative-running balance, then to let SS get even more into the red.
And of course, bonus points if we can pay off the (one-time) payment with permanent cuts elsewhere ;)
TARP was half a bil.
SS is 12 tril.