Posted on 7/29/2003, 1:48:53 AM by Brian S
Tuesday July 29, 2003 2:09 AM
By LEIGH STROPE
Associated Press Writer
WASHINGTON (AP) - Younger Americans face a combination of tax increases, cuts in government programs and services and reduced retirement benefits needed to restore long-term financial health to Social Security, congressional investigators say.
The sooner Congress acts, the less the pain will be on future generations to keep the system afloat, the General Accounting Office said in a report prepared for Sen. Larry Craig, R-Idaho, chairman of the Senate Special Committee on Aging.
In five years, the first baby boomers become eligible for Social Security retirement benefits, marking the start of a permanent decline in the program's revenue, said the GAO, Congress' investigative arm.
``The squeeze on the federal budget will begin as the baby boom generation starts to retire,'' Comptroller General David Walker, who heads the GAO, said in testimony prepared for a committee hearing Tuesday. ``Actions taken today can ease both these pressures and the pain of future actions.''
Social Security faces a $3.8 trillion deficit during the next 75 years. But with next year's election already looming over Congress and the White House, little more than campaign rhetoric is expected in the coming year.
Several Republicans and Democrats have called for a cease-fire on Social Security as a campaign tool, but so far, it has not gained widespread traction in Congress.
President Bush in his 2000 campaign advocated letting younger workers invest a portion of their payroll taxes in the stock market, helping to shore up future funding. But his commission appointed to recommend a plan got sidelined by the 2001 terrorist attacks.
Ultimately, the commission suggested three options instead of one detailed proposal that could tie the White House to difficult and unpopular changes - such as raising the retirement age and cutting future promised benefits.
Massive, record federal deficits - $455 billion for this year and $475 billion for next - and military and financial obligations in Iraq and Afghanistan, have called into question whether the White House can realistically tackle Social Security any time soon.
Medicare and Medicaid spending, which are driven by escalating health care costs and, like Social Security, demographics, ``present an even greater problem,'' the GAO said.
By 2018, taxes paid into Social Security will be insufficient to cover promised benefits. The government also must find a way to pay back the billions of Social Security dollars it has spent and now owes the system. Assuming it can find the money, those funds will be depleted in 2042.
Last year, Social Security paid nearly $454 billion in benefits to more than 46 million people. Beneficiaries are expected to grow to more than 68 million by 2020 as the large baby boom generation settles into retirement.
Also, fewer workers will be paying into the system to fund benefits for the huge number of retirees. Falling fertility rates threaten the system's financial future even further.
Labor force growth will begin to slow after 2010, and by 2025 it is expected to be less than a third of what it is today.
Even if Bush's 2001 tax cuts expired and government spending keeps pace with economic growth, the imbalance would still exist, the GAO said.
The difficult decisions that await Congress on Social Security need to be fully explained to the public to gain acceptance for change, Walker said in his testimony.
``The American people must understand why change is necessary, what the reforms are, why they are needed, how they are to be implemented and how they will affect their own retirement income,'' he said.
Stand by for the greedy socialists at AARP to make sure they get theirs, at the expense of their children, grandchildren and great-grandchildren. There is nothing as mean spirited and vindictive as an old person who thinks their Social Security and Medi-care is in jeopardy. Never mind that today's oldsters will collect far more from Social Security than they ever put in, while the rest of us will never come close to getting back what we put in. Thank you FDR, for your bankrupting Ponzi scheme. But hey, it helped him get reelected. Who cares what happens in the future. Typical Rat indifference.
GIMME GIMME GIMME!! I'M OLD!
Wrong! Wrong! Wrong! The SS Trust Fund is in a lockbox zealously guarded by albore.
As a "bleeding edge" baby boomer (yeah, I'm an old fart!!), I'll believe it when the guvament check clears the bank.
Maybe that's why W gave big budget increases to the SEC and the IRS.
Not yet, eh?
Private retirement accounts, but the current GOP leaders can't seem to do anything except make the cost of government grow even faster.
I would even go beyond that. Let me out of the system now, I'll sign anything that says I won't collect and Congress won't create a future system will ever be imposed upon my assets or income. Keep what Congress has taken to date.
That won't happen however. So I'm likely going to relocate my business offshore, and use the tax savings for funding conservative efforts.
This threat has been on the radar pretty much the same year the 401k laws were passed. How it works is that there is a penalty on early withdrawals, so the "One Time Charge To Save Social Security and Union Pensions" will be slightly smaller percent than the hickey for early withdrawal.
I think that we are OK for now since most people are really upset that their 401ks are so ravaged by the dot bomb lootings. Let's say that "W" wins another term and the GOP finally picks up enough senate seats to actually pass meaningfull legislation. The economy returns its normal growth and all is well. Don't worry then. It won't happen because the media will constantly remind us how awful things are so that we will vote for Hillary in 2008.
When 2008 occurs, and the Clintons return to office (perhaps Bill has made his citzenship switch to Ireland by then and is ready to take a seat as the UN's General Secretary) then the media will be announcing the Third Reich is finally here, a thousand years of peace and prosperity - then when we all feel good, they will say "It is all well except for the Babyboom generation who through their greed is taking SS checks and have this massive 401k plan keeping them well." So the call goes out to loot the 401ks and save Social Security for all time - and there probably might be "means testing" and "color of skin testing" and "age testing" and God only knows what else.
Bottom line. Either do the wise thing, pay the taxes now (since taxes rarely go down) and put your money in a Cayman account. From there you can invest in anything. Actually some of the best investments are not available to US citizens (tax reasons). Either that, or plan to have your accounts sacked and ravaged around 2010, or as late as in Hitlary's second term. (AKA the last American president)
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