Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

GAO: Young Americans to Face Tax Hikes for SSA
Associated Press ^ | 07-28-03

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.


TOPICS: Business/Economy; Front Page News; Government
KEYWORDS: congress; socialsecurity
Navigation: use the links below to view more comments.
first 1-2021-24 next last

1 posted on 7/29/2003, 1:48:53 AM by Brian S
[ Post Reply | Private Reply | View Replies]

To: *Social Security
http://www.freerepublic.com/perl/bump-list
2 posted on 7/29/2003, 2:06:32 AM by Libertarianize the GOP (Ideas have consequences)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Brian S
Im still trying to figure out where all the money is coming from for local AIDS foreign AIDS
all the trillions spent on Homieland Deefense and a host of programs pork and etc etc
While you may not have to raise taxes today...you will certainly have to extend the paybacks out for ten-twenty generations to see the debt paid off
Wont you?
3 posted on 7/29/2003, 2:07:55 AM by joesnuffy (Moderate Islam Is For Dilettantes)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Brian S
``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.''

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.

4 posted on 7/29/2003, 2:13:21 AM by AlaskaErik
[ Post Reply | Private Reply | To 1 | View Replies]

To: AlaskaErik

GIMME GIMME GIMME!! I'M OLD!

5 posted on 7/29/2003, 2:16:22 AM by KantianBurke (The Federal govt should be protecting us from terrorists, not handing out goodies)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Brian S
Now where did I put that lock box?
6 posted on 7/29/2003, 2:20:26 AM by Moonman62
[ Post Reply | Private Reply | To 1 | View Replies]

To: Brian S
Social Security faces a $3.8 trillion deficit during the next 75 years.

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.

7 posted on 7/29/2003, 2:20:52 AM by upchuck (Contribute to "Republicans for Al Sharpton for President in 2004." Dial 1-800-SLAPTHADONKEY :)
[ Post Reply | Private Reply | To 1 | View Replies]

To: joesnuffy
Im still trying to figure out where all the money is coming from for local AIDS foreign AIDS all the trillions spent on Homieland Deefense and a host of programs pork and etc etc

Maybe that's why W gave big budget increases to the SEC and the IRS.

8 posted on 7/29/2003, 2:22:37 AM by Moonman62
[ Post Reply | Private Reply | To 3 | View Replies]

To: AlaskaErik
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.



What has our GOP leadership done about this?
9 posted on 7/29/2003, 2:24:54 AM by WhiteGuy (Deficit $455,000,000,000 + MY VOTE IS FOR SALE)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Brian S
Have you heard the one about the demagogue who rallied the poor working youth against the retired fat cats who steal the majority of their earnings?

Not yet, eh?

10 posted on 7/29/2003, 2:27:09 AM by Uncle Miltie ("Leave Pat, Leave!")
[ Post Reply | Private Reply | To 1 | View Replies]

To: WhiteGuy
What has our GOP leadership done about this?

Private retirement accounts, but the current GOP leaders can't seem to do anything except make the cost of government grow even faster.

11 posted on 7/29/2003, 2:28:20 AM by Moonman62
[ Post Reply | Private Reply | To 9 | View Replies]

To: Moonman62
Unless they liberate the productive taxpayers of the US..............

Our elected officials have failed........
12 posted on 7/29/2003, 2:34:33 AM by WhiteGuy (Deficit $455,000,000,000 + MY VOTE IS FOR SALE)
[ Post Reply | Private Reply | To 11 | View Replies]

To: Brian S
As a member of the baby boom, I have long ago dismissed any possibility of collecting more than a few bucks from all my Social Security taxes. I figure if when I qualify for benefits, currently at age 67, I'll get enough for about a 6-pack of cheap beer per month if it's on sale.
13 posted on 7/29/2003, 2:53:49 AM by The Great RJ
[ Post Reply | Private Reply | To 1 | View Replies]

To: Brian S
Let's not forget our dear illegal aliens who will be also put on the SSA dole by George "W" Bush.

The pincers are closing. As the government keeps actively seeking new and innovative ways to bankrupt the dwindling number of Producers and provide endless bounty to the expanding rolls of Takers, while simultaneously ensuring that the US workforce will be on par with slave labor in China both in education and in pay, we will beg for globalization - and that is what we are going to get.

Eat, Drink and be Merry! Then do like those in Zimbabwe do, loot from the the retired wealthy and kill those who resist.
14 posted on 7/29/2003, 4:07:57 AM by Dr Warmoose
[ Post Reply | Private Reply | To 1 | View Replies]

To: Brian S
Private retirement accounts already. Younger Americans like myself are willing to pay more so long as not's part of a failing government program bound to go bankrupt. Bush campaigned on SS reform and won; so did two GOP senators in 2002. Thune ran away from it and lost. It's a winning political issue, but does need to be communicated carefully. An important issue for a lot of young Republicans and hopefully, Bush will take action on this shortly after his re-election.
15 posted on 7/29/2003, 7:10:04 AM by jagrmeister
[ Post Reply | Private Reply | To 1 | View Replies]

To: jagrmeister
Younger Americans like myself are willing to pay more so long as not's part of a failing government program bound to go bankrupt.

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.

16 posted on 7/29/2003, 12:43:34 PM by tyen
[ Post Reply | Private Reply | To 15 | View Replies]

To: Dr Warmoose
Eat, Drink and be Merry! Then do like those in Zimbabwe do, loot from the the retired wealthy and kill those who resist.

This old coot will take a Corporals Guard to hell with him.


17 posted on 7/29/2003, 12:57:57 PM by Kozak (" No mans life liberty or property is safe when the legislature is in session." Mark Twain)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Dr Warmoose
My biggest fear is all the money we are socking away in our 401k's and IRA's will prove too big a temptation for the politicians. Already they have floated trial balloons of "one time" taxes on those to "invest in our cities or children". Like flies to Sh#t.
18 posted on 7/29/2003, 1:00:49 PM by Kozak (" No mans life liberty or property is safe when the legislature is in session." Mark Twain)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Brian S
If you go back a couple of months you'll find a Business Week article on 401ks and IRAs being a source of new tax revenue. Seems as people cash in their retirement funds they will be paying tax on those funds. The new tax revenue is expected to equal the expected cost of Social Security in the near future.

In other word the tax deferred of yesterday is the taxed in the future. So relax
19 posted on 7/29/2003, 1:09:38 PM by FlatLandBeer
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kozak
My biggest fear is all the money we are socking away in our 401k's and IRA's will prove too big a temptation for the politicians.

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)

20 posted on 7/29/2003, 2:54:46 PM by Dr Warmoose
[ Post Reply | Private Reply | To 18 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-24 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson