Posted on 03/07/2005 10:19:16 AM PST by crushkerry
We're not huge fans of Nebraska RINO, and 2008 Presidential Contender, Senator Chuck Hagel. However, he deserves credit for coming out with a proposal for Social Security reform that sounds, believe it or not, pretty conservative.
Surprisingly the proposal being offered by Hagel is fairly similar to the proposals outlined by President Bush. Hagel's plan recognizes the populace's longer life expectancy and would raise the retirement age to 68, and would raise the retirement age to 68, and reduce benefits for anyone retiring before that age.
More importantly, he is proposing that workers under 45 be permitted to divert up to 4% of their payroll taxes to personal accounts, but with the caveat that future benefits for those people would be reduced.
The only real difference with the President's proposals are that the age requirement for setting up personal accounts is lowered to 45, rather than 55. We don't know how the White House is going to respond to this, but it seems here that the GOP and conservatives have to "compromise" to get a bill, this would be the way to go, rather than to increase the income cap on payroll taxes, or silly "add-on" accounts. Again, this is just a first impression of the Hagel plan. I'm not an actuary who can tell you if lowering the age will do anything for the overall solvency of the system.
Politically this is smart because a good many people in the 45-55 age bracket are uncertain as to whether personal accounts would benefit them. In Hagel's plan those that are over 45 will have their fears allayed that social security won't "be there" for them. Yes, there are many in that age range who will be mad they can't get a personal account, but they may have to be sacrificed for getting personal accounts. Plus, the guess here is that there are more people in that age range leery of personal accounts than are in favor of them.
Hagel also does one better than the White House in making sure that people know his plan is "voluntary". The White House has the same idea in mind, but doesn't say it enough. Some people like the idea of personal accounts in general, but are, for a number of reasons, a bit leery of them because they think they have to open one up if reform becomes a reality. They need to be reassured that if they aren't comfortable with the idea, they can stick with the current system (bad as it is).
So let's give credit to Senator Hagel where it's due. Instead of a foolish compromise like an "add-on", or a tax increase like one floated by Lindsay Graham, Hagel seems to have actually staked out a reasonably conservative position on this issue, and deserves to be lauded for it.
Ping
The GOP is not smart enough to figure out the obvious solution to this problem, i.e. mandatory retirement accounts. Tell people they've gotta save say 5% of their income in a Roth-like IRA, so that if social security goes bust, they will have an alternative source of funds. Over time, the voters will figure out that these mandatory private accounts are a safer place to put their money than the social security trust fund, and they will demand that Congress divert more of their social security contributions to these mandatory accounts.
... appears to say content posted from a blog belongs in the Bloggers & Personal forum.
NO to raising the retirement age! If we don't stop that option now, we will never be able to retire.
It is easy for a Congressperson to work until they are 80 since they have tax-paid staffers to do everything for them. How about no pay raises for Congress until SS is secure?
Social Security is not meant to be a retirement plan.
If you were born on or after 1960, your retirement age has already been raised to 67. This is effectively a benefit cut. Also, anyone born on or after 1960 has already had their taxes doubled for their entire working life. Carter and Clinton both passed huge ss tax increases. So those of us born after 1960 have already had our benefits cut and our taxes hiked. Any new cuts should be only AND I MEAN ONLY on those born before 1960. Figure it out somehow. The oldsters are spending our money. Let us choose to put our money in personal savings accounts, and no one from here on out should be getting any ss money unless they have the same rules that we have, retroactive taxes due and reduced benefits to reflect increased retirement age. Finally, consider this, without personal accounts, every few years congress inches up our retirement age and raises taxes to "fix" social security. By the time we get to be 65, retirement age will be 75 and we will be paying 50% of our income to social security.
I am aware of that, thank you.
It won't be exactly what the President suggested, but it still falls within his basic parameters. Win-win, if this means actually getting reform through. Once the idea is firmly planted and is "in production", changing it to be a more aggressive replacement is much easier. Getting that "foot in the door", so to speak, is the harder and more important part.
They ought to eliminate the partial benefit available at 62. Virtually everyone is taking SS at 62.
Yeah, but if we don't raise the retirement age the system will go bankrupt. People are living so long that, on aveage, they are more than getting back from SS than they put in, even if you add interest to what they put in.
When SS was formed the retirement age was 2 years OVER the life expectancy. Now, it's about 12 years UNDER the life expectancy. I'm not saying we should raise it to 80 or anythng, but to complain about a 1 year increase is ridiculous.
The last time the retirement age was raised was in 1983. You don't think it's about time, 22 years later, to do it again, given how much longer people are living?
I think that they should allow younger people to have the employer's contribution go directly into a private account for that person. That would be 6% right there and the worker and employer would not even see a big difference other than the growth in the person's assets.
Most people who have been collecting took out far far far more than they ever put in. A system like that does not work and is doomed.
Dear chris1,
"That would be 6% right there and the worker and employer would not even see a big difference other than the growth in the person's assets."
Ah, but then the problem is that the $160 billion per year that the Treasury is borrowing from Social Security to spend on current government programs would no longer be available. Then our congresscritters would either have to: 1) raise taxes a bunch; 2) actually cut spending a pretty fair amount; or 3) admit that the real budget deficit is about $160 billion higher than what we've been told it is; and 4) have to go borrow that money from someone that isn't a captive audience.
Tough sell. At least to congresscritters.
sitetest
What a bunch of thieves.
I am so sick of these pols, of both parties who refuse to be honest about the problems we face.
Dear chris1,
I don't really view the folks in Congress right now as the thieves. Most of them have been there a relatively short period of time (i.e., under three decades). They're just being left holding the bag by the folks who came before them.
The problems in Social Security could have been solved with little pain, say, back in the 1970s. Privatization back then could have been accomplished with much less pain and dislocation.
By this point, there is no easy way out. There is no plan that will avoid real pain. There is no plan that can avoid the trainwreck that's coming.
At this point, our president's plan will slow the down the speed associated with the trainwreck, and thus, will make it largely survivable, hurting a few folks a lot, a lot of folks a little, and laying down the foundation for a future where folks won't be hurt at all.
But it's tough to blame the congresscritters because they don't have large appetites for pain.
sitetest
An election comes up, and suddenly Hagel turns reasonable. LOL
They are right in giving him credit. I am loathe to praise him for anything but this is the first reasonable plan put out by a Senator. Similiar to the President's proposal critiqued in a way that might see more movement in the Senate. That is if the Rep Senators will get onboard instead of cowering in the background.
Social Security is not meant to be a retirement plan.
Like most pyramid schemes SS is meant to benefit the administrators (politicians) not the participants...imagine paying into SS for 45 years as a single person, dying at 66 and getting only a death benefit of a few hundred sollars...it should be a crime...
It is the biggest scam I could imagine. Imagine an employee putting away 12% of his/her income into his/her own account over 40 years how much would be in there???? At least million or more.
SS is nothing but a present tax to provide welfare payments later in life, if you make it.
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.