Social Security
Below is text from President Bush’s speech the other evening dealing with the Social Security issue. I haven’t changed the text, but I have changed the format to emphasis what I think are key or important items. The President’s words are in Italics; mine will be in plain text. Any bolded emphasis is mine.
Social Security worked fine during the last century, but the math has changed. A generation of baby boomers is getting ready to retire. I happen to be one of them. Today there are about 40 million retirees receiving benefits; by the time all the baby boomers have retired, there will be more than 72 million retirees drawing Social Security benefits. Baby boomers will be living longer and collecting benefits over long retirements than previous generations. And Congress has ensured that their benefits will rise faster than the rate of inflation.
In other words, there's a lot of us getting ready to retire who will be living longer and receiving greater benefits than the previous generation. And to compound the problem, there are fewer people paying into the system. In 1950, there were 16 workers for every beneficiary; today there are 3.3 workers for every beneficiary; soon there will be two workers for every beneficiary.
These changes have put Social Security on the path to bankruptcy. When the baby boomers start retiring in three years, Social Security will start heading toward the red. In 2017, the system will start paying out more in benefits than it collects in payroll taxes. Every year after that the shortfall will get worse, and by 2041, Social Security will be bankrupt.
Franklin Roosevelt did a wonderful thing when he created Social Security. The system has meant a lot for a lot of people. Social Security has provided a safety net that has provided dignity and peace of mind for millions of Americans in their retirement. Yet there's a hole in the safety net because Congresses have made promises it cannot keep for a younger generation. As we fix Social Security, some things won't change: Seniors and people with disabilities will get their checks; all Americans born before 1950 will receive the full benefits.
Our duty to save Social Security begins with making the system permanently solvent, but our duty does not end there. We also have a responsibility to improve Social Security, by directing extra help to those most in need and by making it a better deal for younger workers.
Now, as Congress begins work on legislation, we must be guided by three goals.
· First, millions of Americans depend on Social Security checks as a primary source of retirement income, so we must keep this promise to future retirees, as well. As a matter of fairness, I propose that future generations receive benefits equal to or greater than the benefits today's seniors get.
· Secondly, I believe a reform system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off. By providing more generous benefits for low-income retirees, we'll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire into poverty. This reform would solve most of the funding challenges facing Social Security. A variety of options are available to solve the rest of the problem, and I will work with Congress on any good-faith proposal that does not raise the payroll tax rate or harm our economy. I know we can find a solution to the financial problems of Social Security that is sensible, permanent, and fair.
· Third, any reform of Social Security must replace the empty promises being made to younger workers with real assets, real money. I believe the best way to achieve this goal is to give younger workers the option, the opportunity if they so choose, of putting a portion of their payroll taxes into a voluntary personal retirement account. Because this money is saved and invested, younger workers would have the opportunity to receive a higher rate of return on their money than the current Social Security system can provide.
The money from a voluntary personal retirement account would supplement the check one receives from Social Security. In a reformed Social Security system, voluntary personal retirement accounts would offer workers a number of investment options that are simple and easy to understand. I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of Treasury bonds, which are backed by the full faith and credit of the United States government.
Options like this will make voluntary personal retirement accounts a safer investment that will allow an American to build a nest egg that he or she can pass on to whomever he or she chooses. Americans who would choose not to save in a personal account would still be able to count on a Social Security check equal to or higher than the benefits of today's seniors.
In the coming days and weeks, I will work with both the House and the Senate as they take the next steps in the legislative process. I'm willing to listen to any good idea from either party. Too often, the temptation in Washington is to look at a major issue only in terms of whether it gives one political party an advantage over the other. Social Security is too important for "politics as usual." We have a shared responsibility to fix Social Security and make the system better; to keep seniors out of poverty and expand ownership for people of every background. And when we do, Republicans and Democrats will be able to stand together and take credit for doing what is right for our children and our grandchildren.
I don’t see what the problem is. I would think that both the Democrats and Republicans, liberals and conservatives alike would want to provide a retirement option for all Americans. FDR started the Social Security program in the 1930’s to help the elderly during the Depression. It grew to include the disabled and children under age 21 who were eligible to receive benefits based on their parents “contributions.” Noble reasons all. The ideal situation would be that the Federal government did not have to do this, that the American people would be able to meet their own retirement needs. However, that won’t happen. Americans as a rule have become too complacent to rely on themselves for their own needs and look to the Federal government as not Big Brother, but as Big Daddy. Big Daddy will be here to take care of me when I get old. I won’t have to make any decisions of my own. Surely, Big Daddy will do what’s right by me.
Well, Big Daddy hasn’t played fair. Since 1935 every American worker has had money taken from their paychecks to pay for current retirees (and others). We’ve been led to believe that the money we see on our pay stubs marked FICA is in an account with our names on it. And if we were to add up all the money we’ve “contributed” over our working lifetimes, that money would be sitting in an account with our names on it. It’s in a lockbox and no one has touched it. If you believe this, I’ve got waterfront property I want to talk to you about.
There is no lockbox. Your “account” consists of a computer program showing that when you retire, you are entitled to this amount of money. Note, it says nothing about how much money you’ve contributed, just how much money you will get. Unless Congress votes to change your “entitlement".
Oh, that vote? It’s Congress that votes to make changes. The President can submit a bill to Congress with all the provisions he wants, but it’s Congress that debates the bill, and then usually makes changes to it, and adds riders to it (that may or may not have anything to do with Social Security), and finally votes on the version of the bill presented to them. The President can then sign the bill into law or send it back. Congress would have you believe that the President is the one who decides what the final bill states. The President may agree to sign a bill that is considerably different than what he presented, but this is usually to get something passed into law.
Congress pays into Social Security just as we do. There was an email flying around the Internet for a couple of years saying otherwise. It’s probably still out there, but it’s false. There is a slight difference in Congress’ Social Security options that many people still don’t know about. Congress has an option to divert a portion of their Social Security “contributions” into what is called a Thrift Savings Account. Money put into this account is invested into the stock market, mutual funds, Treasure bonds, and perhaps other funds. It grows at a faster rate than money in their Social Security accounts do.
Now, what is wrong with this? Nothing, really, except that Congress apparently doesn’t want the average American to have this option; the same option that they enjoy. These TSA are no different from what President Bush calls Personal (or Private) Retirement Accounts. Why should Congress and Federal employees have an option that you and I can’t have? That is the question I want answered by Congress.
Congress is afraid of several things:
· That the American worker will realize that Congress has their fingers in the Social Security pie
· That Congress has been raiding this account for years.
· That the public will find out that there is no real money left in the account. All the money in the account is in the form of Treasury bonds
· That the public will realize that we are smart enough to take care of ourselves and we don’t need Big Daddy to take care of us after all.
Everyone seems to agree that Social Security needs to be fixed. There is a difference in how soon the fix needs to be done and the degree of the fix. I’m of the opinion that if we fix it now, it will be far less expensive than if we wait until it’s really collapsing. If anyone in Congress has a better idea than what President Bush has but forward, then announce it. Let’s have suggestions and ideas instead of hiding their heads in the sand and saying that there’s no problem, it’s not as bad as Bush says, or Bush doesn’t know what he’s talking about.
Let’s have solutions instead of obstruction. If Joe Sixpack and Jane Lunchbox figure this out, the gravy train will be over for many members of Congress. And they don’t know anything but being in Congress. They have no idea of what life is like in the real world.
God help us all.
Below is text from President Bush’s speech the other evening dealing with the Social Security issue. I haven’t changed the text, but I have changed the format to emphasis what I think are key or important items. The President’s words are in Italics; mine will be in plain text. Any bolded emphasis is mine.
Social Security worked fine during the last century, but the math has changed. A generation of baby boomers is getting ready to retire. I happen to be one of them. Today there are about 40 million retirees receiving benefits; by the time all the baby boomers have retired, there will be more than 72 million retirees drawing Social Security benefits. Baby boomers will be living longer and collecting benefits over long retirements than previous generations. And Congress has ensured that their benefits will rise faster than the rate of inflation.
In other words, there's a lot of us getting ready to retire who will be living longer and receiving greater benefits than the previous generation. And to compound the problem, there are fewer people paying into the system. In 1950, there were 16 workers for every beneficiary; today there are 3.3 workers for every beneficiary; soon there will be two workers for every beneficiary.
These changes have put Social Security on the path to bankruptcy. When the baby boomers start retiring in three years, Social Security will start heading toward the red. In 2017, the system will start paying out more in benefits than it collects in payroll taxes. Every year after that the shortfall will get worse, and by 2041, Social Security will be bankrupt.
Franklin Roosevelt did a wonderful thing when he created Social Security. The system has meant a lot for a lot of people. Social Security has provided a safety net that has provided dignity and peace of mind for millions of Americans in their retirement. Yet there's a hole in the safety net because Congresses have made promises it cannot keep for a younger generation. As we fix Social Security, some things won't change: Seniors and people with disabilities will get their checks; all Americans born before 1950 will receive the full benefits.
Our duty to save Social Security begins with making the system permanently solvent, but our duty does not end there. We also have a responsibility to improve Social Security, by directing extra help to those most in need and by making it a better deal for younger workers.
Now, as Congress begins work on legislation, we must be guided by three goals.
· First, millions of Americans depend on Social Security checks as a primary source of retirement income, so we must keep this promise to future retirees, as well. As a matter of fairness, I propose that future generations receive benefits equal to or greater than the benefits today's seniors get.
· Secondly, I believe a reform system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off. By providing more generous benefits for low-income retirees, we'll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire into poverty. This reform would solve most of the funding challenges facing Social Security. A variety of options are available to solve the rest of the problem, and I will work with Congress on any good-faith proposal that does not raise the payroll tax rate or harm our economy. I know we can find a solution to the financial problems of Social Security that is sensible, permanent, and fair.
· Third, any reform of Social Security must replace the empty promises being made to younger workers with real assets, real money. I believe the best way to achieve this goal is to give younger workers the option, the opportunity if they so choose, of putting a portion of their payroll taxes into a voluntary personal retirement account. Because this money is saved and invested, younger workers would have the opportunity to receive a higher rate of return on their money than the current Social Security system can provide.
The money from a voluntary personal retirement account would supplement the check one receives from Social Security. In a reformed Social Security system, voluntary personal retirement accounts would offer workers a number of investment options that are simple and easy to understand. I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of Treasury bonds, which are backed by the full faith and credit of the United States government.
Options like this will make voluntary personal retirement accounts a safer investment that will allow an American to build a nest egg that he or she can pass on to whomever he or she chooses. Americans who would choose not to save in a personal account would still be able to count on a Social Security check equal to or higher than the benefits of today's seniors.
In the coming days and weeks, I will work with both the House and the Senate as they take the next steps in the legislative process. I'm willing to listen to any good idea from either party. Too often, the temptation in Washington is to look at a major issue only in terms of whether it gives one political party an advantage over the other. Social Security is too important for "politics as usual." We have a shared responsibility to fix Social Security and make the system better; to keep seniors out of poverty and expand ownership for people of every background. And when we do, Republicans and Democrats will be able to stand together and take credit for doing what is right for our children and our grandchildren.
I don’t see what the problem is. I would think that both the Democrats and Republicans, liberals and conservatives alike would want to provide a retirement option for all Americans. FDR started the Social Security program in the 1930’s to help the elderly during the Depression. It grew to include the disabled and children under age 21 who were eligible to receive benefits based on their parents “contributions.” Noble reasons all. The ideal situation would be that the Federal government did not have to do this, that the American people would be able to meet their own retirement needs. However, that won’t happen. Americans as a rule have become too complacent to rely on themselves for their own needs and look to the Federal government as not Big Brother, but as Big Daddy. Big Daddy will be here to take care of me when I get old. I won’t have to make any decisions of my own. Surely, Big Daddy will do what’s right by me.
Well, Big Daddy hasn’t played fair. Since 1935 every American worker has had money taken from their paychecks to pay for current retirees (and others). We’ve been led to believe that the money we see on our pay stubs marked FICA is in an account with our names on it. And if we were to add up all the money we’ve “contributed” over our working lifetimes, that money would be sitting in an account with our names on it. It’s in a lockbox and no one has touched it. If you believe this, I’ve got waterfront property I want to talk to you about.
There is no lockbox. Your “account” consists of a computer program showing that when you retire, you are entitled to this amount of money. Note, it says nothing about how much money you’ve contributed, just how much money you will get. Unless Congress votes to change your “entitlement".
Oh, that vote? It’s Congress that votes to make changes. The President can submit a bill to Congress with all the provisions he wants, but it’s Congress that debates the bill, and then usually makes changes to it, and adds riders to it (that may or may not have anything to do with Social Security), and finally votes on the version of the bill presented to them. The President can then sign the bill into law or send it back. Congress would have you believe that the President is the one who decides what the final bill states. The President may agree to sign a bill that is considerably different than what he presented, but this is usually to get something passed into law.
Congress pays into Social Security just as we do. There was an email flying around the Internet for a couple of years saying otherwise. It’s probably still out there, but it’s false. There is a slight difference in Congress’ Social Security options that many people still don’t know about. Congress has an option to divert a portion of their Social Security “contributions” into what is called a Thrift Savings Account. Money put into this account is invested into the stock market, mutual funds, Treasure bonds, and perhaps other funds. It grows at a faster rate than money in their Social Security accounts do.
Now, what is wrong with this? Nothing, really, except that Congress apparently doesn’t want the average American to have this option; the same option that they enjoy. These TSA are no different from what President Bush calls Personal (or Private) Retirement Accounts. Why should Congress and Federal employees have an option that you and I can’t have? That is the question I want answered by Congress.
Congress is afraid of several things:
· That the American worker will realize that Congress has their fingers in the Social Security pie
· That Congress has been raiding this account for years.
· That the public will find out that there is no real money left in the account. All the money in the account is in the form of Treasury bonds
· That the public will realize that we are smart enough to take care of ourselves and we don’t need Big Daddy to take care of us after all.
Everyone seems to agree that Social Security needs to be fixed. There is a difference in how soon the fix needs to be done and the degree of the fix. I’m of the opinion that if we fix it now, it will be far less expensive than if we wait until it’s really collapsing. If anyone in Congress has a better idea than what President Bush has but forward, then announce it. Let’s have suggestions and ideas instead of hiding their heads in the sand and saying that there’s no problem, it’s not as bad as Bush says, or Bush doesn’t know what he’s talking about.
Let’s have solutions instead of obstruction. If Joe Sixpack and Jane Lunchbox figure this out, the gravy train will be over for many members of Congress. And they don’t know anything but being in Congress. They have no idea of what life is like in the real world.
God help us all.
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