Posted on 12/13/2004 11:47:14 AM PST by SierraWasp
CEOs: Reform entitlements first
Business Roundtable says deficits pose threat
By William L. Watts, CBS.MarketWatch.com Last Update: 2:32 PM ET Dec. 13, 2004
WASHINGTON (CBS.MW) -- The White House and Congress should focus on reforming Social Security and other entitlement programs before looking at a broad overhaul of the tax code, a group representing the chief executives of America's largest corporations urged Monday.
"We are very concerned that unless action is begun now, future growth in spending -- especially in the three significant entitlement programs of Social Security, Medicare and Medicaid -- will overwhelm the federal budget and the economy," wrote Delphi Chief Executive J.T. Battenberg III, head of the Business Roundtable's fiscal policy task force, in a letter to President Bush.
In a position paper, the group didn't endorse any specific policy proposals to rein in entitlement spending.
Bush has vowed to press forward with his campaign pledge to allow many workers to divert some of their payroll taxes into private Social Security accounts, and has ruled out hiking payroll taxes or cutting benefits to fund transition costs, estimated to run as high as $2 trillion over the next decade.
Critics charge Bush, who has yet to offer a detailed plan, would have little choice other than to borrow much of that sum, exacerbating an already troubling fiscal picture and forcing interest rates higher. Proponents argue that the accounts would eventually allow the system to run a surplus, more than repaying the transition costs over several decades.
The president also intends to name a panel to come up with suggestions for reforming the tax code. He has vowed to make the tax system simpler, but appears unlikely to pursue a wholesale overhaul by attempting a leap toward a flat tax or national sales tax.
Political analysts largely expect Bush to focus on Social Security in the coming year. If so, that's fine with the Business Roundtable, which argued that entitlement reform was a bigger priority.
"Although tax reform is important, Business Roundtable believes that it should be subordinated to the pressing need to achieve reform of entitlement programs and balancing the budget by controlling the growth in spending," the group's position paper said. "Significant work will be required to design and reach agreement on these entitlement and spending reforms."
The group stressed that tax policy be guided by "maximizing the potential growth rate of the economy," and said that economic growth requires that "the U.S. tax system be competitive with the tax systems of our major trading partners around the world."
they got to start raising the age before the boomer start collecting (i.e. cause the ponzi schemes will get worse with the average boomer living into their 80s) ...
unfortunately, that will be the last thing the politicians will do.
The "SAIL" being the entitlement spending, that is...
They already raised it to age 67 for my son, but not for me. They did this back in 1983, I think.
Well, there goes almost 40 years of my "contributions" to my "account" down the tubes...
We're doomed.....
Oh Really???
How so???
Too cryptic for my shallow, politician in recovery, mind!!! Splain it to me and draw some pictures and cartoons, will ya???
Step 1: make Social Security witholding optional for everyone under 35.
Step 2: keep those who currently receive, or are about to receive, Social Security payments on the plan, with an option of following step 3.
Step 2: credit financial institutions with an amount in the rough neighborhood of the amount that future SS recipients have paid into the plan, with the goal being to create a viable retirement fund.
Voila, Social Security is over in 20 years with an instantly reduced budget that will grow relative to the reduced amount for the first few years, then steadily decrease until there are no more recipients.
Good luck with that one........
problem is that the average retiree today lives to 76-77 ... but gets all he/she paid in plus interest and interest by the time they are 70/71 ... i.e. it is actuarial out of balance ... if a private citizen would run a plan like that they would be in jail ... and if that continues during the baby boom generation ... our kids and grandkids generations are screwed (baby break even point may be say 74-75 ... but that generation will probably have the average boomer live 80+). It is simple actuarial science that the government does not want to face.
The Medicare program is in even worse shape (more of a ponzi scheme) ...
The simple reality of these programs are that people live much longer than the retirment ages when these programs were started (social security in 1935ish and Medicare in 1965ish) ... and people didn't pay much into the system. I believe FICA tax was originally .5% ... now it is 7.45% (which includes the medicare tax portion of 1.45%).
The age raise to 67 in the future won't help much at all (by the time it is implemented).
SOCIAL SECURITY (of socialist insecurity) was supposed to be an old age insurance program ... with this type of program you need to adjust the age constantly (every few years) to factor in life expectancy ... otherwise, the plan/program will/has become what it is ... a PONZI/PYRAMID scheme.
"Political analysts largely expect Bush to focus on Social Security in the coming year. "
Well, it's too bad that his first move was to give illegal aliens full SS benefits with 1/5 the time needed to pay in as American Citizens.
This will kill SS if nothing else has. And to expect the SSA to oversee this totalization agreement or any new reforms is absurd.
According to a GAO report in Sept. SSA paid over a billion dollars out in disability benefits to people not qualifed to receive them.
Totalization: Sellout of American Workers
by Phyllis Schlafly
Nov. 17, 2004
The Democrats are trying to make a campaign issue out of George W. Bush's alleged plan to "privatize" Social Security, scaring seniors into thinking their checks will be cut off. That is a phony issue; all Bush suggests is to offer younger workers the option (not the compulsion) of transferring a very small part of their Social Security benefit into private investments.
The real threat to Social Security doesn't come from giving young people this opportunity. The threat comes from the Bush Administration's plan to load illegal aliens into the Social Security system, an idea that would skyrocket costs and bankrupt the system at the same time that baby boomers flood into their benefit years.
The code word for this racket is "totalization." The United States has totalization agreements with 20 other countries, which have been reasonable and non-controversial, but totalization with Mexico is TOTALLY different.
The idea behind totalization with other countries is to assure a pension to those few individuals who work legally in two countries by "totalizing" their payments into the pension systems of both countries. All existing totalization agreements are with developed nations whose retirement benefits are on a parity with U.S. benefits, and the affected employees work for companies that have been paying taxes into the other countries' retirement systems.
Workers from the other 20 countries come with documents from their employer verifying that they are authorized to work in the United States. Only a minuscule fraction of Mexicans enter with such documents.
The legitimate goal of totalization with other countries is to avoid double taxation for retirement when employers assign their employees to work temporarily in another country. Reciprocity works because there is rough parity between the number of U.S. workers in the 20 other countries and the foreigners from those countries who work in the United States.
But this goal has no relevance to Mexico. There is no parity whatsoever between the number of Mexicans working in the United States and the number of U.S. citizens working in Mexico, and absolutely no parity in the social security systems of the two countries.
Mexican benefits are not remotely equal to U.S. benefits. Americans receive benefits after working for 10 years, but Mexicans have to work 24 years before receiving any benefits.
Mexican workers receive back in retirement only what they actually paid in, plus interest, whereas the U.S. Social Security system is skewed to give lower-wage earners benefits greatly in excess of what they and their employers contributed.
Mexico has two different retirement programs, one for public-sector employees, which is draining the national treasury, and one for private-sector workers, which is estimated to cover only 40 percent of the workforce. The rest of the workers are in the off-the-record economy (euphemistically called the "informal" sector).
The 10 million Mexicans who have illegally entered the United States previously lived in poverty, did not pay social security taxes in Mexico, and did not work for employers who paid taxes into a retirement plan. If they were working at all, it was in the off-the-record economy.
Illegality is no issue with the countries where we have existing totalization agreements because none of them accounts for even one percent of the U.S illegal population. On the other hand, Mexico provides more than two-thirds of the illegals in the United States.
The Bush totalization plan would pay out billions in Social Security benefits to Mexicans for work they did in the U.S. using fraudulent Social Security numbers, something that Americans would go to jail for doing. It would pay Social Security Disability benefits to Mexicans who worked in the United States as little as 3 years.
The Bush totalization plan would lure even more Mexicans into the United States illegally in the hope of amnesty and eligibility for Social Security benefits. The Bush plan would even cover the Mexicans' spouses and dependents who may never have lived in the United States.
Since few if any of the illegal aliens have built up any equity in the Mexican retirement system, what is there to totalize? Totalization is a plan for the U.S. taxpayers to end up assuming the entire burden.
When George W. Bush became President in 2001, the Mexican government expected the United States to pass amnesty (disguised as a guest worker plan and "regularizing" the entry of Mexicans). After 9/11, Mexico's national policy turned to increasing the number of its nationals working in the United States and getting them to qualify for all the social benefits and privileges Americans receive, from driver's licenses to Social Security and Social Security Disability.
The Social Security commissioners of both Mexico and the Bush Administration signed a totalization agreement in June of 2004, but the text of the agreement has been kept secret. Maybe we will be permitted to see it after the President approves it and sends it to Congress.
Let your Members of Congress know you want them to stop this billion-dollar sellout of American workers and taxpayers.
http://www.eagleforum.org/column/2004/nov04/04-11-17.html
****
Here's the opposition:
H. RES. 720
Expressing the disapproval of the House of Representatives of the Social Security totalization agreement between the United States and Mexico.
IN THE HOUSE OF REPRESENTATIVES
July 15, 2004
Mr. COLLINS (for himself, Mr. HAYWORTH, Mr. SAM JOHNSON of Texas, Mr. HOSTETTLER, Mr. GOODE, Mr. SULLIVAN, Mr. NORWOOD, Mr. DUNCAN, Mr. SMITH of Texas, Mr. ENGLISH, Mr. KING of Iowa, Mr. MILLER of Florida, Mrs. JO ANN DAVIS of Virginia, Mr. GALLEGLY, Mr. TANCREDO, Mr. JONES of North Carolina, Mr. DOOLITTLE, and Mr. ROYCE) submitted the following resolution; which was referred to the Committee on Ways and Means
There are too many damn people getting it because of a "disability."
I can't tell you how many 30 and 40 year olds I've heard calling in to talk shows and complaining about how they were turned down for benefits they deserve because they are disabled however they can sit on a couch, eat cheetos and watch Jerry Springer all day.
I'm so sick of it I could puke.
There are one million people on Social Security disability. It is very hard to get. I am one. How would you like to hear that as of Jan 1, my Medicare benefit includes a free membership in the Silver Sneakers Health Club with pool, saunas, etc.
does that mean reforming entitlements for ceo's too?
So you are a proud non-contributing member of society?
You thoughtfully responded to my post which tells me that there must be some way of financially supporting yourself without the government's help.
Social Security should only be for seniors after they reach their retirement age.
Not 25 year old former construction workers with minor back pain…
My wife has debilitating back pain from a car accident when she was a teenager. She deals with it and is finishing a Pharmacy degree. Some days are worse than others but she does the best she can. She asks for nothing from the government and loathes those that do.
I guess Steven Hawking should be eligible for Social Security too...
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