Posted on 02/03/2005 7:14:21 PM PST by kcvl
THE WHITE HOUSE Office of the Press Secretary (Great Falls, Montana)
____________________________________________________________________________________ For Immediate Release February 3, 2005
SETTING THE RECORD STRAIGHT Participants get 100% of Their Personal Retirement Accounts, Both Principal and Interest
Myth: Jonathan Weisman's Washington Post Story today (p A13), includes the headline that "Participants would Forfeit Part of Accounts' Profits," which is flat wrong. The article says workers who opt for personal accounts "would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system." This statement, unfortunately, is also flat wrong. Both the headline and this assertion are completely inaccurate. The White House is seeking a correction from the Washington Post.
Reality: Under President Bush's plan, participants would get EVERY SINGLE PENNY OF THEIR RETIREMENT ACCOUNTS -- BOTH the PRINCIPAL AND INTEREST.
Myth: The WP story suggests that President Bush's proposed personal retirement accounts actually benefits the Federal Government more than the account holder, by providing a "claw back." A "claw back" is typically a feature of a plan where the government guarantees a certain combined benefit from the traditional system and the personal account. Under such a plan, the better your account does, the less you get from the government. Therefore, the gains in the accounts are "clawed back."
Reality: The President's plan for personal retirement accounts does not have a "claw back." Under the President's plan, you, not the government, get all the gains in your personal retirement account. The amount you receive from the government is NOT reduced if your personal account does well. The better your account does, the better off you are.
Here are the facts:
Ø President Bush's plan allows you to make a decision to put your money in a different kind of prudent investment, with the potential for receiving higher pay-outs.
Ø For example, a worker who decides against taking a personal account might, in the future, get $15,000 annually in benefits from the traditional system, reformed to be permanently sustainable.
Ø Another young worker could choose to invest in a personal retirement account. In exchange for the right to get the account, he gives up benefits from the traditional system. For example, he might give up one-third of those future government benefits, and be entitled to receive $10,000 annually from the traditional system.
Ø A personal retirement account would belong entirely to the worker. If the account earns a 3% real rate of return - the worker would be right back where he started - at $15,000 of combined benefits per year.
Ø A worker could earn a higher return through his personal account investments. The Social Security Actuary assumes he will invest in a conservative mix of stocks, corporate bonds, and government securities that would result in a 4.6% real rate of return. In this case, the account would be large enough to provide about $7,000 per year of benefits, so he would have a combined future benefit of $17,000. His combined benefit would be $2,000 per year higher than had he not chosen the account.
Ø A worker's traditional benefit would be affected by the amount of investment in a personal account because some of his payroll taxes are flowing into the account, rather than into the traditional Social Security system. His government benefit would not, however, be affected by the investment performance of the personal account, as was suggested in today's Washington Post.
Ø Note that if he puts all of his account into safe government securities, he can expect an average 3% real rate of return (the break-even rate). In addition, the worker will own all the funds in the account. Even if the worker were only to break even financially, he would be better off because of his ownership rights:
o If he were to die before retirement age, he would have an asset to pass on to his loved ones.
o If he were to divorce, his account would be marital property.
o And if future policymakers were to change government-provided benefits, his account balance would be immune from those changes.
Remember:
Ø Personal retirement accounts help make Social Security better for younger workers. Personal retirement accounts give younger workers the chance to receive a higher rate of return from sound, long-term investing of a portion of their payroll taxes than they receive under the current system.
Ø Personal retirement accounts provide ownership and control. Personal retirement accounts give younger workers the opportunity to own an asset and watch it grow over time.
Ø Personal retirement accounts would be entirely voluntary. At any time, a worker could "opt in" by making a one-time election to put a portion of his or her payroll taxes into a personal retirement account.
o Workers would have the flexibility to choose from several different low-cost, broad-based investment funds and would have the opportunity to adjust investment allocations periodically, but would not be allowed to move back and forth between personal retirement accounts and the traditional system. If, after workers choose the account, they decide they want only the benefits the current system would give them, they can leave their money invested in government bonds like those the Social Security system invests in now.
o Those workers who do not elect to create a personal retirement account would continue to draw benefits from the traditional Social Security system, reformed to be permanently sustainable.
# # #
Ironic, a poor little kid just timidly knocked on the door trying to sell me on his new paper route. Bless his heart...trying to make a buck in a dying industry.
Their mantra of Bush "dismantling" and destroying the SS system is partly true.
If time could be fast-forwarded 70 years and everyone had their own private "SS" type savings account, retirees could stay in their homes and not downsize their lifestyle because they would have all the retirement money they need.
Imagine starting at 18 yrs old and having 15% of your earnings for 47 years earning interest.
That is what the liberals don't want.
How can they steal and siphon off the money if it doesn't go through the government filter?
The Social Security Fund is filled with IOU's. After the portion of the money coming in each month is sent to the recipients, the Government puts an IOU in for the surplus, and spends it.
I heard some Democrat make this claim on tv tonight and didn't know what he was talking about.
Michael Moore Prominently Displaying Bogus Washington Post Story on SS
E.D. on Fox and Friends this morning interviewed John Corizine, and he specifically stated that people will have to "pay back" the treasury, and mentioned this "claw back."
I wanted E.D. to ask him exactly what he meant.
It looks like the dems are back to bald face lying again!
Mark
Hmmm...two problems.
* "If he were to divorce, his account would be marital
property."
Okay, the real family movement (we who believe that fathers should be in families) says, "Seeya, seeya, wouldn't wanna be ya!" We'll go into political hiding and watch the big socialism show after 2008. What's the difference between creeping socialism and immediate socialism? Populations get too accustomed to creeping socialism, as ours has.
* "Personal retirement accounts provide ownership and
control."
That's wrong. I know a man who works for a developer (residential builder) and requested money from his retirement account to purchase vacant land to build his house on. His employer (the builder) said "No way--not unless you are buying from our industry (that is, a house that is already built, mortgage and all).
And as for Social Security, will we see the tax go away? If we see the tax go away, I'm all for it. If it goes for defense, that's alright with me. If we see it go into HHS stuff to appease the anti-family crowd, count me out.
No more incentives for divorce/cohabitation/"hooking up" or children reared by our government (government funded "day care," and all that)!
I, like a lot of people, used to love the morning paper with my coffee. Now I have my coffee with Free Republic while saving a tree from the Houston Comical. The enviros should love us.
This is what I'd like to see projected:
What's a conservative estimate of how many younger Americans would opt for the private accounts? And then how much money would Americans be putting into the broad stock market each year, at a 4% payroll rate?
And with that extra vast sum of capital flowing into our nation's publically traded companies, what new business expansion might result? How much new R&D? New products? New factories and production? How will that translate into new jobs? New industries? Increased wealth for average American workers/investors? What will those average workers spend their wealth on? What stuff will they buy? How will the workers of the companies that make that stuff then benefit from increased demand?
Just ask the Democrat party and leaders if they would be willing to apply the same laws on pensions (ERISA, etc.) and Securities laws on Social Security. Either you will send them off doing double speak, or they will flat out lie about the situation.
Thanks
marker
1966. I remember it well.
"Mah frenns -- and yew ARE mah frenns -- the gummint has these two pots. And, in this heah pot, the money is goin' out faster than it's comin' in. Thass what we call a dafficit!"But this udder pot, ovah heah, it's got mo' money comin' than is goin' out. Thass what we call a suhrPLUSSS!
"Now, if we put these two pots of money togethah, thar'd be as much comin' in as whut wuz goin' out. Thass what we call a bahllanced budgit!
"And, mah frenns, that iz whut we agonna do -- bahllance the budgit so's we can faht two wahrs at oncet. That wahr over thar in Viet Nam...and that wahr raht heah in the U.S. of A., The Wahr on Pahvitty. And we agonna win both o' them wahrs, mah frenns."
I knew, the instant I heard it, that we were in deep, deep doo-doo. I was only in my mid-twenties at the time...and I couldn't grasp why everybody didn't understand that the spending tap had been turned "ON" -- and was likely to stay there for a generation or two.
If you choose to invest not all in stocks when opting for private accounts, that is almost a guaranteed loser because bonds don't typically earn 3% over inflation. I oppose the President's plan as outlined, absolutely. It is a risky and nonsensical scheme.
"Raise the retirement age" should read..."We need more dead people"
These ghouls love performing economic abortions on our elder citizens. They are naturals at it. They have that sixth sense. They see dead people.
Look into the eyes of Nancy Pelosi, John Kerry and Hillary Clinton. Listen to them wail and howl in the days ahead as you rest your weary head on your pillow. If you make it to their "Promised Land" collect your pittance, but sleep with one eye open. If you should die before you wake, your money's theirs, the socialists to take.
bump for later reading
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