Posted on 02/09/2005 12:16:50 PM PST by NormsRevenge
WASHINGTON (Reuters) - The U.S. retirement system does not need a major overhaul or private accounts and can be stabilized through a series of smaller fixes, the nation's largest lobby group for the elderly said on Wednesday.
The AARP, formerly known as the American Association for Retired Persons, said the amount of wages that can be taxed for Social Security (news - web sites) should be raised from $90,000 to $140,000. The change could be phased in over about 10 years and would cut the projected shortfall by 43 percent.
The government should also diversify investments for the fund that pays out the benefit to include a total market index fund that would yield a higher return, according to the group. That could reduce the shortfall by about 15 percent.
"Social Security does not need a radical overhaul," AARP Chief Executive Officer William Novelli said in remarks prepared for a National Press Club speech. "Reasonable steps such as these, including possibly adjusting benefits, are enough to strengthen Social Security for the long term."
President Bush (news - web sites) has called for a broad overhaul of the 70-year-old Social Security program, and has made adding private retirement accounts to the system his top domestic priority.
Bush has argued the program is headed into a financial crisis, a characterization Democrats, and some of Bush's fellow Republicans, say exaggerates the problem.
AARP and others, including Democrats and some Republicans, oppose such privatization as too risky.
"Taking money out of Social Security payroll taxes for private investment accounts would worsen the solvency outlook rather than improve it, and could lead to large benefit cuts," Novelli said.
Improvements should also be made to other private retirement accounts, including 401(k) and individual retirement accounts or IRAs, but such savings are needed in addition to Social Security, not instead of the program, he said.
Novelli also called for a series of changes to bolster Medicaid, the jointly funded federal and state health insurance program for the poor.
Health and Human Services (news - web sites) Secretary Mike Leavitt has called the program, which serves about 52 million Americans, inefficient. The Bush administration's budget request released on Monday called for a slowdown in Medicaid spending of $45 billion over 10 years.
Novelli agreed with some of the administrations plans to reduce costs, including buying prescription medicines more cheaply and allowing patients to receive home care instead of more costly care in nursing homes.
Focusing on preventive care would also keep people healthier and save money, he said.
Some proposals have suggested capping the amount of federal money for Medicaid or turning part of the program into a block grant system, both of which the AARP opposes.
AARP has no credibility with me.
Smaller contributions could fix AARP.
Baghdad Bob is an AARP member or he works for them, at least. Who'da thunk?
I hope Social Security just goes away.
I won't see a red cent of it and I don't want to pay into it anymore.
IOW, let's half-@$$ do the job.
younger people would see it - after years of contributions with negative rates of return. the AARP doesn't understand that this is what they are advocating their FUTURE members get out of the system.
yeah...
ahh well...this is one of those issues that makes my head spin.
I eamiled AARP that I was looking for an alternative & I got this lengthy rambling email back re/small fixes for SS and that SS was NOT going broke! Un-huh! I just read an article that Art Linkletter wrote that AARP most liberal group going! I sent back their email reply I was still lookin for an alternative to AARP & will not renew our membership!
the fix is to stop shoveling money out the door right now...with today's retirees.....
today's retirees are getting a bonanza and are living off the backs of young and middle aged people who will see little to nothing for their years of tole....
since people are living longer....there is a number of people that have contributed little to nothing into SS....there are illegals and new immigrants that do not deserve to come into this country and immediately gather in the benefits....
then there are the people with the multiple govt pensions.....
yet, all the big shots can suggest....again....is to tax more people and bring in more money....
don't even get me started on Medicare...
I have always read that the elderly are the richest group in the country, so why is that the young and the middle class have to keep giving more and more to them.....
If you just want hotel and other discounts, look into AAA. You don't even have to be older. You also get travel insurance, towing included. I am a member and I am years away from AARP and plan to never join.
well of course, it won't "go broke" if they find new ways to raise taxes and pump more cash into it. the younger people who contribute are the ones "going broke" - a lifetime of work under the tax burden, with a rate of return at retirement that is running around 1% now and will go lower in the out years, and no ability to use the proceeds as part of their estate - giving their heirs the ability for wealth creation.
We could also avoid the crisis if we charged a "minimum tax" on currently tax-exempt advocacy groups like the AARP, ACLU, Sierra Club, PETA, etc. etc...
Glad somebody else caught that.
The least I could do.
I figure that the idea that they want to raise the tax on high earners will probably work out that they get to make up for the 10 trillion they already paid as baby boomers that was spent on other things. Now just at the end of their working days they get socked again.
"Aw, Hell NO!!!"
Or instead of raising taxes on two $50,000 wage-earners in a marriage for this SS "fix", we could cut the amount given to every SS recipient by 25%. The average SS recipient gets everything back that they've paid in in about 3.3 years and the rest is gravy. That should be drastically reduced. Let's see if the AARP would consider that proposal.
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