Tactical shift weighed for Social Security. Senate GOP may drop portion of Bush plan

Boston Globe ^ | April 9, 2005 | David Espo

[FairOpinion]

Senate Republicans are considering temporarily sidetracking President Bush's plan for personal investment accounts under Social Security, hoping Democrats will then join compromise talks on legislation to restore the program's solvency.

Several GOP officials said Republican leaders discussed the possibility privately this week, recognizing that unified Democratic opposition to the accounts has stalled efforts to advance Bush's top domestic priority.

At the same time, these officials said GOP leaders were wary of leaving the impression that they intend to abandon the president's proposal to allow younger workers to invest a portion of their payroll taxes independently.

Any shift in tactics has the potential to embolden Democratic critics who say Bush's proposal would privatize Social Security and lead to benefit cuts and a large increase in the national debt.

At the same time, it could undercut the current 60-day campaign by the White House to build public support for the president's approach.

[FairOpinion]

For the Republicans to even consider this, is emboldening the Dems. The Republicans are giving up the cornerstone of the Social Security Reform, caving in to the Dems, before negotiations even started. They should be going to the people, and help Bush fix Social Security once and for all.

[FairOpinion]

They should listed to Newt.

EXCLUSIVE from NEWT GINGRICH: Personal Accounts, Period

http://www.freerepublic.com/focus/f-news/1380345/posts


The problem with the message coming from Washington is that all the proposed "solutions" to fix Social Security solve Washington's problems not the workers'. The focus needs to be on solving the workers' problem, which is that Social Security pays too little, not too much.

The truth is that not only have all Social Security surpluses to date been spent on other things, the politicians in Washington want to go right along spending all future surpluses.

Raising taxes, as even some Republicans have proposed, will provide Washington only more money to spend. Since not one dime to date has been set aside to protect Social Security, why would anyone think that would ever happen in the future? Raising taxes would only mask the problem, allowing Washington to continue to raid the surpluses and leave Social Security even worse off.

Personal accounts owned by workers with higher benefits is the only way to ensure that money meant for retirement will not be spent. With large personal accounts, even low- and moderate-income workers will accumulate hundreds of thousands of dollars by retirement and will be able to leave a financial legacy to their children or other heirs. Personal accounts offer workers far greater personal choice, ownership and control than the current system.

[Bernard]

So if private investments are removed, where's the reform?

[livius]

Agreed. The private investment plan is probably the most important part of it, and giving it up without even a fight is a real disaster. The Dems, of course, have already been running regular scare ads about "privatizing Social Security," "destroying SS," etc., so they've already gone to the people. Unfortunately the GOP has let the Dems seize the issue and define it on their terms.

[federal]

I'd rather have social security become insolvent, actually.

I agree let it collapse so the dimocrats can explain to the American people how there isn't really a problem.

[Don Corleone]

hoping Democrats will then join compromise talks

The Republicans do not know how to RULE/LEAD. They could have a 99 percent majority and still cave in. Socialism and Insolvency here we come!

[CzarNicky]

I'd rather social insecurity collapse than give up the private accounts.

[savedbygrace]

Espo's not kidding anybody - this was actually written by the DNC.

[Dubya]

bump for later

[FairOpinion]

I don't know why Republicans aren't telling people about historical evidence of the success of personal account, like in Chile.

CHILE RETIREMENT ACCOUNTS On Social Security and Pension Reform: Lessons from Other Countries

http://www.freerepublic.com/focus/f-news/1334960/posts


Social Security Reform - Wish we could have it as good as Chile

http://www.freerepublic.com/focus/f-news/1328500/posts

Retiring in Chile (Social Security reform)

http://www.freerepublic.com/focus/f-news/1291725/posts


In Britain and Chile, lessons for revamping Social Security (success with private accounts)

http://www.freerepublic.com/focus/f-news/1362251/posts

[baystaterebel]

I agree. If individual private accounts are dropped, blow the whole thing up. If you are under 40 and have access to a 401K and other resources and are not using them you deserve to live in a box under a bridge when you retire.

I will gladly let them keep what they have taken from me so far as long as they stay out of my pocket from now on.
You don't have to be a genius to set up you own retirement account. Nor does it have to be risky. All it takes is a bit of knowledge and some diligence.

[xzins]

If they drop personal accounts, then they've simply gone back to the old formula of tweaking what's already there: raise taxes, reduce benefits, increase retirement age, etc.

Of those, I'm most in favor of increasing retirement age. The original plan called for social security to be available in the waning years of life after a person could no longer provide for himself/herself.

It was not designed to be a program so mom & pop could travel off to Florida and live in the sun for a couple of decades.

I'd increase the retirement age to about 70-72.

Then, I'd add new legislation allowing IRA's with full income exclusion up to an amount that would enable a person saving for 30-40 years to set aside X number of dollars that would provide a personal annuity equal to at least the minimum non-poverty level.

(What I'd really prefer is the NRST...I'm assuming above that the present tax system continues.)

[FairOpinion]

If you keep increasing retirement age, then Social Security is merely another tax, because very few people will actually live to collect it.

Whent it was introduced, life expectance was 65, people just didn't catch on to the scheme.

As people are living longer, they actually collect, which demonstrates that it's nothing but a Ponzi scheme.

[Trajan88]

I cannot figure why anyone under 40 would not want private accounts... it boggles the mind.

Anyway, I'm contributing 20% pre-tax salary to 401(k) and maxing out a Roth IRA. I heard that in 2006 a Roth 401(k) will be available if employers offer... I'll be the first to sign up.

If no private SS accounts, then you democrats can crash and burn.

Trajan88

[Racehorse]

As people are living longer, they actually collect, which demonstrates that it's nothing but a Ponzi scheme.

If people actually collect, and we do, it would seem SS is a working Ponzi scheme.  Reform aims to avoid problems which show up after . . . how many years of people actually collecting? 

[FairOpinion]

People really only started to collect any significant amounts only recently.

As I pointed out, initially people paid into it, but very few people lived to collect.

The point is, that as soon as people started to collect, the system was becoming more and more overstressed -- it went from 16 people paying in for each person collecting, to 2-3 people paying in for each one that is collecting.

The Ponzi scheme works for a while too.

[tet68]

hoping Democrats will then join compromise talks on legislation

Yep, as GW's father learned much to his sorrow, there is
no compromise with the rats.

As my dear departed father used to say,

"Hope?
Son, why don't you crap in one hand and hope in the other,
and see which fills up first?"

Big mistake this!
Repubs are falling for the fake polls et al, the worst
thing you can do in a revolution is be timid and drift.

The Pubs better use the constitutional option and get
back in the saddle. Let the rats whine, we can worry about
them after the battle is won.

As G.Nasser once said, "A revolutionary government recognizes no legality." We can recognize legality
AFTER we consolidate our gains.
This isn't slow pitch softball. If the pubs fall for this, it will be the "shutting down government" smear all over again. Note to Repub leadership, "Lead or get out of the way!".

[Racehorse]

I cannot figure why anyone under 40 would not want private accounts... it boggles the mind.

Not really.

One of the objections to the present system is it discourages savings, because people look at SS as the bird in hand, and of course, there will always be time to get serious about retirement.  But, even without the SS safety net, you come against the problem where many young people would rather spend their money on present wants rather than future needs.

[FairOpinion]

I agree. The Dems demand that we give up the key part of SS reform, which will indeed reform it, BEFORE they even start to negotiate about the other parts, which mean nothing, after we gave up the one thing that can solve the problem.

I just can't believe the spinelessness of Republicans.

They should not be hiding in a corner, they should be out explaining to the people why Bush's plan is the right one.

Here is a great analysis by Investor's Business Daily.


=====


Preserve The Personal Accounts

http://www.investors.com/editorial/issues01.asp?v=4/9


Talk of a "deal" to solve this leaves us wondering if a big tax increase is in the works, coupled with major benefit cuts.

The real problem here is that GOP members of Congress — especially in the Senate — have kept Social Security reform at arm's length, treating it like a pet skunk yet to be de-scented.

They fear the political consequences of acting boldly to pass reform — that is, actually showing some leadership — when polls seem to show many Americans oppose it. And they've expended precious little political capital to sell the idea.

Bush's plan is doomed too — but only if Republicans walk away from personal accounts. They're the key.

Personal accounts will deliver higher returns to young workers who, without reform, now face both higher taxes and negative returns. (The average 25-year-old today gets a pathetic -0.82% return on his Social Security taxes, a rotten investment if ever there was one.)

The idea that Social Security can be fixed without taking care of the next generation is a cruel fantasy. With no reform, we'll see ever-higher spending on retirement benefits, gobbling up an ever-greater share of both GDP and the federal budget.