Social Security Reform

An outfit called ProtectYourCheck.org has bought airtime on Fox News recently. Their website says they are:

…a non-profit advocacy organization established to oppose the White House’s effort to dismantle Social Security, the most successful retirement and anti-poverty program in our nation’s history. ProtectYourCheck.org will educate Americans on the financial health of Social Security, promote policies to strengthen Social Security and encourage citizens to speak out about this issue to ensure that Congress doesn’t pass legislation that weakens the Social Security Trust Fund.

They state that if private accounts are allowed benefits will be slashed by 45% and if the stock market tanks, then “Whoah”. ProtectYourCheck.org wants you to contact your senators and representatives to vote against personal accounts because

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Social Security. It’s a guarantee you earned. Don’t let them make it a gamble.

I recently received my Social Security Statement in the mail (everyone should receive one a couple of months before their birthday).

ProtectYourCheck’s ad states Social Security is a guarantee that you’ve earned. My Statement has this part:

It says:

Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so any time. The law governing benefit amounts may change because, by 2042, the payroll taxes collected will be enough to pay only about 73 percent of scheduled benefits.

My youngest child will be 18 years old in 2018. I will be 62 in 2024. Under the current structure, if I die anytime between 2018 and 2024 we lose everything that I have “contributed” to social security, except for the special one time death benefit of $255 that my spouse or child may be eligible for. If I die before 2018, my youngest is eligible for payments only until he’s 18. If I die after 2024, I get payments until I die then my spouse gets nothing from my contributions. He will continue to receive payments from his own account, but mine’s gone (his payment will be larger than mine will be).

Personally, I would far prefer to put some of my contributions into a personal account. ProtectYourCheck.org warns that if the stock market tanks, “Whoah”. Except that your voluntary contributions would be put into a mutual fund similar to the Thrift Savings Plan fund choices that are available to your elected representatives! You would think that if it’s good enough for them it would be good enough for their constituents.

I agree with President Bush’s suggestion that lower wage earners have a faster track to increases in payments (indexing on wages). The lower wage earners are either at jobs that don’t offer a 401(k) or equivalent, or if they do, the lower wage earner needs every cent to pay the bills and can’t afford to save for retirement. Personal accounts would allow the lower wage earner the opportunity to save on his/her own behalf for retirement. Higher wage earners benefits being indexed on inflation also makes sense. These workers have access to additional retirement savings plans. Where the cut-offs are, of course, subject to negotiation.

The MSM and the Dems are playing this as a reduction in benefits. It’s not a reduction in benefits, it’s a reduction in the pace of increasing benefits for those who can afford a smaller increase while benefitting those who need the higher level of increases. Benefits that can be left to your children. Benefits that can be left to your spouse, even while your spouse is receiving benefits of his/her own.

Michelle Malkin’s Look Who’s Defending the Rich Now has a round up of lefty blog spin and a round up of the MSM anti-Bush headline spin The Roar of MSM Demagogues

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