Democrats Vow to Oppose Any Social Security Privatization, No Matter How Minor
More details are coming out concerning the Social Security plan being released today by the House Ways and Means Committee. The bill is significantly different from what the President has been proposing.
Instead, the measure showcases a promise, designed to reassure seniors, that Social Security surplus funds will be used only to create individual accounts that differ sharply from Bush's approach.
Despite the differences from Bush's proposals, Democrats quickly attacked the legislation, which is emerging in different forms in the House and Senate.
Sen. Max Baucus, D-Mont., called it "a smaller version of a bad idea. That bad idea is private accounts."
"They can twist themselves into any pretzel shape they want," said Sen. Chuck Schumer, D-N.Y. "As long as privatization is on the table, there will be no compromise on Social Security."
Whatever its prospects, officials said it was possible the leadership would embrace the measure in the House, elevating it in stature above other proposals.
Until the details of the plan are available to the general public, it’s difficult to critique the bill. Nevertheless, it seems that this is an extremely watered down plan that fails to create sustainable private accounts or address the issue of solvency.
It is also abundantly clear that the Democrats are going to blindly oppose any form of privatization, no matter how minor. Do they really believe that a program developed sixty years ago in a completely different economic and social environment needs no real reform? Is the current Social Security system to be regarded as some great, unalterable truth, perfect for all time?
The more I’ve thought and studied on this the more I’ve come to support strongly the idea of some form of privatization. While many details need to be hashed out, the concept is a solid one and much better geared for the modern economy than the system now in place. Unfortunately, the Democrats have declined to even consider it and have instead spent their energy marshalling a prideful resistance. Sometimes I wonder if the Democrats are more concerned with preserving a dying legacy than ensuring we focus on the needs of the future.
From all indications, the best we can hope for this year is some small and generally ineffective version of private accounts. If nothing else, perhaps this will get the ball rolling and make it easier for a future President and Congress to create a real solution.
posted by Alan Stewart Carl @ 3:34 PM
12 comments
12 Comments:
Actually there is a way to start a "private account" if you want one. It's called a IRA, you might want to check it out.
An IRA is on top of what I already have to pay for SS. In my 14 years of paying SS I've actually paid MORE into SS than I've been able to put in an IRA or 401k. Simply, paying SS makes it hard to save for retirement. Why can't I divert some of my SS into an IRA and agree to accept reduced or even no SS when I retire?
Social Security is an insurance policy, not an investment vehicle. As a seasoned (and sucessful) private investor I have to come to understand the neccessity of maintaining this important difference. Do not let the positive long term averages of return allow you to forget the fact that there have been significant blocks of time when equities returned losses in both short and mid-term time spans.
The lesson holds: Never invest money you are going to need in order to live.
Can't there be reform of Social Security that does'nt involve privitization?
Why do the wealthiest americans, who don't need SS anyway, get a break on the SS tax?
Would'nt privitization put SS money into the hands of rich people (investment bankers) who don't need it? (Greedy Bastards)
Anonymous #2 is just a plain old hippie. Wealth does not imply greed; just as being a hippie does not imply long hair and smelliness. SS money is money earned by the individual designed to be paid back to the individual in the future. All the while it's their money, let the working class have the money they earn.
To answer the question "Why do the wealthiest americans, who don't need SS anyway, get a break on the SS tax?"
The consider the fact that one "wealthy" person probably pays more SS tax than you, your family, and your friends combined. Is that fair?
"Sometimes I wonder if the Democrats are more concerned with preserving a dying legacy..."
They are. It's called America.
"...than ensuring we focus on the needs of the future."
They are looking towards the future. It's Republican policies that turn a blind eye and only look at the present.
flame on!
"Sometimes I wonder if the Democrats are more concerned with preserving a dying legacy..."
They are. It's called America.
"...than ensuring we focus on the needs of the future."
They are looking towards the future. It's Republican policies that turn a blind eye and only look at the present.
flame on!
EG--
I would say disability should be a separate issue than retirement payments when we're talking about reform.
And while raising the age and the cap could "fix" solvency for awhile it doesn't address my primary concern which is that I don't think the program, as designed, is what we need for the future. I think some form of privitization would be better for our future.
As for what my employer pays, I was actually considering employer contributions into the one 401k I've had. Ad for SS, I'm now self employed. I pay double in Social Security. It's called the Self Employment Tax. That's right, we penalize Americans who want to start their own businesses by making them pay 12% of their earnings into Social Security.
Ted,
Really, all I'm looking for is a way to move some of my SS payments into a privte account and I'm more than willing to accept decreased payments in retirement. People keep saying it's an insurance program, which is fair, but MAN is it an expensive insurance program. I'd like to buy a little less of that insurance.
That's why it irritates me that almost all the congressional democrats are dead-set against any kind of private account. I don't see why it would be so dangerous.
As for when the current system goes bankrupt, who knows?!? Too many people have played politics with the numbers.
And, as for the Brits, they offered some private accounts under Thatcher but I believe those accounts were government regulated (as in there were only a few choices) and they have performed poorly so far. Their system would be good to review because there is some public disatisfaction with the plan.
The biggest problem I see with privitization is the fact that it would encourage politicans to meddle in the market. If a high percentage of the population had these private accounts, and the market went down during an election year, I don't want to think about the kind of stunts some pols would pull in order to make it look like they are helping us out. I want the pols to stay out of it and let the market takes its ups and downs as needed.
That being said, I would like the see the Dems actually counter the plans being put out by the GOP instead of just saying "No" all the time. There are ways to try to fix SS that do not involve private accounts.
Ted, first let me say, your comments are great. Very thoughtful. I hope you keep coming back and keep commenting.
As for SS, baby steps are the best way to go. Our deficit is too large as it is. I don;t support any plan that would significantly increase an already horrible problem.
I wonder what happens when we stop bringing in more money that we're paying out? We've been addicted to that surplus for a long time. When it's gone, do we raise taxes elsewhere? Interesting to think about.
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