Bush Social Security Plan NO Answer

Bush said Social Security is in trouble and the Social Security actuaries confirmed that if we do NOTHING, Social Security would have to cut benefits by 25% beginning in 2042.

--As have Democrats, believe me, if anyone starts to bash, there will be plenty of blame to go around....and many (on either side) who deserve it for doing nothing about it except sit around.

and of course this social security problem is all bushes fault right gene? Just suddeenly it fell apart in the last 4 years, before the last 4 years it was healthy and secure under the democraps right?

Where are those sources and facts again?

Island Dog

The source is the Chief Actuary of the Social Security Administration. His office has released the 2042 date and the 25% cut. That office provided the impact of the Bush plan. The Bush plan retains 100% benefits for people under $25,000 and then cuts start at 20% and go to 42% benefit cuts depending on your income. The point is the Bush plan does the same thing as doing nothing- a cut in benefits arround 25%. Thus Bush has no solution. Rep. Wexler is submitting a proposal that will add to the Trust Fund ( 6% tax on wages above $90,000 per year) and this moves toward a solution. I have not sceen any report to show if the Wexler plan solves the entire shortfall. Below is a report that sights the CBO: Basic Facts on Social Security and Proposed Benefit Cuts/Privatization Dean Baker and David Rosnick1 March 2005 1) Social Security is Financially Sound According to the Social Security trustees report, the standard basis for analyzing Social Security, the program can pay all benefits through the year 2042, with no changes whatsoever. Even after 2042 the program would always be able to pay retirees a higher benefit (in today's dollars) than what current retirees receive. The assessment of the non-partisan Congressional Budget Office is that Social Security is even stronger. It projects that Social Security can pay all benefits through the year 2052 with no changes whatsoever. By either measure, Social Security is more financially sound today than it has been throughout most of its 69-year history 2) President Bush's Social Security Cuts Would Be Large The proposal that President Bush is using as the basis for his plan phases in cuts over time. A worker who is 45 today can expect to see a cut in guaranteed benefits of around 15 percent. A worker who is age 35 can expect to see a cut in the guaranteed benefit of approximately 25 percent. A 15 year old who is just entering the work force can expect a benefit cut of close to 40 percent. For a 15 year old, this cut would mean a loss of close to $200,000 in Social Security benefits over the course of their retirement (see appendix). Private accounts will allow workers to earn back only a small fraction of this amount. For example, a 15 year-old can expect to make back approximately $9,000 from the $200,000 cut with the earnings on a private account. If this worker retires when the market is in a slump, then it could make their loss even bigger

Status of the Social Security and Medicare Programs
A SUMMARY OF THE 2005 ANNUAL REPORTS
Social Security and Medicare Boards of Trustees
A MESSAGE TO THE PUBLIC:

Each year the Trustees of the Social Security and Medicare trust funds report on the current status and projected condition of the funds over the next 75 years. This message summarizes the 2005 Annual Reports.

The fundamentals of the financial status of Social Security and Medicare remain problematic under the intermediate economic and demographic assumptions. Social Security's current annual cash surpluses will soon begin to decline and will be followed by deficits that begin to grow rapidly toward the end of the next decade as the baby boom generation retires. The Medicare Hospital Insurance (HI) Trust Fund that pays hospital benefits had negative cash flows in 2004 and annual cash flow deficits are expected to continue and to grow rapidly after 2010 as baby boomers begin to retire. The growing deficits in both programs will lead to exhaustion in trust fund reserves for HI in 2020 and for Social Security in 2041. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the new prescription drug benefit will require substantial increases over time in both general revenue financing and premium charges. As the reserves in Social Security and HI are drawn down and SMI general revenue financing requirements continue to grow, the pressure on the Federal budget will intensify. We do not believe the currently projected long run growth rates of Social Security and Medicare are sustainable under current financing arrangements.
Social Security

The annual cost of Social Security benefits represents 4.3 percent of Gross Domestic Product (GDP) today and is projected to rise to 6.4 percent of GDP in 2079. The projected 75-year actuarial deficit in the combined Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds is 1.92 percent of taxable payroll, up slightly from 1.89 percent in last year's report. The program continues to fail our long-range test of close actuarial balance by a wide margin. Projected OASDI tax income will begin to fall short of outlays in 2017 and will be sufficient to finance only 74 percent of scheduled annual benefits by 2041, when the combined OASDI trust fund is projected to be exhausted.

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 15 percent in the amount of payroll taxes or an immediate reduction in benefits of 13 percent (or some combination of the two). To the extent that changes are delayed or phased in gradually, greater adjustments in scheduled benefits and revenues would be required. Ensuring that the system is solvent on a sustainable basis over the next 75 years and beyond would also require larger changes.
Medicare

As we reported last year, Medicare's financial difficulties come sooner--and are much more severe--than those confronting Social Security. While both programs face essentially the same demographic challenge, underlying health care costs per enrollee are projected to rise faster than the wages per worker on which the payroll tax is paid and on which Social Security benefits are based. As a result, while Medicare's annual costs are currently 2.6 percent of GDP, or about 60 percent of Social Security's, they are now projected to surpass Social Security expenditures in 2024 and reach almost 14 percent of GDP in 2079.

The projected 75-year actuarial deficit in the Hospital Insurance (HI) Trust Fund is now 3.09 percent of taxable payroll, down slightly from 3.12 percent in last year's report due primarily to slightly greater income in 2004, and slightly lower costs, than estimated in last year's report. The fund again fails our test of short-range financial adequacy, as assets drop below the level of the next year's projected expenditures within 10 years--in 2014. The fund also continues to fail our long-range test of close actuarial balance by a wide margin. Though the projected date of HI Trust Fund exhaustion moved back slightly to 2020, from 2019 in last year's report, projected HI tax income falls short of outlays in this and all future years. HI could be brought into actuarial balance over the next 75 years by an immediate 107 percent increase in program income or an immediate 48 percent reduction in program outlays (or some combination of the two). However, as with Social Security, adjustments of far greater magnitude would be necessary to the extent changes are delayed or phased in gradually, or to make the program solvent on a sustainable basis over the next 75 years and beyond.

The above confirms the 25% cut if we do nothing and it also shows the problems with Medicare are far greater then any problems with Social Secuity!

I was intending the Democrats, BTW...and wow, never realized COL was trying to win a 'who has the most BS on one thread' race....

you use big words and numbers gene and totally come up with the solution that MAKES it look like this problem has just materialized in the last 4 years, once just once I would like to see you spead the blame out where it belongs, on both sides of the aisle.

I'm not trying to blame anyone. Bush is the one who is claiming there is a crisis with Social Security. The crisis he identified was the inability to meet its obligations in the future. He then turns around and makes recommendations to cut benefits the very same as if we ignore the problem . The reason Social Security is heading for a problem is because of the large number of children born after the second world war. It's not a matter of blaming Bush, Clinton , Carter or Reagan. It was a consequence of the war. The issue is how we can continue to pay the full benefits to this group of people. The recommendation that Rep. Wexler talking about is a real solution because it would provide additional funding to help pay the increased benefits of the baby boomers. What Bush is suggesting is to substitute his set of benefit cuts for the cuts that doing nothing will cause!

Reply #7 By: Citizen Moderateman - 5/16/2005 4:03:41 PM

--Mod, your actually being Mod..... J/K

--1] i doubt any one wants to pay more taxes.....

--2] Maybe we should send a team back in time and stop the baby boom generation (unfortunatley that would result in the grandfather paradox,which would lead to...................,well, it just hurts my head to think about where it would go.....

The choice is simple. We either CUT future benefits or PAY higher Social Security taxes. Americans need to choose!

cut benefits

--you say bush is suggesting this, and yet you bash it, but then you say:

Reply #10 By: COL Gene - 5/16/2005 4:59:43 PM The choice is simple. We either CUT future benefits or PAY higher Social Security taxes. Americans need to choose!

Bush is the one who said the problem with the social security is its inability to pay that benefits promised to future retirees. If the problem its inability to pay the promised benefits then Bush suggests cuts as a solution to the problem Bush identified in the first place? It should be cleared to the most simpleminded person, that either allow the benefit cuts to happen, which does not require any change in Social Security, or increase the amount of resources so that 100% of the promised benefits can be paid. But suggesting one set of cuts to prevent another set of cuts is not a solution it simply restating the same problem which is precisely what Bush has done.

I certainly favor increasing Social Security taxes so that future retirees can receive the promised benefits. If we to do that , millions of low and middle income Americans will suffer so the relatively small number of well-off Americans can live even higher on the HOG.

The recommendation that Rep. Wexler talking about is a real solution because it would provide additional funding to help pay the increased benefits of the baby boomers.

I agree with this part gene, but as usual a powerfull democrat Boxer, is putting the kabosh on this, sound fiscal recomendations are welcome from this quarter, but unwelcome by democrats that insist there is no problem with social security.

Bush is the one who said the problem with the social security is its inability to pay that benefits promised to future retirees. If the problem its inability to pay the promised benefits then Bush suggests cuts as a solution to the problem Bush identified in the first place? It should be cleared to the most simpleminded person, that either allow the benefit cuts to happen, which does not require any change in Social Security, or increase the amount of resources so that 100% of the promised benefits can be paid. But suggesting one set of cuts to prevent another set of cuts is not a solution it simply restating the same problem which is precisely what Bush has done. I certainly favor increasing Social Security taxes so that future retirees can receive the promised benefits. If we to do that , millions of low and middle income Americans will suffer so the relatively small number of well-off Americans can live even higher on the HOG.

you STILL have not answered lucas! You bash Bush for even suggesting cuts to SS but then you turn around and advocate the same thing.

I am still a few years short of getting social security... I will give up my benifits, I do not need the paltry 1300 or so.. neither does my wife. I think people that are well off should not get social security in the first place, I mean what is a few bucks to a bill gates and the like.

Smart planning for your or my future is the way to go, not depending for social security to pay your way into your golden years.

I'm not trying to blame anyone. Bush is the one who is claiming there is a crisis with Social Security.

Actually democrats have been campaigning for years on how bad social security is. Now for some reason they don't think there's a problem and it should be left alone.

If we all agree the problem with Social Security is its inability to pay 100% of the benefits in the future , then we must find a way for it to pay the benefits. What George Bush has suggested will result in cuts of about 30% to future retirees. That is not paying promised benefits it is cutting the promised benefits. If we do nothing, Social Security itself will cut benefits by about 25% starting in 2042. So the issue remains how is what George Bush is suggesting a solution to the Social Security problem he has identified? The changes Bush has suggested will produce the very same result as doing nothing!

The ONLY way to make sure Social Security is able to continue paying 100% of the benefits after 2042, is to increase the amount of money in the Trust Fund to cover the baby boomer retirement benefits! If we are not willing to do that, do nothing and in 2042 the system will cut the benefits to equal the incomming tax revenue .

Here's my attitude on Social Security:
1. It's not there to support us in our old age. It's there to supplement whatever savings we should establish for ourselves. SS is supposedly like paying into a big bank account that you get some back out of when you retire. It is a very small portion of what you earn overall.

2. The government has NEVER been able to properly invest money. If I took the same money I'd put into standard SS and put it instead into a stable money market account, I'd probably see a better return by a large margin.

I would MUCH rather be in control of my retirement funds than let the government manage one red cent. SS is a system that doesn't work.. it just took us a few decades to realize it. It needs a serious restructuring and fast, otherwise the money I put in will vanish never to be seen again. I'll be retiring right around the time the system is going to go belly-up. That will have been a working lifetime of SS contributions that I'll never see a return on.

First, even if no changes are made, you will reveive 75% of the promised benefits. You are correct, Social Security was ONLY intended to be part of what a person needs for retirement. It has been a FLOOR to build on. The Bush changes will not fix the problems since his answer will cut your benefits the same as doing NOTHING! The Trust Fund is invested in Trearury Bonds which do pay interest as high as any Money market but less the the historic rate of return from equitty investments.

Reply #14 By: Citizen drmiler - 5/16/2005 5:37:05 PM Bush is the one who said the problem with the social security is its inability to pay that benefits promised to future retirees. If the problem its inability to pay the promised benefits then Bush suggests cuts as a solution to the problem Bush identified in the first place? It should be cleared to the most simpleminded person, that either allow the benefit cuts to happen, which does not require any change in Social Security, or increase the amount of resources so that 100% of the promised benefits can be paid. But suggesting one set of cuts to prevent another set of cuts is not a solution it simply restating the same problem which is precisely what Bush has done. I certainly favor increasing Social Security taxes so that future retirees can receive the promised benefits. If we to do that , millions of low and middle income Americans will suffer so the relatively small number of well-off Americans can live even higher on the HOG. you STILL have not answered lucas! You bash Bush for even suggesting cuts to SS but then you turn around and advocate the same thing.

--Huh!? I didn't say that,that was the COL, my view on it is at least something is getting done about it, i applaud bush proposeing something, which seemed to take some democrats a long time, they must be a little slow, so dr. miler, please double check your info before you bash someone for something they didn't say....thank you, come again....