Social Security will be broke in 10 yearsGeorge W. Bush.
Theres nothing noteworthy about that comment from Mr. Bush, except that he said it in 1978 when he was running for Congress from Texas.
It was BS then and its the same today. Let us hear the truth one more time: there is no crisis in Social Security, and it is not going bankrupt.
David M. Walker, head of the Government Accountability Office, declared Social Security does not face an immediate crisis, but it does need to adjust the financing method over the long term, and it would be prudent to address it sooner rather than later (guardian.co.uk)
Having said that, Walker went on to say that President Bushs plan to privatize the program would make its financing problems worse over the short term. Walker, who holds the title of Comptroller General, made his comments before the House Ways and Means Committee at its first hearing on Social Security overhaul.
Committee Chairman Rep. Bill Thomas (R-Calif.) indicated that the presidents program is merely a starting point for the debate. Social Security paid out approximately half-a-trillion dollars to 47 million Americans last year.
Thomas said that because the population is aging, Social Security is not sustainable based upon the old method of financing. He said Bush has agreed to expend significant time and energy with the American people so there will be a receptive audience when this committee examines options to change the system (sfgate.com)
Both sides of the issue are working feverishly to tilt the debate in their favor. Republicans and their corporate backers are spending more than $10 million to sell the idea of a crisis and the need for privatizing the program.
Democrats, while rejecting most of Bushs plan, admit some adjustments need to be made. It would be fiscally irresponsible to do nothing, said Rep. Charles Rangel, ranking Democrat on the Ways and Means Committee.
Proposals to solve this manufactured crisis include cutting benefits, increasing taxes, raising retirement age and allowing investment of some Social Security income in private accounts. Social Security will be facing a cash shortage in 13 years if present practice continues. Part of the problem is created by other benefit programs for seniors, such as Medicare and Medicaid.
Two very obvious things could be done to eradicate most of the cash shortfall. The first steps toward solving the Social Security problem must be an immediate halt to the ongoing daily spending of Social Security money on other programs, followed by a repayment of the $1.7 trillion that has already been borrowed (stolen) and spent, said economist Allen W. Smith, author of The Looting of Social Security: How the Government is Draining Americas Retirement Account.
Smith said hes baffled that President Bush has been able to spend about $400 million of Social Security funds daily on other programs after misusing $509 billion of SS monies in his first term.
In his State of the Union address Feb. 27, 2001, Mr. Bush said: To make sure the retirement savings of Americas seniors are not diverted in any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security, and for Social Security alone.
Sounds good, eh? But in a speech in Pennsylvania Feb. 10 of this year, Bush stated: Every dime that goes in from payroll taxes is spent. Its spent on retirees, and if theres excess, its spent on government programs. The only thing that Social Security has is a pile of IOUs from one part of government to the next (yahoo.com/prnews).
The IOUs are non-marketable government paper, redeemable only by the taxpayers. Can you say, double taxation? We get to pay back all the money they took, plus interest. Smith rightly asks: Why arent the American people outraged? Probably because most of them are unaware that this has been standard operating procedure for the feds for at least 20 years.
As Mr. Bush travels the country making his pitch for private accounts and other changes, you will hear a lot of numbers. Here are a few to think about: Medicares unfunded liabilities amount to almost $28 trillion while Social Securitys will be $3.7 trillion over the next 75 years. The government has borrowed from all the trust funds a total of $3,165,840,595,167. The Social Security Trust Fund has yielded $1,690,071,745,747. It has produced a whopping surplus every year, which Bush and the boys on the Hill have gleefully grabbed.
The Gross National Debt includes the entire $1.6 trillion SS Trust Fund. As weve said, it has all been spent. Since 1983, we have paid extra in payroll taxes to build up a surplus. That excess will amount to more than $3.5 trillion by 2012 and even higher by 2017.
All that cash, however, goes into the feds general fund where Congress and the White House can get their hooks on it. And there is no legal compunction for them to pay any of it back (2act.org).
We mentioned two steps to cure the biggest part of the shortfall. The first is stop stealing the surplus. The second step is to remove the cap on income in excess of $90,000 annually. Let the wealthy pay a fairer share of the burden.
Given the current crop of weasels on Capitol Hill, neither of these steps is likely to occur.
Mr. Bush claims these proposed changes, if adopted, would not affect anyone older than 55, but we have seen how he speaks from both sides of his mouth. Would you buy a used car from this guy? How about a Social Security reform plan?
For instance, Bush likes to cite the federal Thrift Savings Program or TSP as a model for private SS accounts. He says if its good enough for federal employees, its good enough for everybody.
But there are major differences between TSP and Social Security. TSP has 3.4 million participants and manages $151 billion. There are two systems for federal employees: the Federal Employees Retirement System (FERS) and the Civil Service Retirement System.
Those in the first system may put 15 percent of their pretax income into TSP accounts up to a maximum of $14,000. Those in the second system can allocate up to 10 percent of pretax income. Next year, members of both plans will be able to allocate up to $15,000.
FERS members get an automatic 1 percent contribution from the government plus matching contributions up to 5 percent. The other plan does not offer those benefits, but TSP accounts arent the only benefit for those employees. Those in FERS also draw Social Security and must participate in an annuity program. Their TSP contributions do not lower their SS benefits. Most in the Civil Service program dont pay Social Security, but they get pensions and can contribute to TSP accounts and also must take part in an annuity program (smartmoney.com).
The rest of us just get the Social Security check, and thats it. Private accounts, such as Bush wants, would act as substitutes for SS and would not include any matching contribution from the federal government. In addition, the government would decide who would handle your investments, what securities would be purchased, and the Feds would take up to 80 percent of any proceeds.
Maximum annual contribution levels for these private accounts would be just 4 percent of pretax incomeup to $1,000 a year to beginaccording to the latest proposals under discussion. In addition, the investors regular SS benefits would be cut.
Bush and company are rabidly pursuing an objective long held by the radical rightthey want, not reform of Social Security, but its abolishment. The same goals are attached to all other social welfare programs now operated by the national government. The neocons want all these programs shifted to the private sector. Those unable to help themselves would be left without help. Compassionate conservatism in action.
As writer William Cox puts it: Unquestionably, the lives of millions of American workers and our families will be devastated in the future by the thoughtless and selfish actions of our representatives if Bush succeeds
in his cockamamie attack on Social Security. It is dangerous to assume that they care more for us than for their wealthy friends, corporate sponsors and Wall Street conspirators, who are the only ones guaranteed to benefit from Bushs nutty scheme to privatize Social Security (onlinejournal.com).