Social Security

Workin’ to 72

ArchPundit February 29, 2008 0 Comment

Making Bill Pascoe’s faux outrage even worse, Oberweis talked about wanting to privatize social security during the Trib forum.

“In return for being able to direct one quarter of the total payments into the special account, the individual would be giving up…the first, approximately six years of social security payments. It would move him from, say, 66 retirement to age 72 retirement.”

How does Pascoe refer to this privatization plan:

“To begin: the Foster ad falsely claims that Jim ’supported Bush’s scheme to privatize Social Security, gambling your retirement in the stock market.’ Bill Foster knows this isn’t true, because he sat next to Jim Oberweis yesterday in the Chicago Tribune’s editorial board endorsement session and heard Jim talk about his plan to strengthen Social Security, to make sure it’s still there 30 years from now.

Err…Oberweis has what is called a privatization plan–as CATO originally called it and, not only that, he wants to raise the age of retirement to 72!

3 Years Before Bush Ever Had a Plan for Social Security?

ArchPundit February 28, 2008 0 Comment

Pascoe below makes the claim:

“The on-screen sources listed for Mr. Foster’s ridiculous allegation are the Daily Herald of Feb. 17, 2002, and Jeff Berkowitz’s ‘Public Affairs’ show of Dec. 7, 2007. NOWHERE in the contents of EITHER source is there ANY indication that Jim Oberweis ‘supported Bush’s scheme to privatize Social Security’ — in fact, that would have been quite impossible, given that the Bush Administration DIDN’T EVEN OFFER A PLAN TO ADDRESS SOCIAL SECURITY’S LONG-TERM STABILITY UNTIL 2005, THREE YEARS AFTER THE FIRST SO-CALLED ‘SOURCE’ CITED!!!

Let’s start with when did Bush offer a plan to address Social Security Long-Term Stability:

Social Security has emerged as a critical issue in this year’s presidential campaign, but neither candidate seems prepared to address the system’s long-term financial problems. Instead, Gov. George W. Bush wants to let individuals invest a small part of their Social Security contributions in the stock market, where he thinks they will earn a better return, and Vice President Al Gore proposes to keep the system largely intact with an infusion of general tax revenues. Neither proposal would really stabilize the system in the long run. In truth, though Social Security is projected to become bankrupt in four decades, the system is not all that far out of kilter. It would not be hard for bold politicians to devise a fix.

Social Security may well be, as Governor Bush has said, “the single most successful government program in American history.” It was created in 1935, during the depths of the depression, to provide a guaranteed income to retired workers for as long as they live. Unlike private pension plans, Social Security benefits keep pace with inflation and, unlike 401(k)’s and other popular private plans, Social Security benefits do not fluctuate with stock and bond markets. Social Security provides the majority of income for most retirees and all the income for about a fifth of the elderly.

From its inception, the system has taken in payroll taxes from the working generation and turned almost all of them over to retirees. At the core of Social Security are the notions of social insurance — everyone participates in a common plan — and redistribution — the program tilts in favor of low-paid workers. The benefits for low-paid workers are about 80 percent of their average lifetime earnings, while benefits for high-paid workers are about 30 percent of average earnings. The progressive formula has cut the poverty rate among the elderly by two-thirds, reducing their poverty to below that of the general population. That is a remarkable triumph.

The question before voters is whether a program born out of depression — when poverty was rampant, few married women worked for pay and no one had 401(k)’s or I.R.A.’s to provide for retirement — needs to be revamped.

One reason for thinking so is the projected bankruptcy — a sobering but manageable situation. The system will run surpluses for the next 15 years, building a large reserve. But in 2010, the first wave of the baby boomers — the nearly 80 million people born between 1946 and 1964 — will begin to retire and collect retirement checks. The number of people in the work force for every retiree will fall from about five today to about three in only 30 years or so. That, and the fact that people are living longer, will put a strain on workers to support the retirement needs of the elderly. The system will begin to run deficits around 2015. By 2037, the trust fund is expected to be empty.

But for all the talk of bankruptcy, the system is not facing irreparable financial crisis. Even after 2037, payroll taxes will cover about 70 percent of promised benefits. Deficits over the next 75 years, the planning horizon for the program, will equal less than 2 percent of total payrolls — hardly a catastrophic shortfall. If the economy were to grow only slightly faster than the actuaries at the Social Security Administration now project, the deficit would disappear.

One proposed remedy for financial imbalance is partial privatization, the approach favored by Governor Bush. Under current law, workers and employers pay a 12.4 percent payroll tax that goes into a public trust fund. Under partial privatization, workers could divert, say, two percentage points of that tax to private accounts that the worker could then invest in stocks and bonds. Workers would collect less money from the trust fund when they retired, alleviating financial strain on the system. But they would expect to more than make up for the loss by drawing from their private accounts.

Mr. Bush’s sketchy proposal fails to answer where he would find the money to pay retirees as payroll taxes were diverted into private accounts. But there are other fundamental problems with the proposal as well.

New York Times, May 29, 2000

Hmmmmm….Pascoe has some issue with dates apparently.

But more interesting is there is a point here.  Just it makes Oberweis look worse:

Specifically, Oberweis believes workers should be allowed to invest half of the current 6.2 percent tax in a personal account. Cox supports a lower percentage but would not specify a percentage. Durkin also has not offered details about what kind of personal savings account plan he would support.

Chicago Daily Herald, February 17, 2002

Oberweis actually would have had larger private accounts than Bush at the time in 2002.

Perhaps Bill Pascoe should know something about his own candidate?