Wednesday, February 02, 2005

Blogging the State of the Union: Social Security Reform

The President has just said we need to save and strengthen Social Security. No argument there. The other shoe is about to drop, though, as the Pres. says "No one over 55 needs to worry; benefits will be there." President Bush now notes that where it used to be 16 workers paying in for every person drawing on the system, its now only 3 workers, with 2018 being the breakpoint, with an annual shortfall of $300 million by 2033 and bankruptcy by 2042. Boos from the House (Democrats?, Republicans?) Must have been Democrats, who remain firmly glued to their seats during the applause line.

The challenge: "We must fix Social Security permanently". Great move: invokes Pres. Clinton's plan to increase the retirement age; Democrat Sen John Breaux's idea to discourage early collection of benefits and Democratic Sen Daniel Patrick Moynihan's recommendations to alter how benefits are calculated. All Democrats.

Applause line that retirement security is more important than partisan politics gets applause from everyone.

Roadmap: Permanent fix NOW; no increase in payroll taxes; lower income people get help in retirement; no change for those nearing retirement; and changes in system must be gradual. Best way to do this: Voluntary personal retirement accounts. (Democrats again glued to seats). Funds can only go into conservative stock and bond funds; no fees; volatility in accounts limited (insured against???) as earner nears retirement. Pres. Bush equates this plan to what Federal employees already enjoy.

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