Democratic Senator Conrad Calls For Social Security Sacrifices!

Discussion in 'Current Events' started by Itsthetruth, Mar 15, 2005.

  1. Itsthetruth
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    Democratic Senator Kent Conrad Calls For Social Security Sacrifices!

    Finding Common Ground on Social Security Reform by Senators Kent Conrad and Lindsey Graham
    January 5, 2005

    Senator Conrad is a Democrat from North Dakota. Senator Graham is a Republican from South Carolina.

    "With a renewed debate over the future of Social Security now underway, Republicans and Democrats alike need to begin by setting aside our differences and focusing on the common ground between us.

    .... strengthening Social Security will require tough choices and, if done in a responsible manner, can greatly improve our nation's fiscal outlook. Acting sooner will give us more time to adjust and allow for more gradual solutions to be adopted. But there are no easy answers. To address Social Security's funding challenges, all options should be on the table for discussion.

    Both parties have been far too hesitant to ask the American people to make sacrifices for the common good. It is our belief the American people, if asked in a responsible manner, will embrace the hard choices necessary to save Social Security for younger workers and future generations.

    It is time to address this problem. Social Security must be preserved and strengthened. But we need to be candid about the costs and willing to make the tough choices that real reform will require. If Republicans and Democrats can agree on this, we can save a vital program for generations to come."

    http://conrad.senate.gov/~conrad/releases/04/12/2005105...

    Senator Conrad flew with George Bush on Air Force One on a flight from Washington, D.C., to Fargo, North Dakota and discussed Social Security with him. Senator Conrad said: "I've accepted the President's invitation to accompany him to Fargo and I will be there to welcome him. We'll have a chance to discuss Social Security. As I've made clear, there are places where I agree with the President, and there are places I have concern with the President's plan".

    Senator Conrad has not yet indicated what kinds of "sacrifices" he thinks working people should make in order to "save" Social Security. While against privatization, perhaps Senator Conrad favors some of the other proposals Bush is suggesting such as raising the retirement age or changing the formula used to calculate benefits. Calculating benefits based on price increases, as Bush favors, rather than wage increases could cut future benefits as much as 60%!

    So if Bush's privitization scheme fails, will some Senators go along with Bush options to cut social security benefits? I bet some will. And Senator Conrad seems like a prime candidate to find "common ground" with Bush and the Republicans to cut benefits and tighten eligibility requirements.
     
  2. 5stringJeff
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    5stringJeff Senior Member

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    Frankly, I'm glad someone is talking about it. Not even FDR wanted SS to become welfare for the elderly.
     
  3. Itsthetruth
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    So does anyone here favor changing from wage indexing to price indexing to calculating Social Security benefits? And if you do, please say why you think this will be beneficial for people who will retire and collect Social Security benefits.

    Bush Says Retirement Benefit Growth Not Realistic
    By REUTERS
    February 15, 2005

    WASHINGTON (Reuters) - President Bush said on Tuesday that limiting the growth of future retirement benefits for Americans would be an ``adjustment to reality.''

    Bush said in an interview with local newspapers that he was not expressing a preference for one idea that would link benefit growth to increases in prices rather than wages. That idea, backed by some White House officials, would effectively slow the growth of the benefits.

    ``Benefits are scheduled to grow at a certain rate, and one of the suggestions, for example ... was they grow ...they grow, but not at a rate as fast as projected. You can call it anything you want. I would call it an adjustment to reality,'' he said.

    http://www.nytimes.com/reuters/politics/politics-retire...
     
  4. 5stringJeff
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    5stringJeff Senior Member

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    I favor it because it will not be essential for the "fixed" portion of SS benefits to be so high, because people's investable SS benefits will grow to be large enough to more than make up for the difference. This means that the cost to the US government to pay out SS benefits falls, making the program more affordable and more viable, without running deficits.

    And, just to remind you, current benefits are not going to be cut. Benefits for those 55 and older will remain the same. And if someone wants to keep their money in the government's hands, they are still going to be free to do so.
     
  5. Itsthetruth
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    The so-called "private accounts" scheme is a seperate issue and it appears this proposal is all but dead.

    Let's assume for a moment that "private accounts" is dropped and the Bush government decides to campaign hard for changing to price indexing, something Democratic Party officials might support and White House officials say they do support.

    Would you favor dropping wage indexing and replacing it with price indexing and why?
     
  6. 5stringJeff
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    5stringJeff Senior Member

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    I think your assumption that private accounts are dead is invalid, but I'll play along for now.

    Given that SS will start running deficits in 2017, it follows that we need to find a way to either a) increase taxes, or b) decrease outlays. Bush is opting for choice b) with the re-indexing. The alternative would be to raise the payroll tax, which no Republican would vote for (nor should they). So yes, I would still support the re-indexing. And remember, this is not a "cut in benefits." It's a slower increase in benefits. Benefits will still rise, year by year, indexed to price levels.
     
  7. Itsthetruth
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    Of course price indexing wouldn't reduce retirement benefits. It's a huge increase in benefits.

    Sure. OK. Go drink the corporate kool-aid. Just ignore what the Office of the Chief Actuary for the Social Security Administration reports.

    How "Price Indexing" Would Cut Your Social Security Benefits

    Center On Budget And Policy Priorities
    Revised January 28, 2005

    SO-CALLED "PRICE INDEXING" PROPOSAL WOULD RESULT IN
    DEEP REDUCTIONS OVER TIME IN SOCIAL SECURITY BENEFITS
    by Robert Greenstein


    This proposal is now in the news. In comments shortly after the election, President Bush said the plans that his Social Security Commission produced, the principal one of which includes this proposal, are a good place to start the debate. On December 2, the chairman of the President’s Council of Economic Advisers, N. Gregory Mankiw, criticized “wage indexing” — the shorthand term used to describe the current approach — in a speech, while stating that “the Commission’s proposals are consistent with the President’s principles for reform.” Most recently, White House Director of Strategic Initiatives, Peter Wehner, explicitly endorsed shifting to price indexing in a memo to Administration supporters that leaked in early January. It also may be noted that a Social Security bill introduced last year by Senator Lindsey Graham (R-S.C.), which essentially turns the principal Commission plan into legislation, includes this proposal; the Graham plan reportedly was developed with the help of White House staff. These developments strongly suggest that the proposal to change the Social Security benefit formula by lowering the replacement rates is receiving serious White House consideration.

    The Effect on Social Security Benefits

    Advocates of this proposal have sometimes sought to portray it as not representing a benefit reduction and as simply curbing excessive growth in Social Security benefits. But the change would, in fact, represent a substantial reduction in benefits, as compared to the benefits payable under the current benefit structure. According to estimates from the Social Security Administration’s Office of the Chief Actuary:

    Under the proposal, a worker born in 1977 who earned average wages throughout his or her career and retired at age 65 in 2042 would receive monthly Social Security benefits 26 percent lower than under the current benefit structure. Instead of this worker’s annual benefit being $19,423, the benefit would be $14,432, a $4,992 reduction. (These figures are in 2004 dollars)

    [​IMG]
     
  8. rtwngAvngr
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    Hey nimrod, social security promises are b.s. In fine print on the statements sent out it says benefits may be increased or decreased, at any time. Do you want to always be dependant on the whims of a government bureaucrat? If not, think privatization.
     
  9. 5stringJeff
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    5stringJeff Senior Member

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    The "Kool-Aid" I'm supposedly drinking :tinfoil: is described by the very article you posted.

    Currently, SS benefits are pegged to wage increases. Each year, benefits rise by a certain percentage.

    The Bush proposal would lower the percentage that benefits are raised every year, by pegging them to prices, not wages. But benefits still rise every year, they just rise less.

    The 26% benefit "cut" is the difference between what benefits would rsie to if untouched, and the level benefits will rise to if indexed to prices. There is still a yearly increase in benefits.
     
  10. musicman
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    musicman Senior Member

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    Ah, Washingtonspeak!

    Decline in the rate of increase = CUT.
     

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