Pozen Pitches Social Security Fix

[nickshepDEM]

On the shell it seems like the best proposal Ive seen thus far. The cap stays where it is, taxes stay where they are, and we pass on adding 4 trillion or so to our already out of control debt.

http://www.investmentnews.com/news.cms?newsId=1556

MFS chairman Robert Pozen says there is still an opportunity to fix Social Security, but time is running out, Investment News reports.

Pozen, a member of the White House Commission to Strengthen Social Security, discussed his plan to reform the system at the Discover 2006 conference in Denver. He says such reform will hinge on "political will," and he sees it as critical to President Bush's legacy.

Social Security is projected to go into the red by 2017 and will likely become insolvent by 2041. Pozen's proposed fix calls for adopting a "progressive indexing" formula, which is aimed at slowing the growth in benefits to middle- and higher-income wage earners.

Benefits to those earning under $25,000 a year at retirement would continue to be based on wages, but benefits to those earning $113,000 and above would be linked to a price indexing model, which rises slower than wages. Benefits to those in the middle would be based on a mix of wage and price indexing.

Pozen estimates the Social Security system has a $3.8 trillion deficit. He says his plan would cut that to $1.2 trillion over the long run. While he admits his proposal is toughest on higher-wage earners, he says it’s a better option than increasing taxes or raising the retirement age.

[Warpy]

1. This is window dressing and just another tax increase

until they pass a law getting OASDI overpayments OUT of the general fund and out of Congress's greedy hands. Since this is as likely as the Pope on a pogo stick, we can forget all about this "indexing" scheme, which is only a scheme to increase taxes on all but the poorest working people. All this scheme will do is raise taxes and revenues and allow them to lie a little longer about the disaster their tax cuts to the richest and corporate have been for this country's financial health.

If they truly want to fix Social Security, they'll get those overpayments out of the general fund and then RAISE WAGES. People pay a flat amount on their wages, and they'll pay more when their wages are up past subsistence level.

Anything short of that is just conservative hogwash and misdirection.

[nickshepDEM]

3. Could you elaborate more on what your describing...

Sounds like you know what your talking about... Im just having a hard time following.

[Warpy]

8. OK, here's some history

Social Security was meant to be an insurance program (the "I" in OASDI), which means it collected in premiums what it paid out every year, plus a very small overhead. There was occasionally a little more than was paid out, and that rolled over until the next year.

Johnson got permission to use the SMALL overpayment to help deftray the cost of the Vietnam war, and the overpayments were put into the general fund to do so.

Reagan is the villain. He cut taxes on the richest and threw this country into fiscal crisis. He raised the premiums SIX TIMES between 1983 and 1988, thus giving the poorest workers a back door tax hike because 50% of their overpayments at the end of those hikes were going into the general fund along with their income taxes.

Following it yet?

Anything that raises revenues in any way without getting overpayments out of the general fund is just misdirection. The overpayments will be increased and just add to the tax burden on labor. Removing the cap, raising the rate, or doing a progressive tax will all result in tax hikes, putting more money into the general fund but no money into the nonexistant trust fund. That "trust fund" has been squandered every year to cover up the disaster that reckless tax cuts have caused.

[madfloridian]

2. That was one reason the DLC was founded....

to help the agenda of privatizing everything.

That is nonsense talk. And it is scary to seniors who paid into this system all their lives.

I consider the DLC complicit in screwing seniors.

[nickshepDEM]

4. Who said anything about privatizing...

[Jim Sagle]

5. "The cap stays where it is" - the first mistake.

No, the cap does NOT stay where it is, the cap goes away.

Problem solved.

No privatization needed.

No DLC needed, either.

Thank ya very mush.

[Warpy]

6. Raising the cap won't do squat

until the overpayments are out of the general fund.

[Jim Sagle]

9. ?

[nickshepDEM]

7. Maybe I read the article wrong, but what I thought Pozen meant

by indexing was, in a sense, means testing social security. If you make 113,000 you will draw benefits based on a model rather than what you paid in.


Am I reading this wrong?

Whats all the talk about privtization?