Social Security - can't we do better?

As much as I have seen posted on the need to "save Social Security", I've started to wonder if we can do better...
The simple truth is that Social Security has plenty of problems even from a liberal perspective.

First of all, it is funded by a highly regressive tax. I pay far more to FICA that I do in Federal or State withholding, and that's before the employer matches it. It is a flat tax on wages which hit low wage workers the hardest, workers who also see the least benefits because they have the least access to healthcare which leads to shorter lifespans.

Second of all, there is the infamous cap where income over $89,000/yr is not taxed. This makes an already regressive tax system even more regressive.

Third, Social Security is not means tested. In fact, because it is supposedly a retirement plan, the wealthy recieve far more that lower income families.

Taken together, points 1, 2, and 3 mean that a minimum wage worker is very likely subsidizing the Cadillac payment of a wealthy retiree. All this for a system that they will probably never benefit from. Is this the BEST progressives can do?

Fourth, modern demographics create problems for Social Security. When Social Security started, population growth was high and people didn't live as long. There was a high ratio of workers to retirees. Now, as birth rates decline and as people live longer, the ratio is considerably lower, which will inevitably mean tax increases or benefits cuts for someone somewhere.

What I've seen in the debate so far is Republicans proposing wrong, foolish, and ineffective ways of fixing Social Security, and Democrats ignoring any problems with the current system. The party of bad ideas vs. the party of no ideas.

Why not come up with a plan that will help Americans save better for retirement, assist seniors (and others who are now helped with SSI) who need it, and come up with a fair way to pay for it all?

If anyone has any good ideas about how to take care of our retirees without breaking young workers, now is the time to bring these ideas forward into the debate.

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11 Comments

I agree
To reap the greatest benefit politically from this fight, the Democratic leadership must put out its own plan on this.  
by Max Friedman 2005-03-20 11:01AM | 0 recs
Re: I agree
At http://www.cbpp.org you can see where the money comes from and what the GOP is doing with it.

Basically, the whole Social Security thing is a diversion, as Social Security is solvent for a long time..

However, many people may lose their jobs over the next few years due to technology improvements...

Its quite possible that those changes may be huge...

But of that happens, SS will be the least of our problems..

From their web site:
http://www.cbpp.org/pubs/socsec.htm

"Is Social Security working?   Social Security benefits raise nearly 13 million American seniors out of poverty, cutting the share of seniors who are poor from nearly one in two to one in twelve.  While Social Security faces a significant long-term funding shortfall, the Social Security trustees and actuaries report that the program can pay  full benefits until 2042 and about 70 percent of promised benefits after that.  The Congressional Budget Office projects that Social Security can  pay full benefits up to 2052 and about 80 percent of promised benefits after that.

How would private accounts affect Social Security's finances -- and the federal budget?  Private accounts do nothing by themselves to reduce the Social Security shortfall.  In fact, private accounts would worsen Social Security's finances by diverting payroll tax revenues away from the program.  The private accounts plan proposed by the President would worsen the federal budget outlook as well, by requiring trillions of dollars in new borrowing.

How would private accounts affect beneficiaries?  Under the President's plan, workers who open a private account would receive a significant cut in Social Security benefits that in many cases would offset the entire value of their private account.  This would be in addition to any benefit cut that might be imposed to restore Social Security's long-term stability.  The President has proposed no measures to close the long-term Social Security shortfall, but the main private accounts plan proposed by his Social Security Commission would accomplish this through large cuts in future benefits.

Are radical changes needed to maintain Social Security?  No.  The long-term (75-year) Social Security shortfall is about one-third to one-fifth as big as the Administration's tax cuts and can be closed through a mix of modest benefit and payroll tax changes phased in over a number of years."

by ultraworld 2005-03-20 01:46PM | 0 recs
This is insanity
Why should Dems put forward a plan before Bush does? That would only give Bush more momentum. See? Even the Democrats admit we have a crisis!

The Dems have to at least pretend they have the balls God gave a chipmunk instead of caving in to media pressure to negotiate with themselves.

Why not come up with a plan that will help Americans save better for retirement, assist seniors (and others who are now helped with SSI) who need it, and come up with a fair way to pay for it all?

So the Democrats come up with the perfect plan and what happens to it? The GOPers take it into a conference committee and come out with a bastardized version that only Bush and Uncle Scrooge could love.

Why the rush to give Bush another victory? Couldn't the Dems at least wait until after the 2006 election to help Bush dismantle Social Security? We can do better after the 2006 election and even better than that if we elect a Dem in 2008.

Where is the panic and hysteria coming from? The American people aren't putting any pressure on the Dems to reform Social Security. Bush's ratings are falling through the floor. Why would the Dems abandon the only winning strategy they have on any issue?

Oh, sorry. I forgot we were talking about Democrats. The only thing they do well is punk out.

by Gary Boatwright 2005-03-20 01:33PM | 0 recs
momentum?
Momentum?

You have got to be kidding..

Bush's reality-distortion field may be pushing the idea of his 'momentum', but people are not falling for it.. at least where I live, (west coast) people are extremely unhappy with his performance, especially on the economy.

Basically, every new 'plan' is a new scam to steal more money from you and me..

We increasingly live in a kleptocracy.

by ultraworld 2005-03-20 01:50PM | 0 recs
Re: momentum?
Look at how many bills Bush and the GOPers have passed. Bankruptcy, class action law suit restrictions, tax cuts, Medicare Prescription drug bill, repeal of the inheritance tax, ANWR.

Bush and the GOPers are smoking the Dems. The only bill they are even trying to stop is Social Security.

by Gary Boatwright 2005-03-20 10:31PM | 0 recs
Re: This is insanity
You are talking about playing defense, I am talking about a counter-attack.

No, I don't like what the Republicans are doing, but  given enough time, they will attack Social Securities weakness point by point as proof that their solution is needed. (Yes, I know this is a logical fallacy, but that doesn't matter.) We need to be ready for this. We can't play defense forever.

You say this would give Bush more momentum. I say this would give Bush enough rope to hang himself. He wants reform? How about means testing on benefits, eliminating the cap, and a huge taxcut for most working Americans? Getting GOP leaders to vote against a taxcut so that wealthy Americans can have more would be priceless. Talk about it now, and run on it in 2006.

Of course, more seasoned strategists may disagree on the timing, but it is something we need to think about and start talking about now.

by wayward 2005-03-20 05:48PM | 0 recs
Re: This is insanity
The Dems are doing just fine with obstruction. Anything they do before Bush puts something on the table will set them back. Why do you think Bush has been stalling so long? Whoever puts out the first plan allows the other side to draw first blood by tearing it to pieces.

The Hagel and Graham talking points plans don't count. Nobody takes them seriously. Bush and the Dems are the players. Whoever blinks first and puts forward a plan loses the advantage.

Dems should continue to keep their power dry on any "new" plans. There isn't anything new. There are several Dem alternatives floating around. Nobody takes them serious either because Bush won't even consider tax increases and Dems won't accept benefit cuts.

The first bone head Dem that does something stupid to take the heat off of Bush should be stripped of every committtee position and taken off the party contribution list. If they want to help Bush so badly then can switch parties and make it official.

by Gary Boatwright 2005-03-20 10:37PM | 0 recs
good URL to see how stated 'priorities' are lies
At the Center for Budget and Policy Priorities  at http://www.cbpp.org/ they have a lot of charts that show where the money comes from and where it goes..

I came away gasping at how profoundly dishonest and unfair the news coverage on these things is..

Check it out..

And no, the Dems need to sit tight on Social Security - until they are in power.. (probably 2006)

Or the GOP will take it away...and give more tax cuts to the likes of Kenneth Lay...

by ultraworld 2005-03-20 01:37PM | 0 recs
Re: good URL
Excellent link ultraworld. Thanks. I bookmarked it for furthur study and reference.
by Gary Boatwright 2005-03-20 02:20PM | 0 recs
I agree, partly
Because I think the GOP's long-term plan is to introduce a fully non-taxable investment system.

We need to offer a plan that heads that off.

The GOP is intent on imposing SOMETHING very regressive.  SocSec abolition was their #1 target.  Making all investments non-taxable is their checkdown in their set of reads.

I think simply proposing an end to the cap on who pays in would do well enough.

No non-taxable investments, or any bullshit.  If we offer a non-taxable investment, it should have a cap that ensures rich people don't just turn it into a giant tax shelter.

by jcjcjc 2005-03-20 08:30PM | 0 recs
yes SS has problems
But remove the cap, that'd help TONS

I'm still waiting for the Dems to blow the SS battle.

by ben114 2005-03-20 10:04PM | 0 recs

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