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December 06th, 2005How to pay transition costs
December 06th 01:33:14 AM
Former Chilean Labor Minister Jose Pinera has a suggestion:
"In Chile we had state-owned enterprises. In America I understand that the federal government owns a third of the land. I don't know why the government owns land, and I don't know the value. Nor am I saying that you should sell the land tomorrow. What I am saying is that when you consider privatizing Social Security, you must look at assets as well as liabilities. I am sure that the U.S. government has gigantic assets. Are they more or less than the liabilities of the Social Security system?"
Posted by Chris Schrimpf| Comments (3)
December 05th, 2005One Wasted Year = 660 Billion
December 05th 11:59:21 PM
Here are two numbers to remember: $660 billion and 10 hours. Because of the failure to reform Social Security this year, the program's future unfunded obligations have increased by $660 billion. That amounts to a debt of more than $2,200 for every man, woman, and child in the United States. This comes on top of a previous unfunded obligation of $12.8 trillion. Yet this week, Senate Democrats used a parliamentary maneuver to prevent the Senate from scheduling just 10 hours of debate early next year on Social Security reform.
One Wasted Year = $660 Billion
by Michael D. Tanner
Mr. Tanner is the director of health and welfare studies at the Cato Institute and director of Cato's Project on Social Security Choice.
Here are two numbers to remember: $660 billion and 10 hours. Because of the failure to reform Social Security this year, the program's future unfunded obligations have increased by $660 billion. That amounts to a debt of more than $2,200 for every man, woman, and child in the United States. This comes on top of a previous unfunded obligation of $12.8 trillion. Yet this week, Senate Democrats used a parliamentary maneuver to prevent the Senate from scheduling just 10 hours of debate early next year on Social Security reform.
Once upon a time, Social Security reform was a bipartisan issue. Democrats like former Senators Bob Kerrey and Daniel Patrick Moynihan were outspoken in warning about the program's looming insolvency and calling for innovative approaches to fixing it. The Democratic Leadership Council and its think tank, the Progressive Policy Institute, explored solutions, including personal accounts. President Clinton led a national debate to "Save Social Security First."
But ever since President Bush called for reforming the nation's troubled retirement program, congressional Democrats have just one answer: no. No to personal accounts. No to changes in benefits. No to offering a plan of their own. No to any discussion or negotiation.
This wall of obstructionism, aided by millions of dollars in advertising by special interest groups, successfully stalled efforts at reform this year. The final attempt was an effort by Senators Jim DeMint, a Republican of South Carolina, and Rick Santorum, a Republican of Pennsylvania, to bring two relatively modest bills to the floor for debate. One of the bills, written by Mr. DeMint and cosponsored by Mr. Santorum, would rebate Social Security surpluses to workers to start personal accounts, preventing Congress from spending that money on other programs. The other bill, written by Mr. Santorum and cosponsored by Mr. DeMint, was a largely symbolic measure guaranteeing Americans over age 55 all the Social Security retirement benefits current law promises them, a provision intended to reassure seniors that any overhaul will not affect them. Neither proposal would have solved all Social Security's problems or was as ambitious as reformers once hoped for. But they represented small, incremental steps in the right direction. At the very least, they were worth talking about.
Under Senate rules, Messrs. Santorum and DeMint needed unanimous consent to schedule 10 hours of debate on the bills next spring. Democratic Leader Harry Reid objected. There will be no debate. There will be no Social Security reform this year - even though the program now has another $660 billion in its unfunded obligations.
And while Democrats have been obstructionist, Republicans have hardly earned a badge of courage on the issue. Too many of them ducked and weaved and did almost anything to avoid tough choices. The House leadership in particular was as effective as Democrats in blocking debate. Who cares about the debt we leave to our children and our grandchildren, they seem to say, as long we make it through another election cycle without having to stand up to the AARP?
But Social Security's problems are not going away. Within 12 years the program will begin running a deficit. The gap between its promises and what it can pay gets bigger with each passing year. The rate of return for younger workers continues to decline. Even more important, workers still have no ownership of their money. Doesn't that deserve at least 10 hours of debate?
Sooner or later, Congress must face these issues. But thanks to Democratic obstructionism and Republican cowardice, it won't be this year. $660 billion. 10 hours. Think about it.
This article appeared in the New York Sun on November 21, 2005.
Posted by Adam Cahn| Comments (0)
December 01st, 2005Thomas: It's not over yet...
December 01st 03:23:39 PM
From Cato:
"House Ways and Means Committee Chairman Bill Thomas, (R-CA), was unwilling to rule out the possibility for Social Security reform next year in an interview late last week with the National Journal. Although his comprehensive retirement bill failed to move on Social Security reform, Thomas 'would only concede that [the Social Security issue] hadn't moved 'yet,'' according to National Journal.
'Election years [like 2006] are the most opportune time to get things done,' Thomas said. 'That's why we got the Medicare [prescription drug bill] done.'"
Posted by Chris Schrimpf| Comments (1)
New York Times Article (12/1/05) comments on Britain's proposal for individual investment accounts!
December 01st 10:22:48 AM
British Panel Urges Retiring Later and Private Investment Accounts
By ALAN COWELL
LONDON, Nov. 30 - After three years of studies, an authoritative panel urged Wednesday that Britain's retirement age be raised to 67 from 65, and possibly higher, as part of a major pension change that would include the introduction of individual investment accounts.
The proposed changes played into the debate in rich countries, including the United States, which have forecast a pension crisis as societies age, retirees live longer and fewer working-age people pay the taxes to finance state pension systems.
"There is a major demographic challenge," said Lord Adair Turner, the chief of the Pensions Commission, which wrote the proposals made Wednesday.
Many nations, including the United States, Germany and Italy, have concluded that their citizens will have to work longer to offset the increased costs of pension systems, but the notion of augmenting state pensions with managed investment accounts has caused widespread debate. Additionally, retirement ages differ, with France and Japan offering pensions at 60 while workers in many other countries must be older.
The British plan seems to borrow from Sweden and other countries that have augmented state pensions with private savings accounts. The idea surfaced in the stalled debate over Social Security in the United States. The plan is intended to avoid a gap in pension financing estimated at $100 billion by midcentury.
The proposed changes here seemed likely to increase the burden on blue-collar workers, particularly those who leave school at 16 and are already required to work longer than workers in many other European countries until retirement at 65.
"We remain opposed to any proposal to increase the state pension age that would make manual workers and the poor worse off," the Trades Union Congress labor group said in a statement. "But the clear majority of the proposals are undoubtedly progressive and meet the tests we set in advance."
The government of Prime Minister Tony Blair called the proposals "the right basis for the debate to come," but said it would reserve its final judgment until mid-2006.
Gordon Brown, chancellor of the exchequer, has already signaled opposition to a proposal to link pensions to earnings rather than the cost of living, to make them more generous.
As a proportion of average salaries, British state retirement benefits are among the stingiest and most complex in Europe.
Single people qualify for a basic state pension of $140 a week but may apply for a means-tested additional amount guaranteeing a minimum weekly income of almost $190. Britons could augment their state pension with income from an individual account of 4 percent of earnings - a 3 percent employer contribution and 1 percent tax relief.
Posted by Jo Jensen| Comments (0)
November 30th, 2005What happens when you don't institute Personal Accounts?
November 30th 08:35:21 PM
You have to raise the retirement age:
"'There are significant problems in our pensions system. There is a major demographic challenge,' said Lord Turner, head of the commission.
Work and Pensions Secretary John Hutton agreed reform is needed and said 'the broad framework' outlined by the commission would be used as the basis for a public debate in the coming months before the government decides how to proceed.
Funding state pension systems is becoming a problem for many industrial nations. Italy has raised the age for a full pension to 60 from 57, Belgium is boosting the earliest retirement age from 58 to 60, and German lawmakers have agreed the retirement age should rise from 65 to 67 between 2012 and 2035..."
What's one of the proposed British solutions? Making the pensions optional: "Employees would be able to opt out of the system, but the commission said a matching contribution by employers on 60 percent of a worker's payment would encourage most to stay in."
Posted by Chris Schrimpf| Comments (1)
November 29th, 2005Lessons from Congressional Visits
November 29th 12:16:23 PM
One of the things that we've been trying to encourage S4 members to do is visit their members of Congress- to let them know that there are young people out there, constituents in their districts in fact, that care about Social Security and want it reformed! So right before Thanksiving, Will Fields decided to put that request into action. and i tagged along for the learning experience. Will is from North Carolina, so we visited two Congressmen from his districts-one from his home town and one from his College town. One was in favor of reforming social security through personal accounts and the other, well...wasn't. I learned many valuable things from these visits:
Congressional offices give away snacks! i got three bags of peanuts and a bag of prunes!! woo hoo.
ok- but honestly, i did gain some other insights as well. Mainly, that we're not going to change their minds on one visit, but we can demonstrate to them that there is a group of college students,(S4), that is concerned about this issue and wants personal accounts. That is a big deal, especially since we represent young voters from their district. They said to us, "We only get letters and meetings with people who don't want personal accounts"
translated: "AARP members are bombarding our offices with form letters, e-mails, faxes and angry phone calls."
In the grand scheme of thousands of pieces of mail, our one little meeting with the congressman does not have that much overall affect. BUT- it did show them that there is another side. And it made me realize that it's not THAT hard to go meet with members of Congress and tell them, "Social Security is not going to be giving me the benefits I deserve by the time I collect $ - give me the choice for personal accounts!!"
S4 needs to get out there and make their voices heard! True, we're competing against HUGE anti-personal accounts organizations, like AARP, but the fact that we're young and in favor of this issue makes us stand out more when we actually DO make an effort to call our Congressmen or send them a letter or visit them personally.
The Congressmen Will and I visited from North Carolina are not necessarily going to be the congressional members bringing the actual legislation to the floor. They are not the top members that we would want to "target" or focus in on changing their mind...but they are members of Congress, and they have a vote. It is our job to make them aware that young people everywhere want personal accounts! Senior citizens will not be affected by reform, so listen to US, the ones truly affected!
Posted by Evan Dent| Comments (1)
Saving For Retirement
November 29th 11:59:43 AM
Check out Cato's Michael Tanner discussing Baby Boomers savings on CNBC.
Posted by Chris Schrimpf| Comments (0)
November 23rd, 2005S4 published in Philadelphia Inquirer
November 23rd 03:14:07 PM
Patrick Wetherille got his Letter to the Editor published in the Philadelphia Inquirer!!! He calls on Congress to "step up on the [Social Security] issue". Read his Letter to the Editor below!
Gerlach, step up
In recent months, U.S. Rep. Jim Gerlach (R., Pa.) has stood against President Bush's plan to overhaul Social Security. While it is up to the congressman to decide whether personal retirement accounts will benefit the system, it is deplorable that instead of proposing an alternative approach, he has dodged the issue entirely. If you look at his Web site, Social Security is not even listed as an issue.
As a young person, I find this very troubling, as a system that will soon be running enormous deficits and that will be unable to pay promised benefits has been largely ignored by several members of Congress, including Gerlach.
I implore him and his colleagues to step up on this issue and work out some sort of Social Security reform, whatever that may turn out to be. While many may disagree on what the optimal solution is for our ailing retirement system, we can all agree that it does have serious problems that need to be addressed. If we address those problems now, we can lessen the blow the crisis will have on my generation later. If we fail to do so, the guilt of lumping an enormous burden on this nation's children will fall on those members of Congress who failed to act now, including Jim Gerlach.
Patrick Wetherille
Haverford College senior
Cofounder, Students for Saving Social Security
Patrick@SecureOurFuture.org
Posted by Jo Jensen| Comments (0)
November 21st, 2005Look Who Got Published!
November 21st 10:43:51 AM
S4's Nicola Moore with very good letter to the editor in the Boston University newspaper:
"The staff editorial ('Mortgaging the Future,' page 6, Nov. 17) is correct to say that young people need to get serious about Social Security reform before it is too late, but the editorial board didn't give us much of a reason to care. It's true that the Social Security system will be bankrupt in 40 years and, without reform, our generation will never collect a benefits check, but that makes it hard to care about something that represents nothing.
Something young people can get behind is reform through the creation of personal accounts. With personal accounts, a portion of would-be Social Security taxes are returned to young workers to invest in stocks or bonds, and the accounts promise a host of improvements over the current system. For one, they guarantee individuals will receive retirement benefits because individuals own their account and can increase their nest egg through investment. For another, it gives our generation more control: We can choose where we want to invest our money, choose when we want to retire and choose to leave the balance of our retirement accounts to our heirs if there is money left over after we die.
The onus for Social Security reform lies with us, and if we let our leaders know we are serious about our future, we can direct the Social Security policy debate. Without reform we will be left with the same thing too many young voters did on Election Day: nothing."
Posted by Chris Schrimpf| Comments (0)
November 18th, 2005Americans Against the Raid Growing Stronger
November 18th 01:56:51 AM
Momentum is gaining for Americans Against the Raid. In the past week we've had several new partners:
The Club For Growth
60 Plus
State Policy Network
With a vote looming next week we still need lots more signatures on the petition, make sure to sign it and send to all your friends.
Posted by Chris Schrimpf| Comments (4)
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