Obama to Answer questions from the 99er's And CBS Katie Couric opens New show, American Voice

Interesting article about this weeks Internet broadcast from the White House, And CBS

http://zennie2005.blogspot.com/2010/10/99ers-obama-seeking-questions-katie.html?spref=tw

Wow, us 99ers cant hold a candle to the Senior Lobby, Congress is not even in session and Madame Speaker is announcing a vote for a SS COLA (while there is no inflation to speak of) vs. months of 99er petitioning which gets only a dog and pony show in the Senate at the 11th hour (with no success) . (Not to mention that the article says that the Senate may not even vote for this thing) .

Lets hope we get more than this pre-election pandering out of the lame duck session this fall.

http://news.yahoo.com/s/ap/us_social_security_no_cola

sc4ram wrote:Wow, us 99ers cant hold a candle to the Senior Lobby, Congress is not even in session and Madame Speaker is announcing a vote for a SS COLA (while there is no inflation to speak of) vs. months of 99er petitioning which gets only a dog and pony show in the Senate at the 11th hour (with no success) . (Not to mention that the article says that the Senate may not even vote for this thing) .

Lets hope we get more than this pre-election pandering out of the lame duck session this fall.

http://news.yahoo.com/s/ap/us_social_security_no_cola

In spite of the fact that I'm now someone who would actually benefit from that vote, I have to say I agree with you on this one. To be clear though, they are not voting on the COLA, which is a monthly increase, but just a one-time $250 "Christmas gift" for the $58 million retirees on SS. A real COLA could be gigantic compared to this little gift, even though that still adds up to 14.5 billion by my calculations.

The problem in my eyes with this is that the bonus goes out to not only poor seniors, but also to very many wealthy seniors who simply aren't hurting in the least, and can spend their days on the golf course not thinking a bit about the absence of COLA this year. I'm for reform--SS should be treated like an insurance plan; why do millionaires need to be collecting it? This idea came up a decade or so ago and the AARP shot it down at that time.

Thanks for that Nancy. You are correct, whats being proposed is not a COLA, but is a pre-election sweetner just the same IMO.

The reason we have avoided "means testing" of SS benefits thus far is in order for Social Security to be widely accepted (ie most people would agree to pay FICA taxes into it without a tax revolt) is that everybody who paid in would be elegible for benefits at retirement. If you somehow eliminated benefits for somebody who managed to accumulate $1M in their 401K (but had paid $60K in FICA taxes and their employer matched that $60K in FICA taxes), we will loose that wide acceptance within the population . (Then there would be support to kill it from the successful people in society)

Should somebody like Bill Gates be drawing Social Security? Argueably no, but I would assume in his case he wouldnt apply for benefits.

The Bush plan a few years ago was a good start IMO, it suggested that you could voluntarily put a small percentage of your contiibution into a personal account. (That way you would have the money, instead of the IOUs that are left from Congress spending all of the SS tax collections) . You would end up with a mix of benefits from your own account and the Fed pay out. The personal account would be similiar to a 401K. However our buds @ AARP and their stooges in Congress said Nooooooooooooo, cant do that, I can remember Sen Chucky Schumer saying there is noooooo problem with SS at the time. (this is after Bush promised that anybody over 50 and current beneficaries would be unaffected)

They will have to do something, because the money isnt there to pay beneficaries in the next 30 years.

sc4ram wrote:Thanks for that Nancy. You are correct, whats being proposed is not a COLA, but is a pre-election sweetner just the same IMO.

The reason we have avoided "means testing" of SS benefits thus far is in order for Social Security to be widely accepted (ie most people would agree to pay FICA taxes into it without a tax revolt) is that everybody who paid in would be elegible for benefits at retirement. If you somehow eliminated benefits for somebody who managed to accumulate $1M in their 401K (but had paid $60K in FICA taxes and their employer matched that $60K in FICA taxes), we will loose that wide acceptance within the population . (Then there would be support to kill it from the successful people in society)
...

There wouldn't be any "tax revolt" if SS were reformed to work as an insurance against old-age destitution, which was the original idea anyway. The provision of a living stipend for seniors is not simply humane, but a sane way to help society avoid massive expense and ruin from extraordinary expenses for medical, emergency care, etc., if suddenly all those on SS had no support. We've lost sight of the original intention. If SS as insurance were "sold" (it takes good marketing for any public policy change), there would be no tax revolt. In fact, most young people don't think SS will be there for them anyway, and they haven't refused to pay their SS taxes yet, at least no en masse.

Those with health insurance pay huge amounts of money every month for coverage. Is there any sense that this is "their money," that it should all come back to them (or you) if you don't get sick? No. It's insurance.

And I know PLENTY of people who absolutely don't need those benefits, but take them out anyway, simply because of the existing system and policy setup that even emphasizes the ingrained belief that SS is "your money." This was a misstep that the country at one time could afford, but now needs reform. As for putting it into private accounts (how can anyone promote that after what happened to stocks the last couple of years!), to which I'm opposed, even if such a provision were made to allow for such accounts, reforming the system to work as an insurance instead of the current system would still be a better option, since anyone losing their shirt with their dumb investments would still need that insurance against old-age destitution.

And beyond all that, any changes would be made gradually, so that current beneficiaries wouldn't be affected at all or very little. But SS is still the hot-button issue that it was a decade ago, so I don't know how much hope I have that it will be reformed reasonably anytime soon. At least not til push comes to shove on the deficit and all the other issues with the workforce economy needed to support SS in the first place.

All noble goals Nancy, however the Biggest problem I see with SS is that the money has been spent. (All of those witholding tax dollars that employees have paid and employeers have matched is gone, and IOUs put in its place). You name it, it went to DOD, DOE, DOEd, EUC , the Sen Robert J Bird memorial Post Office, earmarks etc. All of the numbers floating around saying that it is solvent until ~2038 might be correct if the money is there but it is not. LBJ had the funds put on Budget in the 60s. (In any other business this would be called a ponzi scheme and its operatives would have been arrested)

You are probably right in that there is no political will for private accounts, but I would disagree with you on their appropriateness.
The most common idea floated is that a employee could take some some small percentage of their SS witholding to a private account and invest it like a 401K in turn for a reduced SS payout at retirement. You and many of the talking heads say this is a terrible idea because the recent stock market volitility. Speaking as a 401K suscriber, when i was in the vicinity of turning 50 after I was laid off (circa 2007) I took the majority of my investment out of stocks and put it into less risky fixed investments. The result is my 401K is at pre-crash levels or higher now, and i have the money (it hasnt been confiscated by Uncle Sam and spent) . The problem with the thesis that "everybody would loose their behinds" if they were allowed to invest THEIR money, is it assumes everybody is a idiot and only the government knows whats best for you. This could be structered so investments have to phase out of the stock market when one approaches a certain age etc. Also if taylored after 401K , the money would be "dollar cost averaged" in over time (so when the market dips you are purchasing shares at a lower price and when it recovers you will have a gain and a robust return over the life of the account).

The FICA witholding that we pay returns ~2% in Treasury interest, the stock market has avaraged ~10% year since the Depression. A Private Account scenerio would not allow people to speculate (in say Enron for example) , it would offer the broad market index and choices of safe fixed income offerings (ie insured CDs, treasuries, savings bonds etc) . If we are afraid that with this scenerio that everybody would loose their retirement money in the stock market, then we shouldnt let people have matches or knives either. I doubt these will gain acceptance, (there is a institutional bias, given this thing is a ponzi scheme, the operators will resist any effort to limit new contributions, ask Bernie Madoff)

I dont know what this program is (other than the afore mentioned ponzi scheme) but it has been sold as a Pension plan. I and my employeers have paid a huge sum of money into this program. (If I had been able to invest this via a 401K vehicle instead of giving it to the Feds, it would of easily accrued into a quarter to half-million dollars) If the plan somehow is to means test it (which would result in just making it a new tax to the people affected) there will be a tax revolt. I do expect my insurance company to pay on eligible claims. Therefore I do expect that given all of the money Ive dumped into this system (that the Feds have cheerfully accepted) that i will be able to claim a benefit. Young people dont necessiarly focus on their withholding, they just look at the amount on the check (thats whay there is witholding, if they had to pay a lump sum at the end of the year there would be a revolt)

If somebody needs it or not is in the eye of the beholder. We've all seen in Florida the Ma and Pa Geezer race into Publix @ 9AM on a monday morning in their new Grand Marquis. Should their SS check be taken away and them forced to ride the bus? (I'll let you tell them that)

Speaking of tax revolts , if the proposal is to lift the income limit on FICA, increase the retirement age and means test, there will be a revolt against that as well (and I might lead it)

In the new world of hope and change, if you take a small business in California for example, their income tax rate will be 39% Fed + 12.4 SSI (includes employer contribution) 2.9% medicare + 9.3 Cal State (doesnt include the new cap gains taxes from Health CR) thats a 63.6% for the people that do most of the hiring. Thats not acceptable and not conducive to a economic growth environment. (once that is known, there will not be mass support for higher taxes to support the program)

A good place to start would be Paul Volker's (the Prez made this guy a advisor early on, I wish he would listen to him ) idea to increase the retirement age by one month every year. They shouldt be creating COLA bonus' when there is no inflation.