Graham, Paul, and, Lee Introduce Plan for Social Security Reform

[coyotes_geek]

CG: Some reasonable recommendations in here to help bring SS back into line IMO. Indexing the retirement age to longevity makes a lot of sense. The combination of no new taxes and reduced benefits for high earners also seems like a reasonable compromise between our two political factions.

********************

Graham, Paul, and, Lee Introduce Plan for Social Security Reform

WASHINGTON – U.S. Senators Lindsey Graham (R-South Carolina), Rand Paul (R-Kentucky), and Mike Lee (R-Utah) today introduced new legislation addressing major funding issues facing Social Security in the coming years. The Senators noted their plan, Social Security Solvency and Sustainability Act, achieves sustainable solvency for the Social Security system without any tax increases.

What the plan accomplishes:

Reduces debt held by the public by $6.2 trillion by 2085.

Eliminates the current difference of $5.4 trillion between benefits promised and what Social Security can actually pay.

Creates a solvent and sustainable Social Security system that will be able to provide the benefits it promises to future generations without raising taxes.

Gradual Increase in the Social Security Retirement Age – The senators propose a gradual increase in the Social Security full retirement age to 70 by 2032.

Indexing the Retirement Age to Longevity – When retirement age of 70 is achieved, the full retirement age will then be indexed to increases or decreases in life expectancy. Indexing will help maintain a constant ratio of years worked to years spent in retirement. (see attached chart detailing current law and Social Security Solvency and Sustainability Act retirement age)

Gradual Increase in the Early Retirement Age – The senators propose a gradual increase in the Social Security early retirement age from 62 to 64 by 2028.

Slower Benefit Accumulation for Higher Lifetime Earners – After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth. Above $43,000, benefits will be calculated based on price growth.

“Social Security is coming unraveled and it must be preserved,” said Senator Graham. “Our plan saves Social Security and will be significant down-payment on comprehensive entitlement reform. I’ve been involved in Social Security reform since my election to the Senate in 2002. I’m quite familiar with the scare tactics and know first-hand the demagoguery that is sure to come our way. But the American people know the problems facing Social Security are real and must be addressed. Every year we delay, the solutions get more difficult and the consequences of inaction become more dramatic. It’s time for action.”

“This plan fully fixes the shortfall in the Social Security program, ensuring that the promises we make today can and will be kept. It gradually implements changes everyone knows need to be made,” Senator Paul said. “If we wait a few years, the fixes will have to be more drastic and less thought-out and gradual. I urge anyone who wishes to join this discussion to do so by bringing forward their own plan that fully fixes our Social Security system for the next 75 years or more.”

“Our proposal addresses the coming Social Security deficit in a responsible way without raising taxes,” said Senator Lee. “These ideas should be part of the larger debate over entitlement reform that we will have in the coming months. For those who might oppose these solutions, I look forward to hearing their ideas to make Social Security solvent and sustainable as the discussion goes forward.”

http://www.randpaul2010.com/2011/04/sen-paul-unveils-social-security-solvency-and-sustainability-act/

[CosmicCowboy]

Slower Benefit Accumulation for Higher Lifetime Earners – After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth. Above $43,000, benefits will be calculated based on price growth.

I don't understand this part...

[TeyshaBlue]

Yeah, that's not too clear to me either.

[MannyIsGod]

It basically sets up a tiered system of calculating how much you get from the program. There will be dimishing returns the more you make.

I don't understand the specifics of what it means, but I get the concept.

[coyotes_geek]

Yeah that wording is a little confusing. On the page I linked in the OP there's another link to a PDF fact sheet (link provided below) and the wording is different. See last bullet.

http://www.randpaul2010.com/wp-content/uploads/2011/04/041311-Fact-Sheet-Social-Security.pdf

The impression I got was that the percentage of your income above $43k you'd get will be less than the percentage of your income below $43 that you'd get. Whereas today you just get whatever percentage of your total income. (Note: the actual formula for calculating your benefit isn't nearly that simple though. I actually tried to figure it out once and it made my head hurt.)

[Wild Cobra]

I don't understand this part...

Social Security is capped by the amount you pay in. The top retirement rate I think would be hit if you earned the 43K annual when you retired.

[boutons_deux]

UCA has the worst wealth inequalty of any industrial country, the shittiest safety net, and the shittiest public pension plan. BUT BUT BUT, It's The Greatest Country in The Universe.

These Repugs have every intention of fucking up Soc Sec to that anything govt is fucked up.

[CosmicCowboy]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.

[SnakeBoy]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.

See, you understand it just fine.

[coyotes_geek]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.

We're all going to get fucked to some degree.

[MannyIsGod]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.

:lol

Dude after all the shit you've talked about how your generation is fucking mine with SS I had to literally LOL at this.

[CosmicCowboy]

I'm glad I could amuse you Manny. The point was your progressive idealism is fiscally unsustainable.

[LnGrrrR]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.

Weren't you arguing that public unions should reduce their benefits/rates?

[LnGrrrR]

I'm glad I could amuse you Manny. The point was your progressive idealism is fiscally unsustainable.

Which is the point of this plan. It makes a lot of intuitive sense; I'm hoping someone will crunch the numbers to doublecheck proposed gains.

[RandomGuy]

I don't understand this part...

It is a bit obtuse. I will dig into it, and see if I can figure it out, and flesh it out, but Manny nailed the essence, I'm sure.

[RandomGuy]

1 to which this subparagraph applies by reason of clauses
2 (iii) or (iv) of subparagraph (A) shall be a percentage
3 equal to such percentage multiplied by the quotient ob4
tained by dividing—
5 ‘‘(I) the difference of the maximum CPI-in6
dexed benefit amount for such year over the amount
7 determined under this paragraph for an individual
8 whose average indexed monthly earnings are equal
9 to the amount established for purposes of subpara10
graph (A)(ii) for such year, by
11 ‘‘(II) the difference of the maximum wage-in12
dexed benefit amount for such year over the amount
13 determined under this paragraph for an individual
14 whose average indexed monthly earnings are equal
15 to the amount established for purposes of subpara16
graph (A)(ii) for such year.

um... what the fuck... wow.

So much for digging into the details.

[Marcus Bryant]

It doesn't solve the core problem which is that the program was meant to provide a minimum income guarantee in retirement/old age, rather than be a comprehensive retirement program. A point of compromise would seem to be to means test SS and turn it into a welfare program, rather than this one size fits all cluster. A scaled down version which provided benefits to those who need the minimum guarantee rather than those who use the benefits to buy their grandkids toys or blow it on Bingo would make too much sense to actually happen.

Otherwise we have the inequity of working class individuals taxed on their first dollar of earnings to pay wealthy retirees.

[TeyshaBlue]

lolz. Legispeak sucks.

[MannyIsGod]

I'm glad I could amuse you Manny. The point was your progressive idealism is fiscally unsustainable.

:lol

No it wasn't. The point to your post was that you were getting screwed. Its all fun and games until you're the one gabbing your ankles.

As for THIS post, there are plenty of countries around the world that have very progressive governments and are in better situations than us.

[LnGrrrR]

It doesn't solve the core problem which is that the program was meant to provide a minimum income guarantee in retirement/old age, rather than be a comprehensive retirement program. A point of compromise would seem to be to means test SS and turn it into a welfare program, rather than this one size fits all cluster. A scaled down version which provided benefits to those who need the minimum guarantee rather than those who use the benefits to buy their grandkids toys or blow it on Bingo would make too much sense to actually happen.

Otherwise we have the inequity of working class individuals taxed on their first dollar of earnings to pay wealthy retirees.

Right, but that's a political non-starter. That plan would never get passed without gradual steps like this one.

[MannyIsGod]

It doesn't solve the core problem which is that the program was meant to provide a minimum income guarantee in retirement/old age, rather than be a comprehensive retirement program. A point of compromise would seem to be to means test SS and turn it into a welfare program, rather than this one size fits all cluster. A scaled down version which provided benefits to those who need the minimum guarantee rather than those who use the benefits to buy their grandkids toys or blow it on Bingo would make too much sense to actually happen.

Otherwise we have the inequity of working class individuals taxed on their first dollar of earnings to pay wealthy retirees.

Um, SS is a pretty bare bones retirement instrument. If you're arguing that it doesn't need to be given to everyone, I can somewhat buy that but I don't think that we can argue that SS benefits are plush by any stretch of the imagination. The problem as more to do with population changes than anything else.

[Marcus Bryant]

Um, SS is a pretty bare bones retirement instrument. If you're arguing that it doesn't need to be given to everyone, I can somewhat buy that but I don't think that we can argue that SS benefits are plush by any stretch of the imagination. The problem as more to do with population changes than anything else.

Where did I claim they were "plush"?

The point is that they should go to those who need them, rather than those who don't. Of course, the reason they go to all is to buy votes.

[RandomGuy]

Slower Benefit Accumulation for Higher Lifetime Earners – After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth. Above $43,000, benefits will be calculated based on price growth.

Ok, here is what I got:

Your benefits are based generally on lifetime average wages.

If that average is at or below 43,000 then it is calculated as it was before, subject to certain caps.

If that average gets above 43,000, then the average wage starts getting multiplied by a fraction (less than one) based on the CPI.

Hope that helps.

(edit: higher CPI = higher/faster accumlation of benefits)

[LnGrrrR]

Um, SS is a pretty bare bones retirement instrument. If you're arguing that it doesn't need to be given to everyone, I can somewhat buy that but I don't think that we can argue that SS benefits are plush by any stretch of the imagination. The problem as more to do with population changes than anything else.

Are old people having babies so they can get TWO free slushies?

[MannyIsGod]

Where did I claim they were "plush"?

The point is that they should go to those who need them, rather than those who don't. Of course, the reason they go to all is to buy votes.

I may have inferred what you meant incorrectly because I wasn't clear which is why I stated "if".

In any event, I don't disagree with this post but I also think its a political non starter.

[boutons_deux]

"significant down-payment on comprehensive entitlement reform. "

There He Goes Again. SS is not an Orwellian, criminalizing "entitlement".

You pay money in, you get YOUR MONEY out. You are "entitled" to it, you deserve it, because it's YOURS, not somebody else's money that you don't deserve, which is what entitlement in the mouths of the Repugs and conservative always implies.

And federal unemployment insurance is not another nasty entitlement. It's insurance.

[ChumpDumper]

I'm pretty sure since I have contributed the max I stand to get fucked in that deal.You might have to sell a golf cart.

[Winehole23]

Ouch.

[TeyshaBlue]

You might have to sell a golf cart.

Oh, the humanity.

[LnGrrrR]

I guess all the people whose jobs are being lost through budget cuts are getting "screwed" also.

[Viva Las Espuelas]

As for THIS post, there are plenty of countries around the world that have very progressive governments and are in better situations than us.
And which countries are those? Better situations, how?
If they were so "better" than why did "progress"ives go into hiding here? Wasn't it a "progress"ive that brought about Prohibition? The Noble Experiment. That worked out great.



Also, SS initially was SSI. I stood for Insurance, so.......

[CosmicCowboy]

You guys are real comedians. I'm just saying that when you pay the max into it for 50 years and they then change the rules where you don't get it back it hardly seems equitable. Might as well just do away with it entirely and just take regular tax money from the "ants" and give it to the "grasshoppers" that didn't save for retirement.

[coyotes_geek]

"significant down-payment on comprehensive entitlement reform. "

There He Goes Again. SS is not an Orwellian, criminalizing "entitlement".

You pay money in, you get YOUR MONEY out. You are "entitled" to it, you deserve it, because it's YOURS, not somebody else's money that you don't deserve, which is what entitlement in the mouths of the Repugs and conservative always implies.

And federal unemployment insurance is not another nasty entitlement. It's insurance.

If that were true, then SS wouldn't be set up like the ponzi scheme that it is. Everybody would have an individual account, everybody's individual contributions would go into that individual account and everybody could start withdrawing money from that individual account when they hit the retirement age.

[Galileo]

I thought republicans loved the rich? You mean rich people would get less benefits than the poor or middle class?

[RandomGuy]

You guys are real comedians. I'm just saying that when you pay the max into it for 50 years and they then change the rules where you don't get it back it hardly seems equitable. Might as well just do away with it entirely and just take regular tax money from the "ants" and give it to the "grasshoppers" that didn't save for retirement.

Heh, we only tease because we like ya.

For the most part we all know the entitlements will have to change, and most proposed changes won't affect the people like you that have paid into the system the longest.

That is only fair, and as much as I think the system needs changing would not throw my support behind anything that would change the benefits at the last minute for you.

That said, it is a *lot* easier for people in the upper income brackets to stay there and to have enough saved up. It takes money to make money, and if you have to spend most of your income on the basics like shoes for the kids, food, and so forth, that doesn't leave a lot left over to chunk into an IRA.

I am *acutely* aware of that at the moment, being far behind the eight ball when it comes to that. I have told the wife that even though our income is rising, our standard of living will have to stay about where it is for the rest of our lives to make sure enough is saved up.

Most people my age (40) and younger aren't quite as cognizant about just how much they will have to have, and how little these programs will actually be able to pay out when we get close.

My rough estimate is that one has to have a minimum of $2M saved up at 65 to be able to kick back at a very modest standard of living. If one has less than that, expect to be working well beyond that point.

[RandomGuy]

And which countries are those? Better situations, how?
If they were so "better" than why did "progress"ives go into hiding here? Wasn't it a "progress"ive that brought about Prohibition? The Noble Experiment. That worked out great.



That's a bit like saying Duncan is a shitty player because he missed a free-throw.

Not buying it. Are all your arguments this weak?

[CosmicCowboy]

Heh, we only tease because we like ya.

For the most part we all know the entitlements will have to change, and most proposed changes won't affect the people like you that have paid into the system the longest.

That is only fair, and as much as I think the system needs changing would not throw my support behind anything that would change the benefits at the last minute for you.

That said, it is a *lot* easier for people in the upper income brackets to stay there and to have enough saved up. It takes money to make money, and if you have to spend most of your income on the basics like shoes for the kids, food, and so forth, that doesn't leave a lot left over to chunk into an IRA.

I am *acutely* aware of that at the moment, being far behind the eight ball when it comes to that. I have told the wife that even though our income is rising, our standard of living will have to stay about where it is for the rest of our lives to make sure enough is saved up.

Most people my age (40) and younger aren't quite as cognizant about just how much they will have to have, and how little these programs will actually be able to pay out when we get close.

My rough estimate is that one has to have a minimum of $2M saved up at 65 to be able to kick back at a very modest standard of living. If one has less than that, expect to be working well beyond that point.

I agree with your 2 million number if you play fair and are reasonably healthy. Forget any long term end of life care help from medicare unless you are penniless. I've already told my wife I'm probably gonna have to work at least until 70 for our numbers to work.

[LnGrrrR]

If that were true, then SS wouldn't be set up like the ponzi scheme that it is. Everybody would have an individual account, everybody's individual contributions would go into that individual account and everybody could start withdrawing money from that individual account when they hit the retirement age.

I believe that was the original plan of SS.

[LnGrrrR]

You guys are real comedians. I'm just saying that when you pay the max into it for 50 years and they then change the rules where you don't get it back it hardly seems equitable. Might as well just do away with it entirely and just take regular tax money from the "ants" and give it to the "grasshoppers" that didn't save for retirement.

Well, I think they'll introduce it in some sort of "grandfather" method, and not just all at once. That said, if changes are going to be made to the SS, it's going to screw someone over. Again, look at the public unions, and all the conservatives who were saying that they should voluntarily give up their benefits. Same idea.

[Drachen]

Pretty much all of this seems common sensical. I have thought for a very long time that an indexed retirement age makes more sense. Also, it would seem that the 43k number must also be indexed to avg cost of living or some such thing. A fiscally conservative republican (or democrat, etc)!!!!???!!! I am confused.

[Viva Las Espuelas]

That's a bit like saying Duncan is a shitty player because he missed a free-throw.

Not buying it. Are all your arguments this weak?

Oh, hello Porfessor Lambeau. Well, Duncan is part of the team and not really the team, as to what I was asking. "progress"ives, not a "progress"ive. Thanks for playing though.

Are all your assumptions this bad?

[ElNono]

70 years old??? Life expectancy in the US is right now 75-80... You break your back and chip in for 50+ years and you only get 5-10 out of it?

Not to mention that who's hiring 65+ years olds out there to good to great paying jobs(*)?

* Bankers and CEOs need not apply

[coyotes_geek]

70 years old??? Life expectancy in the US is right now 75-80... You break your back and chip in for 50+ years and you only get 5-10 out of it?

Yep. It sucks. But we're well beyond the point where decisions about SS can be made based on what's perceived to be "fair" or a "good deal" for individuals. This has become an actuarial problem in need of an actuarial solution. Tough shit for us, everyone should plan accordingly.

[boutons_deux]

"This has become an actuarial problem in need of an actuarial solution."

Big Fucking Lie

The federal govt borrowing SS fund to pay for govt has been a POLICY decision that can be reversed.

What the Repugs are saying now is that the fed govt must DEFAULT on its loans from SS and make Human-Americans poorer.

So, in Repug/VRWC world, the Feds/Fed won't ever default on its US treasury bonds (aka loans borrowed from) held by Wall St Corporate-Americans, but it will default default on loans from Human-Americans' SS account.

[CosmicCowboy]

"This has become an actuarial problem in need of an actuarial solution."

Big Fucking Lie

The federal govt borrowing SS fund to pay for govt has been a POLICY decision that can be reversed.

What the Repugs are saying now is that the fed govt must DEFAULT on its loans from SS and make Human-Americans poorer.

Obama just said today it could all be fixed with tax increases on the wealthy and he wasn't touching SS, Medicare, or Medicaid. Good luck with that.

[coyotes_geek]

"This has become an actuarial problem in need of an actuarial solution."

Big Fucking Lie

The federal govt borrowing SS fund to pay for govt has been a POLICY decision that can be reversed.

What the Repugs are saying now is that the fed govt must DEFAULT on its loans from SS and make Human-Americans poorer.

Human americans are going to eat that $6 trillion in one form or another. It's unavoidable. Paying back social security just means that money has to be taken from somewhere else.


So, in Repug/VRWC world, the Feds/Fed won't ever default on its US treasury bonds (aka loans borrowed from) held by Wall St Corporate-Americans, but it will default default on loans from Human-Americans' SS account.

Neither party is going to allow a default on a treasury bond held by anyone other than the taxpayers. democrats = republicans.

[Wild Cobra]

Pretty much all of this seems common sensical. I have thought for a very long time that an indexed retirement age makes more sense. Also, it would seem that the 43k number must also be indexed to avg cost of living or some such thing. A fiscally conservative republican (or democrat, etc)!!!!???!!! I am confused.
Actually, I'm confused as what they mean too. Nobody called me out on it, but my own answer is likely in error.