Nbadan
01-04-2005, 02:17 AM
Social Security Formula Weighed
Bush Plan to Cut Promised Benefits
By Jonathan Weisman and Mike Allen
Washington Post Staff Writers
Tuesday, January 4, 2005; Page A01
The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.
Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker's lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century.
<snip>
"This is going to be very much like sticking your hand in a wasp nest," said David C. John, a Social Security analyst at the conservative Heritage Foundation and an ally of the president. "And the reaction will be similar."
<snip>
The change would save trillions of dollars in scheduled expenditures and solve Social Security's long-term deficit, but at a cost. According to the Social Security Administration's chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would fall by more than a quarter. A retiree in 2075 would receive 54 percent of the benefit now promised...
Washington Post (http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics)
So if we do nothing with Social Security retirees will still get 81% of their promised benefits from 2052 onwards, but using W's proposed 'privatization plan' you'll only get 75% from 2042 onwards.
Nice.
Bush Plan to Cut Promised Benefits
By Jonathan Weisman and Mike Allen
Washington Post Staff Writers
Tuesday, January 4, 2005; Page A01
The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.
Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker's lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century.
<snip>
"This is going to be very much like sticking your hand in a wasp nest," said David C. John, a Social Security analyst at the conservative Heritage Foundation and an ally of the president. "And the reaction will be similar."
<snip>
The change would save trillions of dollars in scheduled expenditures and solve Social Security's long-term deficit, but at a cost. According to the Social Security Administration's chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would fall by more than a quarter. A retiree in 2075 would receive 54 percent of the benefit now promised...
Washington Post (http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics)
So if we do nothing with Social Security retirees will still get 81% of their promised benefits from 2052 onwards, but using W's proposed 'privatization plan' you'll only get 75% from 2042 onwards.
Nice.