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.
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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 Ac ulation 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 en lement 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 en lement 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/...inability-act/
I don't understand this part...Slower Benefit Ac ulation 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.
Yeah, that's not too clear to me either.
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.
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-conte...l-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.)
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.
Last edited by Wild Cobra; 04-14-2011 at 11:05 AM.
UCA has the worst wealth inequalty of any industrial country, the tiest safety net, and the tiest public pension plan. BUT BUT BUT, It's The Greatest Country in The Universe.
These Repugs have every intention of ing up Soc Sec to that anything govt is ed up.
I'm pretty sure since I have contributed the max I stand to get ed in that deal.
See, you understand it just fine.
We're all going to get ed to some degree.
Dude after all the you've talked about how your generation is ing mine with SS I had to literally LOL at this.
I'm glad I could amuse you Manny. The point was your progressive idealism is fiscally unsustainable.
Weren't you arguing that public unions should reduce their benefits/rates?
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.
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.
um... what the ... wow.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.
So much for digging into the details.
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.
lolz. Legispeak sucks.
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.
Right, but that's a political non-starter. That plan would never get passed without gradual steps like this one.
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.
Ok, here is what I got:Slower Benefit Ac ulation 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.
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 ac lation of benefits)
Are old people having babies so they can get TWO free slushies?
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.
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