Young Democrats to Rob Simmons: We Won’t Be Dead in 2042
(Hartford, January 12, 2004) Outraged over Rob Simmons’ front page statement in the Washington Post that Social Security reform should be delayed because he’d be dead by the time it runs dry, the Connecticut Young Democrats today demanded he apologize for the statement and stop flip-flopping on yet another important issue. (Read the full press release)
Press Release from the Connecticut Democrats
Act Now and Demand Rob Simmons represent the young citizens of Connecticut and the nation on Social Secuity: Write a letter to the editor to express your opinion on Rob Simmons recent comments.
E-Mails: Courant - letters@courant.com, CT Life - nthompson@ctlife.net, New Britain Herald - editor@newbritainherald.com, CT Post - direct link, The Day - direct link, Shore Publishing Newspapers - news@shorepublishing.com
Journal Inquirer -letters@journalinquirer.com
E-Mail Simmons Directly: http://www.house.gov/simmons/email.html
posted by Kerry @ 4:25 PM
3 comments
3 Comments:
Why the outrage? Sure, Simmons might not have chosen his words carefully, but he's against the Administration's Social Security privitization/phase-out plan. He's on OUR side! To ask for his stance is absurd, since he has already stated it. As Josh Marshall (www.talkingpointsmemo.com) calls him, a "Loud and Proud" opponent of the administration's plan.
This letter reeks of partisan politics. We should look within our own party and our own state and ask Joe Lieberman why he hasn't stated his position.
This is an issue that will have great impact on the youth of this nation, and we should know where our lawmakers stand.
Has Lieberman drifted too far to the right for this state to tolerate? We'll find out in two years. For now, I'd lie know where do you stand, Joe?
After reading Josh Marshall in December, I spoke at length with a staffer in Senator Lieberman's DC office and then received the following (rather long) constituent letter in follow-up:
"Thank you for contacting me regarding your concerns about the future of Social Security. It was good to hear from you.
Social Security is a critical source of support for all retired Americans, present and future, and one of the best expressions of the shared values that truly make us a community. The payments Social Security provides are essential; the peace of mind and stability that go along with the money, no economist can quantify. It has been a lifeline to the elderly, to wives and husbands who have lost a spouse, to children who have lost a parent, and to the disabled.
Social Security continues to face projected long-range financial problems. Currently, the Social Security tax income exceeds program expenditures; however, the system is projected to begin running cash flow deficits in 2018, with insolvency projected to occur in 2042. The government has never defaulted on the bonds it records to its trust funds, but the magnitude of future claims has made many question where the government will obtain the money to cover them.
On February 25, 2004, Alan Greenspan, chairman of the Federal Reserve, testified before the House Budget Committee on these conditions, as well as potential proposals to address them. The cost-containment measures he offered included raising the retirement age above 67 and slowing the rate at which benefits are adjusted for inflation. These cuts are not the only changes which have been recommended; creation of a Social Security “lockbox” and privatization of the Social Security system have also been suggested.
I strongly support the obligation our government made to those who paid into Social Security funds during their working years. Social Security is a promise that cannot be broken and a commitment that cannot be compromised. For more than a half century, American men and women have invested their hard-earned dollars in the promise that is Social Security. However, the “entitlement gap” the country is facing is a dire problem that cannot be ignored. The cost of the benefits the government has guaranteed the public far exceed the entire net worth of the United States. In order to address this, we must expand our conventional political dialogue so we can put ourselves in a position of fiscal strength to grapple with the growing crisis of Social Security.
The government’s current system of accounting for spending and taxation, regrettably, gives the American people far less than the full, fair, and fiscally responsible approach to the federal budget they deserve. On October 21, 2003, I introduced legislation that moves us away from a system that looks at annual revenues and expenditures – ignoring the future impacts of the spending and tax decisions we make today. One aspect of this bill, the Honest Government Accounting Act (S. 1915), ensures that the government accurately accounts for its future costs by calculating the amount it needs to be set aside today to meet future obligations. By creating a context in which the nation’s fiscal agenda decisions will be made, this legislation is the necessary first step in addressing the “entitlement gap.” Once we have an understanding of the true magnitude of our liabilities, my colleagues in Congress and I can make informed decisions on legislative proposals, such as lockbox provisions, privatization, and the options offered by Chairman Greenspan.
I look forward to working with the Bush Administration and my colleagues in Congress to craft bipartisan legislation that will ensure public confidence in Social Security's ability to meet its long-run commitments to retirees and members of their families. However, some of the proposed corrective actions are unacceptable.
On March 21, 2002, I joined with my colleagues in introducing a Senate resolution that called for a rejection of the cuts in guaranteed Social Security benefits proposed by President Bush's Commission to Strengthen Social Security. One of the Commission’s proposals would cut benefits by more than 45 percent in 2075, according to the Social Security Administration's own chief actuary. Keep in mind that current payments to retirees yield an $845 average monthly benefit, or a little more than $10,000 a year per retiree. The resolution makes clear that such a substantial reduction would be a serious threat to the very nature of the system and to the lives of tens of millions of future senior citizens.
It appears that the President will propose reforms to Social Security that include a form of privatization, which I am concerned is not a sound approach. The President’s plan requires $1 to $2 trillion up front, an infusion of money we do not have. I am worried that these alternatives would hasten Social Security's insolvency, instead of helping to fix it. I am committed to safeguarding the Social Security safety net for seniors. The system needs to be reformed and I am open to proposed solutions. But on its face, the President’s vision for fixing Social Security appears to cost too much, and could jeopardize Social Security for participants by funneling safety net investments into sometimes unreliable markets.
Social Security is currently running surpluses. Instead of setting this money aside for future obligations, these funds are often used for general expenditures. In exchange, the Social Security Trust Fund gets an “IOU.” In the past I have supported, as well as cosponsored, legislation that would establish a Social Security “lockbox.” A lockbox would take Social Security “off-budget,” which effectively blocks the use of its funds for purposes other than Social Security.
My official Senate web site is designed to be an on-line office that provides access to constituent services, Connecticut-specific information, and an abundance of information about what I am working on in the Senate on behalf of Connecticut and the nation. I am also pleased to let you know that I have launched an email news update service through my web site. You can sign up for that service by visiting http://lieberman.senate.gov and clicking on the "Subscribe Email News Updates" button at the bottom of the home page. I hope these are informative and useful.
Thank you again for letting me know your views and concerns. Please contact me if you have any additional questions or comments about our work in Congress."
Guaranteed Social Security Benefits: Make It So
The comically complicated PSA (Personal Savings Account) legislation bouncing around Congress will raise taxes, increase investment risk, and expand the size of government. Let's stop applying Band-Aids to spouting arteries. We are looking for a guaranteed retirement benefit program, and organizations capable of providing one. Additionally, we want the new program to reduce taxes, create jobs, boost the economy, cut prices, and increase salaries. Difficult? Not really.
This is the conceptual outline of a five-year implantation plan, a starting point for the brainstorming needed to develop the nitty-gritty details, rules, regulations, laws, and agencies. All that is needed is the will to change things productively. Politicians like to debate changes to determine why new ideas can't be implemented. Here's a plan that must be implemented. Have a listen, throw out an incumbent, and protect your future.
Guaranteed benefit programs have been around for over 100 years, and millions of people throughout the world enjoy the benefits they provide. Here's how they do it. Every month, they deposit money into a trustee-managed investment account. The money avoids the stock market (for the most part), index funds, commodities, or MLM-like derivatives and is carefully invested in high quality debt securities, many privately placed for better yields.
All earnings are reinvested in similar securities, and the fund eventually produces more in earnings than the participating investors contribute; the trustee manages the portfolio. At retirement, the deposits stop and the guaranteed benefits begin. The benefit is guaranteed for life--- extraordinary concept, older and wiser than any living congressman or presidential candidate.
What if, instead of donating 7.6% of your salary (15.3% if you are self employed) to support the war de jour: (a) you could choose to deposit from 3% to 5% of your salary in a guaranteed retirement program maturing anytime after age 60, (b) the lifetime benefit is totally income tax free, and (c) your employer uses his savings to either create jobs, raise non-executive salaries, reduce prices, or increase shareholder dividends. Interested?
The SSRIA (Social Security Retirement Income Annuity) is a new and improved version of the ancient Deferred Fixed Annuity--- a boring but guaranteed fixed-amount-only retirement vehicle. (Wrong, I don't sell annuities--- they just happen to be the perfect Social Security problem solver.) There are a bunch of new wrinkles: (1) The minimum contribution is mandated for all employed persons, but anyone with a Social Security number can have a SSRIA.
(2) Qualified (15 years of Fixed Annuity experience) SSRIA providors are assigned to participants randomly by SS#--- only one per participant, per lifetime, please. Since the "qualified-by-qualified-people" providor companies have no acquisition, retention, or advertising expenses, there are no sales commissions; administrative expenses and investment management fees are capped at .5% of the total fund Working Capital.
(3) All SSRIA contracts, regardless of provider, will contain the same terms, interest guarantees, retirement benefit choices, and pre-retirement death benefits, thus eliminating any incentives for internal fraud and manipulation of statistics.
(4) Qualified providers will establish separate tax exempt, "mutual" subsidiaries to manage and control operations, assuring that profits are distributed to contract holders. Profits are allocated 50% to active contract holders and 50% to a health insurance trust fund for retired participants (HITF). (5) All providers will use the same mortality, investment earnings, and expense assumptions in their annuity benefit calculations, and only Life and Life + One Annuities are available. (6) Benefit payments will be jointly guaranteed by the parent companies and the Federal Pension Benefit Guarantee Corporation. Parent Company income taxes would be reduced by 50%.
Implementation would be completed over a five-year period, and interpreted with an "intent of the law" bias:
In Year One, the Federal Government would purchase single premium SSRIAs for all active Social Security recipients--- hey, they squandered the money. Also in year one: (1) all employee and employer contributions would be cut by 25% (the first of four such annual cuts) and deposited to individual SSRIAs. (2) All Federal, State and Local income taxes on SSRIA payments would be declared illegal and forever prohibited. (3) A private company would be chartered to audit the disposition of corporate tax savings within all public companies and private companies employing 10 or more persons 18 months before enactment.
In Years Two through whenever, the Federal Government would add to retiring persons SSRIAs to bring the annuity benefit to the level guaranteed by the OASI plus COLAs. Once an equalization level is achieved, federal responsibility would cease for that retiree.
In Years Three through Five, all Federal, State and Local Income taxes on all forms of private retirement accounts (IRA, 401(k), 403(b), etc.) would be reduced by one third per year, and would be declared forever illegal at the end of year Five. A Federal Sales Tax of 1% or 2% (on all final-product-sales, not a VAT) could be enacted after the second year's cut. From Year Three forward, SSRIA holders would be able to view their projected monthly benefit at various retirement ages, based on contract provisions and their deposit and earnings history.
By the end of the Year Five: (1) Employers would have no Social Security tax responsibilities, but would be responsible for either employing more people, reducing their product prices, raising non-executive salaries not subject to the minimum wage, or paying higher dividends to shareholders. Any manipulations of their operations or executive compensation packages clearly intended to circumvent the intent of these reforms would be fined appropriately within the Board of Directors, senior officers, and legal council of the Company--- personally, and in each capacity.
That's right, if a senior officer is also on the Board, and responsible for controlling jobs, product prices, or dividends, he or she would be personally responsible for three separate fines. (2) Employees would select their level of salary deduction for year six; the election can be changed once in any twelve-month period. No employee can contribute more than the maximum 5% of salary to an SSRIA.
Of course there are a lot of ifs, ands, and buts in here, but it is a clearly doable program within an established professional infrastructure. It will increase jobs, reduce taxes, boost the economy and reduce the role of government--- in 50,000 less words and 25 fewer years than any approach even being considered in Congress.
Make it so--- yeah, you!
Steve Selengut
http://www.sancoservices.com
http://www.kiawahgolfinvestmentseminars.com
Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"
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