Talking Points Memo
Let's be clear: any plan to "reform" Social Security that eliminates the uniform guarantee of benefits is a plan to destroy Social Security. Tieing your Social Security benefits to the ups and downs of the stock market will eliminated the uniform guarantee of benefits, because some will do quite well, some will do okay, and some will be SOL.
You would think that members of the party who enacted the most successful government program ever would be fighting this Republican attack on Social Security tooth and nail.
But Harold Ford has a dream:
I dream of the day when a little girl living in a public housing community in my district can come home, and flip on the TV, and know when she sees a FedEx commercial, that not only does FedEx employ the most people in her district, but that she also owns stock in companies like FedEx, and she has a financial stake in how well the company’s doing. That she will know the harder she works, the more likely she’ll have something to own -- to be able to point to a part of America that is hers, and not just lean on America to give her something."Not just lean on America to give her something."
Mr. Ford: Social Security benefits are not "leaning on America to give us something." We pay in for today's retirees, and when we retire, tomorrow's workers pay in for us. You're a Congressman, you should understand the difference.
"Well, right now we only have 3 workers supporting every retiree..." Yes, and the program's running a surplus.
There is a simple fix to this program that extends Social Security's solvency into the next century: eliminate the ceiling on Social Security taxes. Currently Social Security taxes are paid on the first $87,000 of yearly wages. In 2005, that ceiling lifts to the first $90,000.
Get rid of the ceiling. That isn't changing the rate, and that's not a new tax. But the money raised from this one simple fix will completely fix Social Security for generations to come.
Another quick, easy fix: instead of raising the system, switch Social Security funding from a dedicated portion of payroll to a dedicated portion of income. In other words, people who earn their income from investments escape supporting the Social Security system altogether, even though they're usually eligible for benefits. If all income was subject to the Social Security tax, instead of just payroll wages, Social Security would again be solvent. Self-employed workers have to pay in at the end of the year - why shouldn't self-sufficient investors?
Neither of these proposals involves carving Social Security up like the Christmas goose, Mr. Ford. Instead of trying to find a way to lessen the economic impact of transition costs, why don't you just find a way to fix the problem? Fixing Social Security isn't this hard.