cross post from Retire Early boardThe 2005 SS Trustee report was published today.Changes from last year-- unfunded liability: $4.0 trillion ($3.7 trillion in the '04 report)-- crossover date when benefits exceed taxes: 2017 (was 2018)-- insolvency data when "trust fund"=$0: 2041 (was 2042)I'm sure that Pelosi / Reid will claim Karl Rove is responsible for the outlook decline...http://www.ssa.gov/OACT/TR/TR05/index.html
AARP CEO Bill Novelli said: "Even though the Social Security trustees report reduces solvency projections by one year, the report reaffirms the value and stability of Social Security. While it needs changes, Social Security continues to be sound for decades to come. But we should act sooner rather than later to make the changes that will assure Social Security's guaranteed lifelong, inflation protected benefits for our children and grandchildren.AARP leaders and volunteers are meeting with all parties in the Social Security debate and we continue to be eager to engage in thoughtful discussion of the options for Social Security's future. Our members have attended hundreds of forums, sent nearly a half million letters, e-mails and phone calls to their members of Congress and shown up to talk with them at home. They stand ready to support fruitful public debate by their elected representatives."
AARP CEO Bill Novelli said: Blah, blah...HIGHER TAXES...blah, blah...ELIMINATE THE $90K CAP...Blah, blah...SCREW ANYONE NOT IN THE GEEZER CLASS...Blah, blah blah. Thank you...
SCREW ANYONE NOT IN THE GEEZER CLASSI am rapidly approaching the geezer class & I want private accounts. One of the places where the Republicans are not really making their point is that right now there is no such promise--AARP & Co, are not really being honest that current benefits are really at the whim of congress.AARP ought to be dreaming of an explicit guarantee of "no changes, no reductions". Give them this and they should line up in their walkers to sign on.
AARP ought to be dreaming of an explicit guarantee of "no changes, no reductions". Give them this and they should line up in their walkers to sign on.Unfortunately, AARP and the Democratic spin machine are not interested in such a guarantee. They are working overtime trying to convince the unsuspecting seniors who are near retirement or who are currently collecting SS, that Bush's plan puts them at risk. They need to get the part of their base that votes (i.e. seniors) riled up against anything that Bush proposes as their only hope not losing more ground in the '06 elections. I don't believe that Bush can say ANYTHING that would be adopted by the other side. The anti-Bush venom and fear of more electoral losses are too strong. Take a look at the first paragraph of a "report" put out by one of the Demo stink tanks:http://www.epinet.org/briefingpapers/156/bp156.pdfCOLLISION COURSEThe Bush Budget and Social Securityby Max B. SawickyThe Bush Administration's budget for fiscal year 2006 proposes the continuation of fiscal policies that undermine the federal government's ability to perform traditional, basic functions, including its capacity to make good on obligations to Social Security and Medicare. Current retirees, as well as workers currently over the age of 55, are in danger of benefit cuts in coming years, despite the president's assurances to those groups that their current benefits are safe.Not exactly ready for the acceptance of guarantees if you ask me...
The Social Security trustees are dishing up some misleading numbers. http://www.nytimes.com/2005/03/24/opinion/24thu3.html?ex=1112331600&en=d717017cccf6c237&ei=5070
The trustees' report reaffirms that Social Security does not face a near-term crisis and can pay full benefits for the next 36 years but will eventually face a significant imbalance. A sizeable shortfall between Social Security income and Social Security benefit entitlements should not be acceptable to the public or policymakers, and action is needed to restore the program's long-term solvency. However, President Bush's proposal to shift payroll taxes into individual accounts would not help close the Social Security's shortfall and could make the challenge greater. http://www.cbpp.org/3-23-05socsec.htm
The Social Security trustees are dishing up some misleading numbers. No...I think the NY Times is dishing up the misleading numbersFrom the article's concluding paragraph:1st sentence:Fortunately, the unpoliticized numbers in yesterday's report are not overly dire.There's an old saying: "The quality of the music is totally dependent on whether it's your child playing the piano". For the NYTimes, they think the system is fine as is with just a few "modest tax increases and benefit cuts" to fix it up. Anyone who analyzes the financial structure of the SS as it is defined today realizes that the NYT crowd is fighting a losing battle against arithmetic ((a)demographic changes and (b)benefit increases which outpace revenue growth).2nd sentence: Using a 75-year time horizon, the trustees project that the system will be able to pay full benefits until 2041, at which time it will be able to pay 74 percent of the promised benefits, falling to 68 percent by 2079.Last year's assessment showed that full benefits could be paid until 2042 using the same modeling criteria. In the '04 report, there was a 38yr full benefit expectation, in the '05 report, there is a 36yr full benefit expectation. That's a 2yr change on a 38yr base = -5.3% yr-yr change.Third sentence: That works out to a gap of $4 trillion, which could be bridged with modest tax increases and benefit cuts, phased in over the next few decades.Wrong again. The $4 trillion number is the net present value of the unfunded benefits over the next 75yrs. That amount of money would be needed today, with interest added over 75yrs, to fill the "gap". (The actual $ number for tax increases or benefit cuts would be substantially larger than the $4 trillion quoted.) Last year, the same number with the same modeling parameters was $3.7 trillion. That's an 8.1% yr-yr change. The amount of tax increases and benefit cuts will continue to mushroom because the system is fundamentally unstable. The number of payers will continue to shrink while the number of takers will continue to grow until 2030. If taxes are increased and benefits cut, at some point in the near future (5,10 or 20yrs) the problem will reproduce itself. It's just a Ground Hog Day kind of problem as long as the unstable system design remains unchanged.Last sentence: If people try to tell you different, they need to be set straight.The editorial staff at the NY Times are the ones who need to be set straight because they are the ones who believe that 5-8% changes in one year are "not overly dire". They clearly do not understand the importance of compound arithmetic (5% for 10ys = 63% change)...
>> No...I think the NY Times is dishing up the misleading numbers <<Not possible. They're a paragon of fairness and accuracy. After all, they *do* employ Paul Krugman...#29
despite the president's assurances to those groups that their current benefits are safe.Actually, this is a lie. It is very clear to me that the President promised no changes for anyone 55 & over if we adopted his plan, including the private accounts. If we do not adopt this plan, there is no promise.
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