The Republican (Alternate) Social Security Plan
By Mary Pitt
Ed Feulner of the Heritage Foundation has disributed a news release to newpapers stating that, in the current "DeMint Bill" which is being considered by the House, the Social Security "surplus" would no longer be "spent by Congress" as evidenced by the "special Treasury bonds" which will one day have to be paid back by future workers. What will our enlightened Congress do with the "surpus" as envisioned by this bill? They will spend it!
Not only that, but they will add to the deficit by doing so. According to an Associated Press article, the leading House bill, drafted by Sen. Jim DeMint, (R-SC) and Rep. Jim McCrery, (R-La) to overhaul Social Security would marginally extend the program's solvency, but it would add $851 billion to this nation's debt over 11 years, according to an analysis released Friday by the system's chief actuary. The bill calls for establishing personal accounts for workers under age 55, and stocking them with Treasury bonds equal to the surplus Social Security taxes the government will collect each year through 2016.
This would be just one year before the present fund is expected to run out of money. (No plan is suggested to compensate for that eventuality, since nothing would be added to it during the ensuing years.) The only difference is that the Treasury bonds that will be issued as security for the loan to the General Fund will be earmarked for specific individuals who will "own" their proceeds, which will come from the interest earned by those bonds.
My question is, "Who will pay back the value of the bonds and the accrued interest when those holders retire?" There are two choices. First, they could be paid back by those same "future workers" or, alternatively, the recoupment would come from reductions in the amount of benefits available to the retirees!
No matter who or how it is paid, someone will be paying it and that someone will be our children, either through higher taxes or by supplementing their parents' inadequate Social Security benefits.
Every few years, the cry goes up, "Social Security is broke! There is no money! The only choice is to destroy the system!" And, every few years, the realization dawns that, due to the increase in the cost of living, coupled with steady inflation and rising earnings, the logical answer is merely to increase the cap on the amounts of annual earnings on which funds are withheld. Currently, the "cap" stands at something less than $100,000 per year, a lot of bucks by the standards of many of the small towns in the "Red States", but when you consider that Vice President Cheney has just received an annual RAISE that is almost four times that amount, it seems fairly reasonable. A hundred thousand dollars a year is considered "starting salary" in most of the big corporations and law firms in the cities, yet part of even that salary is immune from Social Security contributions.
The retirement age has already been increased, and that is a touchy subject for those who "burn their bodies" during their working lives. One who spends an entire working lifetime at a desk may continue to be employed into their eighties, if they choose. However, those who do hard, physical work may find their bodies broken down and worn out long before they turn 67. (Guess which category includes our Congressional representatives.) In addition, under this proposal, they do not even tell us what arrangements will be made for widows and dependent children of deceased workers or for the disabled.
In the opinion of this former Republican, the Neocons in Washington need to go back to the playbook of their predecessors and study the chapter on fiscal common sense. Taking money from one pocket and putting it in the other has never been proven to show a profit and it is not likely to do so now. The way Social Security has worked for the last 70 years and the only way it can possibly work now is by carefully tending the income so it will be saved for the purpose for which it is intended.
There truly is no "surplus" and no savings plan for retirement other than what we put in, but we have a right to expect that. Cooking the books and finding creative ways to rob the future of the American working class would smell as bad under any other name. They must "raise the cap", stop spending like drunken sailors, and make plans to pay back the funds that they have "borrowed" for all these years.
Even though there are other very important things for Congress to handle, they must not seek a "quick fix" for this problem. There is time to wait until the world situation is a bit settled down and then to give it the reasoned consideration that will be necessary. Please write or phone your representatives in Washington and tell them, "It ain't broke, so don't fix it!"
We must not allow them to destroy the most efficient and beneficial social program of the last century by hurried judgements and unintended consequences. And that, my friends, is precisely what the administration and the Republican Congress intend to do unless the people of this country wake up and take whatever steps are necessary to stop them.
Mary Pitt is a septuagenarian Kansan who is self-employed and active in the political arena. Her concerns are her four-generation family and the continuance of the United States as a democracy with a government "of the people, by the people, and for the people". Comments and criticism may be addressed to firstname.lastname@example.org .