Social Security Tax Hike Feared

  1. http://www.truthout.org/docs_05/011605Y.shtml

    Social Security Tax Hike Feared
    By Alan Fram
    The Associated Press
    Saturday 15 January 2005
    Bush official predicts 50% jump with no revamp.
    Washington - Social Security taxes will have to rise by half if lawmakers don't revamp the giant program, President Bush's budget chief said Friday as the administration sought support for its overhaul plans....

    ...To help make up for lost revenue, the administration is considering reducing the benefits of future retirees, but it has not specified for whom or by how much....

    http://money.cnn.com/2005/01/13/reti...dope/index.htm

    Myths, half-truths and exaggerations Here are just 5 swirling around the Social Security reform debate.
    January 14, 2005: 4:26 PM EST
    By Jeanne Sahadi, CNN/Money senior writer

    That means truth - or at least the whole truth delivered in context - is sometimes sacrificed or exaggerated by both sides in the interest of making their point. Oh, and your friends and neighbors may have a few things wrong, too...
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  2. 18 Comments

  3. by   SmilingBluEyes
    Isn't this a given??? i just wonder if ANYONE can save s.s. after the Baby Boomers are thru dipping into it.......dont' think so. I really object to increases in my taxes for it, knowing fairly well I won't see a dime of it when I need it. I will likely work til I am dead to keep afloat....most in the after-Boomer generation can expect to, I imagine. I just do what I can w/my 401K and am getting a Roth IRA. S/S is not going to be there for me or my dh when it's time for us to retire.
  4. by   pickledpepperRN
    I can't believe this administrations fear mongering about Social Security. They lost credibility with their previous lies.

    Leaked GOP Memo: Privatizing Social Security Would Be "One of the Most Significant Conservative Governing Achievements Ever"
    Friday, January 14th, 2005
    http://www.democracynow.org/article..../01/14/1519241
    Vice President Dick Cheney gives a major address calling for radical overhaul of social security. We speak with Roger Hickey, co-director of the Campaign for America's Future and a leader of a coalition to protect social security. [includes rush transcript]

    Last week, an internal White House memo titled "Some Thoughts on Social Security," was leaked to the press. The memo was written by Peter Wehner, an aide Karl Rove in the Office of Strategic Initiatives. In it, Wehner writes "If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate." The memo goes on to outline the strategies and talking points necessary to reform Social Security.
    One week after the Jan. 3rd memo, the White House has kicked off an election-style campaign to promote President Bush's Social Security reform plan. At a White House forum billed as a "conversation on Social Security", Bush painted a dire picture of the current system, warning younger workers that Social Security "will be flat bust, bankrupt, unless the United States Congress has got the willingness to act right now."
    In an interview with USA Today, Bush said members of Congress who don't confront Social Security's problems may pay a price. He said "If people shy away from working together to solve the problem, there will be a political consequence."
    Meanwhile, Vice President Dick Cheney yesterday spoke before an audience of college students and administrators at The Catholic University of America. He spoke about the so-called "coming crisis" of Social Security and argued for the privatization of parts the system. This is an excerpt of what he had to say.
    Vice President Dick Cheney, speaking at Catholic University
    Roger Hickey, co-director of the Campaign for America's Future and a leader of a coalition to protect social security.

    RUSH TRANSCRIPT
    JUAN GONZALEZ: Meanwhile, Vice President Dick Cheney spoke before an audience of college students and administrators at the Catholic University of America yesterday. He spoke about the so-called, quote, "Coming crisis of Social Security," and urged for the privatization of the system. This is an excerpt of what the Vice President had to say:

    VICE PRESIDENT DICK CHENEY: The time has come for an honest, straightforward and realistic discussion about the future of the Social Security system. The system has been in steady service, uninterrupted for nearly 70 years. It has fulfilled the promise announced by President Franklin Roosevelt, providing vital income to millions of seniors and assuring generations of working people their retirement years would have some decent measure of security. For today's generation of senior citizens, the system is strong and fiscally sound. But younger workers are understandably concerned about whether social security will be around for them when they need it. The problem is simple to state -- with an aging population and steadily falling ratio of workers to retirees, the system is on a course to eventual bankruptcy. Social Security was designed in 1935 for a different world than the one we live in today. It is a pay as you go system, in which the benefits that go to current retirees come directly from the payroll taxes of current workers. It is also worth noting that in 1935, the average life expectancy in America was about 60 years. Meaning that many people would not live long enough to become eligible for retirement benefits. So, when the program was still new in the 1940's, there were 41 workers paying into the system for every retiree drawing benefits. Over time, as more and more retirees entered the system and stayed in the system for a longer period, the number of workers per beneficiary continued to decline. By the 1950's, about 16 workers paid in for every person drawing out. Today, it's about three workers for each beneficiary, and by the time our youngest workers, those just entering the workforce today, turn 65, the ratio will be down to two workers for each beneficiary. At present, Social Security operates with a substantial cash surplus, but very soon, the greatest test of the Social Security system will be upon us. The first members of the baby boom generation are reaching age 60, and they look forward to long, active and healthy lives. In just a few years, their generation will begin retiring and collecting benefits and the surpluses will begin to decline. By 2018, Social Security will begin paying out more than it receives in payroll taxes. From then on the shortfalls will grow larger every year. Until 2042, when the Social Security trustees estimate the system will reach fiscal collapse. By that point, with the projected shortfall in the trillions of dollars, the government would have no option other than to suddenly and dramatically reduce benefit payments by over 25%, or to impose a massive, economically ruinous tax increase on all American workers.

    AMY GOODMAN: Vice President Dick Cheney speaking at Catholic University yesterday in Washington, D.C. We are joined in our Washington studio by Roger Hickey, Co-director of the Campaign for America's Future, a leader of a coalition to protect Social Security. Welcome to Democracy Now!

    ROGER HICKEY: Thank you, Amy.

    AMY GOODMAN: Can you respond to what the Vice President laid out?

    ROGER HICKEY: Well, first, it should be noted that there were demonstrators who met him at Catholic University, and remained outside throughout the speech. President Cheney -- Vice President Cheney is doing exactly what President Bush and the rest of his campaign have been doing since the election.
    They have been trying to scare the American people into thinking that there's some kind of a crisis facing Social Security.
    It's very, very parallel to the scare tactics they used around weapons of mass destruction in Iraq.
    You will see a steady drumbeat from here through the summer of representatives from the administration trying to convince us that somehow, as Cheney said, Social Security faces a fiscal collapse.
    Well, that is just bald-faced lies. It is designed to sell people on a program that will eventually dismantle Social Security, and the response that we have to say is, look, there are plenty of people who will be paying into the Social Security system in 2050 and 2060.

    In the worst case scenario, if we did nothing to the Social Security system, we might have to reduce benefits by 20%, 25% in 2052.
    Until then, we can pay full benefits. Social Security may be facing a challenge in the future, sometime after the baby boomers retire, because we have this trust fund that we have created, but nowhere near a fiscal collapse, and nothing like the time frame that the administration is talking about.

    JUAN GONZALEZ: Well, Roger Hickey, I'd like to ask you, first of all this concept of Social Security going bankrupt, since it is a government guaranteed system, and it's a pay as you go system, it's -- it doesn't seem to be more likely than for instance the Defense Department going bankrupt, or the defense budget going bankrupt, but I'd like to ask you, this whole issue of a trust fund -- there have been allegations that the government -- this surplus that has been building up all of these years as baby boomers have been paying into it, that both Democrats and Republicans over the years have been dipping into this trust fund. Could you explain how the trust fund works, and whether it's true that there have been -- there has been raiding of the trust fund by previous administrations?

    ROGER HICKEY: For the last 20 years or so, we have all been paying a little extra. It's been more than a pay as you go system. We have been paying extra FICA taxes to get ready for the baby boom retirement. That trust fund is building up government bonds. They're as good as the government bonds that the Japanese and the Europeans buy from the Treasury. If we were to announce as some conservatives have, that somehow that trust fund doesn't exist, it would be tantamount to the U.S. government announcing that they were defaulting on their bonds. The problem, of course, is that the administration, this administration especially, has run up big deficits by cutting taxes for the very wealthy, and now they're doing a bait and switch. They're trying to say, well, we don't have the money in the trust fund. Of course, we do. And of course, that money will be used for the baby boom retirement. It's really, the problem that faces Social Security way out in the future is that we're all living longer. It's not the baby boomers. We'll all be dead by the time -- or very, very old by the time that the challenges hit the Social Security system. Not to say that we shouldn't tweak and fix the system now, but keep your eye on the ball. This administration is trying to make people afraid that the Social Security system is going to collapse, and therefore, they're trying to get us to all buy their plan to cut Social Security benefits, and privatize the Social Security system right now.

    AMY GOODMAN: Roger Hickey, there's a piece in today's Washington Post that talks about the campaign that's being launched by the Bush administration saying, President Bush plans to reactivate his re-election campaign's network of donors and activists to build pressure on lawmakers to allow workers to invest part of Social Security taxes in the stock market. White House allies are launching a market research project to figure out how to sell the plan in the most comprehensible and appealing way, and Republican marketing and public relations gurus are building teams of consultants to promote it. What exactly is happening right now?

    ROGER HICKEY: Well, this is going to be a campaign run by Karl Rove and Ken Melman and the people who ran the President's re-election campaign. They have allies. Look for groups already advertising, the Progress for America Organization, funded by contributors to the Bush campaign. The Club For Growth. They're going to be raising somewhere in the neighborhood of $100 million to sell this privatization plan. But we shouldn't worry too much. So far, the President has been talking in vague terms about, "Wouldn't you like to have some private accounts." Now because he's trying to pass something this year, the real details which are very, very unpopular, are coming out. The fact is that inherent in their plan is a 40% cut for young workers in terms of their retirement benefits under Social Security. They are going to have to come up with a way to finance a $2 trillion transition cost that they simply don't have the money for. So, what we're seeing in the last two weeks is a lot of details about their plans coming out in the press, and those details are very unpopular when the American people are asked, "Do you like private accounts?," they sort of say, "Well, maybe." But when they're asked, "Would you like private accounts if it means cutting your retirement benefits in the future?" They turn very, very strongly against it. We have a campaign that is going to be big money on one side, and the American people on the other educating themselves about the details of the Bush plan.

    JUAN GONZALEZ: Could you talk a little bit about why this is happening, why Bush and the Republican party are so hell-bent on pressing this campaign forward? I know in the Wall Street Journal in the days after the election in November said that one of the -- one of the industries most expecting to benefit from the new administration was going to be the Wall Street firms that would be in essence managing all of these private -- private retirement accounts that the President hopes to be able to get for the American people. Are there any estimates of how much of a boon this would be to Wall Street?

    ROGER HICKEY: Well, it would mean trillions of dollars in terms of management fees that would erode small accounts that would be set up under this plan. So, yes, Wall Street has a motivation, but I think that really, it's broader than that. The Bush administration and the people around them really are out on an ideological mission to dismantle affirmative government. And therefore, they know that if they can get away with dismantling the Social Security system, the very, very popular retirement social insurance system that Americans have supported for decades, if they can dismantle that and privatize it as part of their "ownership society," the slogan of which ought to be: "You're on your own, buddy," that means that they can get away with practically anything. They can dismantle regulation. They can really go about the -- their whole agenda of dismantling government. It's an ideological fixation with them, and it's going to be an epic test with the very wealthy corporate America and Bush supporters on one side, and on the other side, the organizations that represent the American people. Labor, women's organizations, retiree groups around the country, AARP has just gotten into this battle. We have got a sizable coalition on the other side which is going to be very, very active at the grassroots level talking to members of Congress, and there are a lot of Republican members of Congress who are caught in the middle. They are very, very worried about the fiscal irresponsibility of this plan, about the idea of cutting benefits for their constituents, and I think that this is a battle that Americans, not the Bush administration, are going to win.

    AMY GOODMAN: Roger Hickey is with us, Co-director of the Campaign for America's Future, part of a coalition to protect Social Security. The other day we called the Social Security hotline to get some information. When you're put on hold, this is what you hear:

    SOCIAL SECURITY HOTLINE: Thanks for holding. A representative will be with you shortly. Did you know that the 76 million strong baby boom generation will begin to retire in about 10 years? When that happens, changes will be need to be made to Social Security, changes to make sure there's enough money to continue paying full benefits, and most experts agree, the sooner those changes are made, the less they are going to cost.

    AMY GOODMAN: Roger Hickey of the Campaign for America's future. Your response to this message on hold, taxpayer funded Social Security administration where people call to get information.

    ROGER HICKEY: Well, this is just one of the campaigns that the administration is doing. This is not unusual. We have seen them do packaged pseudo-newsclips to sell the President's Medicare Prescription Drug Plan to help the H.M.O.'s and the drug industry. We have seen them pay pundits in Washington to support the so-called "No Child Left Behind Act." That's been in the news lately. And they are simply using what should be a government service run by civil servants to propagandize the American people who are looking for help dealing with Social Security. The union representing workers who work in the Social Security Administration, the American Federation of Government Employees, is protesting this. They're manipulating their workers, forcing them to propagandize the public. Senator Lautenberg and others have protested on the Senate floor and are looking into yet another investigation of the inappropriate use of government funds to propagandize in the middle of this very hotly contested legislative battle here on the future of Social Security. It is totally inappropriate and probably illegal.

    JUAN GONZALEZ: When it battle begins to move to the Congress, can you give us an idea of who are some of the key Senators or members of the House of Representatives that would be influential in terms of determining, or maybe on the fence in terms of determining which way this thing goes?

    ROGER HICKEY: Well, it's interesting. In the past, the Bush administration has had Republicans very, very united in voting their tax cuts and on the Prescription Drug Plan, both of which were an easy vote for Republicans offering a tax cut or a benefit to their constituents. It's really the rank and file Republicans, not the leadership, but the rank and file Republicans, the little guys, the back benchers. Congressman Davis of Virginia, who is very worried about having to vote for privatization. He's a Republican, former head of the Congressional Campaign Committee for the Republicans, estimates that there's about 30 to 40 Republican Congress people who really don't want to vote to cut benefits and privatize Social Security. So, it's really going to come down to keeping the Democrats solidly opposed and so far, they have been, and then American people really talking to those 30 or 40 Republicans, and making sure that they stick with their convictions. This is a winnable fight. The house leadership is -- on the Republican side, is going to be with the President. But the people and the Republican rank and file as well as the Democrats under Congresswoman Pelosi and Harry Reid, are going to stay pretty united against privatization. It's a battle that's winnable.

    AMY GOODMAN: Roger Hickey, I want to thank you for being with us. Co-director of the Campaign for America's future.
  5. by   pickledpepperRN
    NBC Short on Social Security "Crisis" Critics
    January 12, 2005
    The debate over George W. Bush's plan to privatize Social Security seems to be heating up, and some media outlets are beginning to notice the flaws in the White House's argument that there is an imminent "crisis" in the decades-old government program. On the January 11 NBC Nightly News broadcast, anchor Brian Williams seemed to be addressing that issue, introducing a segment by noting that "critics say he's exaggerating the problem to sell his plan, while not yet talking about big cuts in future retiree benefits."
    But the report that followed included no such critics of the administration's "crisis" rhetoric. There was certainly room for such opinions, considering that NBC quoted Bush making a glaring exaggeration in describing the plan: "So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust." None of the projections of Social Security's future contend that the system will be "flat bust"; even by the Social Security trustees' pessimistic assumptions, the system will always be able to pay more to future retirees than current recipients get (Economic Reporting Review, www.cepr.net, 12/6/04).
    But NBC correspondent David Gregory failed to check Bush's comment, following up only by mentioning that "before settling on a final proposal, aides say the president needs more time to define the problem, one he calls a crisis." One would hope that a journalist would be more interested in pointing out that Bush's attempt to "define the problem" as a "crisis" apparently involves wild exaggerations.
    NBC did include comments from one worker who was worried about future benefit cuts in Social Security. His fears were balanced by a soundbite from David John, billed by NBC as a "Social Security Analyst" and one of the "supporters of the benefit cut." Left unmentioned, however, was Johns' institutional affiliation: He works for the conservative Heritage Foundation, one of the most active pro-privatization think tanks in the country.
    It's good that NBC is at least referring to the existence of "criticism that the president is exaggerating the need for change." But NBC would better serve its viewers by actually including those views in its reports.

    http://www.fair.org/activism/nbc-socialsecurity.html

    USA Today Social Security commentary riddled with falsehoods

    http://mediamatters.org/items/printable/200501140003
  6. by   pickledpepperRN
    http://www.dailyhowler.com/dh011405.shtml

    ...Duh! Correcting misstatements by major officials is part of a journalist's job description!
    And they shouldn't feel they have to find a Democratic spokesman to contradict Bush; that is their job as reporters.
    As we think Michael Kinsley first asked, how stupid would it be to write something like this: "Today, George Bush said the earth is flat. A Democratic spokesman quickly challenged him."
    Objective reporters don't need third parties to interject simple matters of fact....
  7. by   pickledpepperRN
    http://www.reuters.com/newsArticle.j...toryID=7337636

    Report: U.S. Conducting Secret Missions Inside Iran
    Sun Jan 16, 2005 12:33 PM ET


    WASHINGTON (Reuters) - The United States has been conducting secret reconnaissance missions inside Iran to help identify potential nuclear, chemical and missile targets, The New Yorker magazine reported Sunday.
    The article, by award-winning reporter Seymour Hersh, said the secret missions have been going on at least since last summer with the goal of identifying target information for three dozen or more suspected sites.
    Hersh quotes one government consultant with close ties to the Pentagon as saying, "The civilians in the Pentagon want to go into Iran and destroy as much of the military infrastructure as possible."

    One former high-level intelligence official told The New Yorker, "This is a war against terrorism, and Iraq is just one campaign. The Bush administration is looking at this as a huge war zone. Next, we're going to have the Iranian campaign."

    The White House said Iran is a concern and a threat that needs to be taken seriously. But it disputed the report by Hersh, who last year exposed the extent of prisoner abuse at the Abu Ghraib prison in Iraq....
    "We obviously have a concern about Iran. The whole world has a concern about Iran," Dan Bartlett, a top aide to President Bush, told CNN's "Late Edition." ...

    ...The New Yorker reports that this task force, aided by information from Pakistan, has been penetrating into eastern Iran in a hunt for underground nuclear-weapons installations.

    In exchange for this cooperation, the official told Hersh, Pakistani President Pervez Musharraf has received assurances that his government will not have to turn over Abdul Qadeer Khan, the father of Pakistan's atomic bomb, to face questioning about his role in selling nuclear secrets to Iran, Libya and North Korea.

    Hersh reported that Bush has already "signed a series of top-secret findings and executive orders authorizing secret commando groups and other Special Forces units to conduct covert operations against suspected terrorist targets in as many as 10 nations in the Middle East and South Asia."

    Defining these as military rather than intelligence operations, Hersh reported, will enable the Bush administration to evade legal restrictions imposed on the CIA's covert activities overseas....
  8. by   pickledpepperRN
    http://mediamatters.org/items/printable/200501190001

    ABC News chief White House correspondent Terry Moran allowed President Bush to dodge a question about the risks of relying on personal investment accounts to provide a portion of retirees' Social Security benefits. Bush asserted that "there will be strict ... investment guidelines" restricting the types of investments that people can make using funds from their personal accounts, but also that "Over time stocks and bonds and mutual funds yield a rate of return that's much better than that which is in the Social Security trust." Moran declined to challenge Bush on how a single system could accomplish the two competing goals of low risk and high return.
    From the January 17 edition of ABC's World News Tonight:...
  9. by   Thunderwolf
    Bush and his investment buddies are ready to start dipping into our till it looks like.
    This is an old strategy...problem, reaction, solution.
    The problem is that the "problem" isn't the real focus here, but the "solution"/goal is.
    If I want something/goal, create a problem/crisis (basic scare tactic) which requires the immediate fix/reaction...and achieve your desired result-->goal, which is the true focus.
    This approach gets folks motivated to accept your goal...it's for their best interest, right? Not really. It serves the interest for whom the goal REALLY serves...in this case, corporate business. And just think of the income they will rake in from us.
    Old business strategy, very old.
    Some investment firms are going to get VERY rich.
    Last edit by Thunderwolf on Jan 21, '05
  10. by   Mkue
    U.S. Conducting Secret Missions Inside Iran
    I guess it's not a "secret" anymore..the media just can't keep a secret
  11. by   SmilingBluEyes
    Quote from Thunderwolf
    Bush and his investment buddies are ready to start dipping into our till it looks like.
    This is an old strategy...problem, reaction, solution.
    The problem is that the "problem" isn't the real focus here, but the "solution"/goal is.
    If I want something/goal, create a problem/crisis (basic scare tactic) which requires the immediate fix/reaction...and achieve your desired result-->goal, which is the true focus.
    This approach gets folks motivated to accept your goal...it's for their best interest, right? Not really. It serves the interest for whom the goal REALLY serves...in this case, corporate business. And just think of the income they will rake in from us.
    Old business strategy, very old.
    Some investment firms are going to get VERY rich.
    Wow you can't keep a secret either, can ya????
  12. by   pickledpepperRN
    I will post the debate when the transcript is available.

    Thursday, February 3rd, 2005
    http://www.democracynow.org/article....5/02/03/158255

    President Bush devoted a large portion of his State of the Union address to his push to restructure Social Security, kicking off a campaign to advocate for the privatization of the system. We host a debate with Paul Krugman of The New York Times and Eric Engen of the American Enterprise Institute.

    President Bush devoted a large portion of his State of the Union address to his push to restructure Social Security. The address kicked off a five-state campaign-style tour to advocate for the privatization of the system. The plan faces nearly unanimous opposition from congressional Democrats, few of whom stood up or applauded during the Social Security portion of the president's speech. In his address, Bush argued that the retirement system was headed toward bankruptcy.

    President Bush, State of the Union address, February 3, 2005:
    "For younger workers, the Social Security system has serious problems that will grow worse with time. Social Security was created decades ago, for a very different era. In those days, people did not live as long. Benefits were much lower than they are today. And a half-century ago, about sixteen workers paid into the system for each person drawing benefits.
    Our society has changed in ways the founders of Social Security could not have foreseen. In today's world, people are living longer and, therefore, drawing benefits longer. And those benefits are scheduled to rise dramatically over the next few decades. And instead of sixteen workers paying in for every beneficiary, right now it's only about three workers. And over the next few decades that number will fall to just two workers per beneficiary. With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees.

    So here is the result: Thirteen years from now, in 2018, Social Security will be paying out more than it takes in. And every year afterward will bring a new shortfall, bigger than the year before. For example, in the year 2027, the government will somehow have to come up with an extra $200 billion to keep the system afloat -- and by 2033, the annual shortfall would be more than $300 billion. By the year 2042, the entire system would be exhausted and bankrupt. If steps are not taken to avert that outcome, the only solutions would be dramatically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs. "


    Today we host a debate on Social Security.

    Paul Krugman, New York Times columnist and Professor of Economics at Princeton University. He has recently published a new college textbook called "Microeconomics."
    Eric Engen, resident scholar at the American Enterprise Institute.

    www.democracynow.org
  13. by   BeachNurse
    Liberal group's ad falsely claims Bush plan would cut benefits 46 percent.

    February 1, 2005
    Modified:February 2, 2005
    Summary



    MoveOn.org launched a false TV ad in the districts of several House members, claiming through images and words that President Bush plans to cut Social Security benefits nearly in half. Showing white-haired workers lifting boxes, mopping floors, shoveling and laundering, the ad says "it won't be long before America introduces the working retirement."

    Actually, Bush has said repeatedly he won't propose any cuts for those already retired, or near retirement. What MoveOn.org calls "Bush's planned Social Security benefit cuts" is actually a plan that would hold starting Social Security benefits steady in purchasing power, rather than allowing them to nearly double over the next 75 years as they are projected to do under the current benefit formula. The White House has discussed such a proposal, and may or may not adopt it when the President puts forth a detailed plan expected in late February.


    Analysis



    MoveOn.org began running the ad Jan. 31 in the districts of House members Allen Boyd (D-FL), Chris Chocola (R-IN), and Jim Gerlach (R-PA), and planned to start running it in Montana Feb. 2 in anticipation of a visit by President Bush following his State of the Union Address.


    MoveOn.org Ad:
    "Working Retirment"

    Video: A series of white-haired men and women perform menial jobs, kneading dough, lifting boxes, mopping floors, shoveling, washing bedding.

    Announcer: First, someone thought up the working lunch. Then we discovered the working vacation. And now, thanks to George Bush's planned Social Security benefit cuts of up to 46 percent to pay for private accounts, it won't be long before America introduces the world to the working retirement.

    Call your representative today and tell them no. George Bush can't cut Social Security.

    The ad also appeared on MoveOn's website , along with a request for donations to finance a $500,000 purchase of airtime.

    The ad falsely implies through juxtaposition of words and pictures that Bush could slash benefits by nearly half for current retirees.

    It shows a series of melancholy, white-haired workers -- all of them apparently age 65 or older -- at menial jobs. Meanwhile, an announcer says, "thanks to George Bush's planned Social Security benefit cuts of up to 46 percent to pay for private accounts, it won't be long before America introduces the working retirement."

    No Cuts for Current Retirees

    In fact, Bush has said over and over he won't cut benefits for anybody currently getting them, or near retirement. By using images of over-65 workers and using the words "before long," the ad creates the false impression that Bush's "cuts" would apply to them, and soon.

    Furthermore, Bush hasn't proposed anything specific, yet. He has said in general that he'll propose diverting a portion of current Social Security taxes into private accounts for younger workers (which the White House now prefers to call "personal" accounts), to be invested in stock and bond funds. He has also ruled out any increase in Social Security payroll taxes.

    The ad refers to a proposal that the White House has said it is considering. That idea would change the formula for setting initial benefits for future retirees, and would have no effect on current retirees. The Washington Post reported Jan. 4 that such a proposal is "likely," and that hasn't been denied by the White House.

    Wage Indexing vs. Price Indexing

    Since 1979, initial Social Security benefits have been pegged to rising wage levels. Because wages rise faster than prices, that means future retirees are scheduled to get benefits with more purchasing power than today's retirees. According to the Congressional Budget Office, a worker retiring today with average lifetime earnings can expect retirement benefits of just under $14,000 a year, but a similar average worker retiring in 2075 could expect benefits of $26,000 in today's dollars -- nearly double the purchasing power of today's average retiree.

    Replacing wage indexing with price indexing would hold that $14,000 benefit constant, adjusting it only for inflation, so that a worker retiring in 2075 would get a benefit with the same buying power as today's average retiree. That would more properly be called a "freeze" than a "cut."

    For more on this, see the CBO's study, "The Future Growth of Social Security."

    The MoveOn ad would be accurate if it said Bush "is expected to propose holding down the growth of future Social Security benefits," and if it showed newborns instead of white-haired current retirees.

    The fact is, nobody living today would be likely to see the full 46 percent "cut" to which the MoveOn.org ad refers. The holdown in growth would take 70 years to reach that size. The current full retirement age for today's newborns (and anybody born in 1960 or later) is age 67.

    Furthermore, current law will force an actual cut in benefits eventually, under official projections. The Social Security trustees estimate that under current law, without a tax increase, all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042, and would continue to be cut each year thereafter. The Congressional Budget Office has a more optimistic projection, predicting that the trust fund wouldn't be exhausted until 2052 -- ten years later -- and that benefits would have to be cut only 22% at first.

    Footnote: Proposals to replace wage-indexing for initial retiree benefits should not be confused with the automatic cost-of-living adjustment (COLA). The COLA would not be affected. Once initial benefits are determined, they would continue to be adjusted annually to compensate for rising prices, just as today.

    Update: MoveOn.org's Newspaper Ad

    Update, Feb. 2: In a full-page newspaper ad in The New York Times MoveOn.org repeated its misleading claim, saying "Privatization means cuts of up to 46% in guaranteed benefits." It again failed to mention that the "cuts" would be in projected future growth of benefits, and would take 75 years to reach the 46% figure.

    The newspaper ad stuck much closer to fact when it stated that Social Security "can meet 100% of its obligations for the next 37 years with no changes to the current system, according to the Social Security Administration." That's true, though the system will begin to require infusions from general tax revenues after 2018 (or 2020, according to CBO) and those infusions will grow over time. The newspaper ad was also correct when it said "after 2042, the system reports it can pay more than 70% of benefits even if we do absolutely nothing." The Social Security Administration predicts that the Trust Fund can continue to pay full benefits until 2042 (another 37 years). After that, without additional revenue, benefits would have to be cut to 73 percent of what's currently promised, just as the newspaper ad says. Benefits would also have to be cut further in each future year, and would decline to 68% of promised benefits by 2078.

    Update: MoveOn.org Objects

    Also on Feb. 2, MoveOn.org strongly objected to our criticism of their TV ad. Tom Mattzie, the group's Washington, DC Director, wrote : "President Bush's plan cuts benefits compared to what workers would receive under current law. This implies very substantial reductions over time. . . . In referring to a cut against scheduled benefit levels, Move-on was using the standard framing for the whole debate."

    Whether that is "standard framing" or not, MoveOn's TV ad spoke only of "benefit cuts" without making clear that these were cuts "compared to what workers would receive under current law" 75 years from now (assuming taxes are increased to pay for them.) If the ad had made that clear we would not have criticized it so harshly. We still would have noted that benefits promised under current law are projected to nearly double in real, inflation-adjusted dollars by that time - crucial context for understanding the current debate.

    Mattzie also accuses us of inconsistency, stating that the MoveOn.org ad refers to "cuts" in the same way that we do later in our article. He points to our statement, for example, that "all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042." We think that sentence clearly refers to benefits in 2042, not current benefits.

    In line with our policy of providing opportunity for rebuttal to those we have criticized, we post the full text of the MoveOn.org rebuttal letter under "supporting documents" at right.


    Sources



    Jonathan Weisman and Mike Allen, "Social Security Formula Weighed; Bush Plan Likely to Cut Initial Benefits," Washington Post 4 Jan 2005: A1.

    Congressional Budget Office, "The Future Growth of Social Security: It's Not Just Society's Aging," 9 July 2003.

    "THE 2004 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND DISABILITY INSURANCE TRUST FUNDS," 23 March 2004: 8.

    Congressional Budget Office, "Updated Long-Term Projections for Social Security," Jan 2005.

    http://www.factcheck.org/article303.html#
  14. by   URO-RN
    Quote from BeachNurse
    Liberal group's ad falsely claims Bush plan would cut benefits 46 percent.

    February 1, 2005
    Modified:February 2, 2005
    Summary



    MoveOn.org launched a false TV ad in the districts of several House members, claiming through images and words that President Bush plans to cut Social Security benefits nearly in half. Showing white-haired workers lifting boxes, mopping floors, shoveling and laundering, the ad says "it won't be long before America introduces the working retirement."

    Actually, Bush has said repeatedly he won't propose any cuts for those already retired, or near retirement. What MoveOn.org calls "Bush's planned Social Security benefit cuts" is actually a plan that would hold starting Social Security benefits steady in purchasing power, rather than allowing them to nearly double over the next 75 years as they are projected to do under the current benefit formula. The White House has discussed such a proposal, and may or may not adopt it when the President puts forth a detailed plan expected in late February.


    Analysis



    MoveOn.org began running the ad Jan. 31 in the districts of House members Allen Boyd (D-FL), Chris Chocola (R-IN), and Jim Gerlach (R-PA), and planned to start running it in Montana Feb. 2 in anticipation of a visit by President Bush following his State of the Union Address.


    MoveOn.org Ad:
    "Working Retirment"

    Video: A series of white-haired men and women perform menial jobs, kneading dough, lifting boxes, mopping floors, shoveling, washing bedding.

    Announcer: First, someone thought up the working lunch. Then we discovered the working vacation. And now, thanks to George Bush's planned Social Security benefit cuts of up to 46 percent to pay for private accounts, it won't be long before America introduces the world to the working retirement.

    Call your representative today and tell them no. George Bush can't cut Social Security.

    The ad also appeared on MoveOn's website , along with a request for donations to finance a $500,000 purchase of airtime.

    The ad falsely implies through juxtaposition of words and pictures that Bush could slash benefits by nearly half for current retirees.

    It shows a series of melancholy, white-haired workers -- all of them apparently age 65 or older -- at menial jobs. Meanwhile, an announcer says, "thanks to George Bush's planned Social Security benefit cuts of up to 46 percent to pay for private accounts, it won't be long before America introduces the working retirement."

    No Cuts for Current Retirees

    In fact, Bush has said over and over he won't cut benefits for anybody currently getting them, or near retirement. By using images of over-65 workers and using the words "before long," the ad creates the false impression that Bush's "cuts" would apply to them, and soon.

    Furthermore, Bush hasn't proposed anything specific, yet. He has said in general that he'll propose diverting a portion of current Social Security taxes into private accounts for younger workers (which the White House now prefers to call "personal" accounts), to be invested in stock and bond funds. He has also ruled out any increase in Social Security payroll taxes.

    The ad refers to a proposal that the White House has said it is considering. That idea would change the formula for setting initial benefits for future retirees, and would have no effect on current retirees. The Washington Post reported Jan. 4 that such a proposal is "likely," and that hasn't been denied by the White House.

    Wage Indexing vs. Price Indexing

    Since 1979, initial Social Security benefits have been pegged to rising wage levels. Because wages rise faster than prices, that means future retirees are scheduled to get benefits with more purchasing power than today's retirees. According to the Congressional Budget Office, a worker retiring today with average lifetime earnings can expect retirement benefits of just under $14,000 a year, but a similar average worker retiring in 2075 could expect benefits of $26,000 in today's dollars -- nearly double the purchasing power of today's average retiree.

    Replacing wage indexing with price indexing would hold that $14,000 benefit constant, adjusting it only for inflation, so that a worker retiring in 2075 would get a benefit with the same buying power as today's average retiree. That would more properly be called a "freeze" than a "cut."

    For more on this, see the CBO's study, "The Future Growth of Social Security."

    The MoveOn ad would be accurate if it said Bush "is expected to propose holding down the growth of future Social Security benefits," and if it showed newborns instead of white-haired current retirees.

    The fact is, nobody living today would be likely to see the full 46 percent "cut" to which the MoveOn.org ad refers. The holdown in growth would take 70 years to reach that size. The current full retirement age for today's newborns (and anybody born in 1960 or later) is age 67.

    Furthermore, current law will force an actual cut in benefits eventually, under official projections. The Social Security trustees estimate that under current law, without a tax increase, all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042, and would continue to be cut each year thereafter. The Congressional Budget Office has a more optimistic projection, predicting that the trust fund wouldn't be exhausted until 2052 -- ten years later -- and that benefits would have to be cut only 22% at first.

    Footnote: Proposals to replace wage-indexing for initial retiree benefits should not be confused with the automatic cost-of-living adjustment (COLA). The COLA would not be affected. Once initial benefits are determined, they would continue to be adjusted annually to compensate for rising prices, just as today.

    Update: MoveOn.org's Newspaper Ad

    Update, Feb. 2: In a full-page newspaper ad in The New York Times MoveOn.org repeated its misleading claim, saying "Privatization means cuts of up to 46% in guaranteed benefits." It again failed to mention that the "cuts" would be in projected future growth of benefits, and would take 75 years to reach the 46% figure.

    The newspaper ad stuck much closer to fact when it stated that Social Security "can meet 100% of its obligations for the next 37 years with no changes to the current system, according to the Social Security Administration." That's true, though the system will begin to require infusions from general tax revenues after 2018 (or 2020, according to CBO) and those infusions will grow over time. The newspaper ad was also correct when it said "after 2042, the system reports it can pay more than 70% of benefits even if we do absolutely nothing." The Social Security Administration predicts that the Trust Fund can continue to pay full benefits until 2042 (another 37 years). After that, without additional revenue, benefits would have to be cut to 73 percent of what's currently promised, just as the newspaper ad says. Benefits would also have to be cut further in each future year, and would decline to 68% of promised benefits by 2078.

    Update: MoveOn.org Objects

    Also on Feb. 2, MoveOn.org strongly objected to our criticism of their TV ad. Tom Mattzie, the group's Washington, DC Director, wrote : "President Bush's plan cuts benefits compared to what workers would receive under current law. This implies very substantial reductions over time. . . . In referring to a cut against scheduled benefit levels, Move-on was using the standard framing for the whole debate."

    Whether that is "standard framing" or not, MoveOn's TV ad spoke only of "benefit cuts" without making clear that these were cuts "compared to what workers would receive under current law" 75 years from now (assuming taxes are increased to pay for them.) If the ad had made that clear we would not have criticized it so harshly. We still would have noted that benefits promised under current law are projected to nearly double in real, inflation-adjusted dollars by that time - crucial context for understanding the current debate.

    Mattzie also accuses us of inconsistency, stating that the MoveOn.org ad refers to "cuts" in the same way that we do later in our article. He points to our statement, for example, that "all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042." We think that sentence clearly refers to benefits in 2042, not current benefits.

    In line with our policy of providing opportunity for rebuttal to those we have criticized, we post the full text of the MoveOn.org rebuttal letter under "supporting documents" at right.


    Sources



    Jonathan Weisman and Mike Allen, "Social Security Formula Weighed; Bush Plan Likely to Cut Initial Benefits," Washington Post 4 Jan 2005: A1.

    Congressional Budget Office, "The Future Growth of Social Security: It's Not Just Society's Aging," 9 July 2003.

    "THE 2004 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND DISABILITY INSURANCE TRUST FUNDS," 23 March 2004: 8.

    Congressional Budget Office, "Updated Long-Term Projections for Social Security," Jan 2005.

    http://www.factcheck.org/article303.html#
    Thanks Beachnurse!.

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