Social Security Bill Would Hike U.S. Debt

[maddezmom]

By GLEN JOHNSON, Associated Press Writer
54 minutes ago



WASHINGTON - The leading House bill to overhaul Social Security would marginally extend the program's solvency, but it would add $851 billion to the national debt over 11 years, according to an analysis released Friday by the system's chief actuary.


The bill calls for establishing personal retirement 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. Next year alone the program expects to receive $84.5 billion more in payroll taxes than it needs for monthly benefit checks.

Currently such money is spent on other government programs or budget priorities, including tax cuts or funding for the war in Iraq.

While the bill's Republican sponsors describe the legislation as "stopping the raid on Social Security" taxes, it would allow Congress to continue spending the surplus money through 2009, to ease the financial transition. At that time, a new central administrative authority would be empowered to expand the ways the money can be invested, as well as to propose an alternate means of financing the accounts.

more:http://news.yahoo.com/news?tmpl=story&u=/ap/20050715/ap_on_go_co/social_security_8

[Megahurtz]

1. That's probably the idea,

So then they can make more excuses to cut programs.

[TheFarseer]

2. LOL OMG and who started the raid on Social Security?

I suppose they are going to say that it won't add anything to the deficit because they will make cuts. Yeah, we'll just cut that study to find out on the mating habits of the Musk Ox and it will all be OK. I think they seriously believe that you can balance the budget if those weird studies you always hear about are eliminated.

Freepers are so funny and yet so tragic because they have no idea who is really screwing them.

[UpInArms]

9. flashing back to the past

http://www.baltimorechronicle.com/trifecta_jun02.shtml

excerpt:

Think back to the days before 9/11. The topic on everyone's lips (Condit aside) was: what will happen when budget realities force Bush to raid Social Security? He had explicitly promised during his campaign to establish a contingency fund for severe emergencies that would keep Social Security untouched. But the economy was tanking and the costs of the tax cut made the raid inevitable. Even Daniels acknowledged that the government would be forced to tap Social Security to the tune of $14 billion to fund pending legislation. Strangely, Bush kept insisting, "We can work together to avoid dipping into Social Security." But, beginning August 24, he gave himself an escape clause: "I've said that the only reason we should use Social Security funds is in case of an economic recession or war." (Three days earlier he had said that there should be "special consideration" in the budget for these contingencies. Otherwise, this was completely new rhetoric.)

<snip>

Then, on the morning of September 12, Bush announced his very first post-9/11 policy move. Because the attacks were "more than acts of terror; they were acts of war, this morning I am sending to Congress a request for emergency funding authority." On cue, pundits like Tim Russert chirped, "Suddenly the Social Security lockbox seems so trivial." Since then the trust fund has been strip-mined to subsidize pork barrel and deficit spending with no political fallout for the president.

These extraordinary coincidences have gone unremarked in the media, who have entirely missed that the terms of the "trifecta"--note that the word connotes something you bet on--was never mentioned until two-and-a-half weeks after Bush's August 6 briefing and days before 9/11. (He has since claimed the 'trifecta' was a campaign promise. This is a lie.) It is sickening to contemplate an administration intentionally looking the other way while terrorists scheme so that whatever havoc they wreak can provide cover for the president to raid Social Security. But we journalists are paid to have strong stomachs, and we should be hardy enough to admit that the scenario is conceivable, for three reasons.

...more...

[DemInDistress]

3. It was reported

the Chimperor used 145 billion in surplus social security monies this year..last year the chimp spent 130 billion of surplus monies..Why cant he leave his fucking fingers off extra surplus social security money..Al Gore called for a LOCK BOX for that money..and let's not forget TAX CUTS for the filthy rich,let's tax them again

[snippy]

4. This is Bush's privatization plan without the option to invest in stocks.

Bush's plan would have allowed people to invest in either stocks or bonds in a private account. This plan just takes away, for now, the option to invest in stocks. That will be changed if this plan passes. As for improving the solvency of the program, the only improvement is the result of benefit cuts under this plan.

The Social Security surplus should be invested by the Social Security Administration in a single account to improve the financial condition of the entire system without cutting benefits. Private accounts already exist and should be further encouraged. They are called IRAs and 401ks.

[Zorra]

5. Simply stop using SS money for other purposes. That's all they need

to do to guarantee long term solvency.

Interest alone on this enormous amount of capital would insure that SS would be solvent permanently, or at least until republicans figured out another way to steal it from us.

[TahitiNut]

6. If there were no Federal Debt, they'd have to invest the surplus ...

... SOMEWHERE. You just don't put the currency in a mayonaisse jar and bury it on the South Lawn ... no more than any bank deposit is just left lying around.

[Voltaire99]

7. Three ways to stop the drain.

1) Restore taxes for the wealthy
2) Collect taxes from corporations
3) End luxury spending on the military-industrial complex

Find me a candidate who backs such sane policies, and I'll vote for her.

[thecrow]

8. "..a new central administrative authority would..."

and who might this be????
TAX THE RICH AND
LEAVE SOCIAL SECURITY ALONE!!!!!!

[recidivist]

10. This is simply not true if you look at the long term.

The "transition cost" of shifting to a fully funded system is simply the cost of amortizing the ALREADY EXISTING unfunded liability in Social Security. The cost of doing that now is generally estimated at between $1-2 trillion, using President Bush's proposal as a baseline. There are other reform formulas (I personally do not think Bush's is the best), but it's still big money.

But the costs of doing nothing are higher. If we stand pat, Social Security goes into the red in a dozen or so years. Now, we all know the standpatters' mantra on that subject: "We use the Trust Fund." Since the Trust Fund is simply off budget debt, this means borrowing the money to repay the Trust Fund. On this course of action, the amount of borrowing between now and 2041, when the Trust Fund will be exhausted, is estimated at upwards of six trillion dollars.

There is a significant borrowing requirement either way, but the cost to fix the system now is substantially less than the cost of doing nothing. There are, however, two differences.

First, fixing the system means facing up to it now, instead of drifting along in a fools paradise for another decade. That scares people who would rather just kick the problem down the road.

Secondly, and more important, fixing the system now would at least get it fixed. Doing nothing incurs roughly three times the debt, and then requires a 27% (official estimate) benefit cut.

Fix it now. I know the Democratic leadership on the Hill has made a tactical decision to play rope-a-dope and attack Bush without putting their own plan on the table. I think that's wrong. It's a profoundly serious issue and we have to bite the bullet sooner or later. Along with health care and education, this is the key to the future. If Democrats want to be taken seriously as a governing party, we need to be willing to lead.