More social security changes

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Bush Stumps for Social Security Changes
February 10, 2005 8:33 AM EST

WASHINGTON - From politics to policy, it's campaign season all over again for President Bush. With the memories of last year's swing state campaign still fresh, the president is again winging from state to state, trying to win support for his proposed overhaul of the Social Security system.

He's pressuring senators who are wary of his plan to offer personal investment accounts to younger workers in return for scaled-back guaranteed retirement benefits. And he's doing it in the senators' own backyards.

Thursday, Bush was traveling to Blue Bell, Pa., home state of Republican Sen. Arlen Specter, who opposes cuts in promised benefits for future retirees.

Bush also was visiting Raleigh, N.C., where he was highlighting how Social Security could be a winning political issue. The president was appearing with Sen. Elizabeth Dole, R-N.C., who embraced private investment accounts in her 2002 campaign.

Whenever Dole's Democratic opponent, Erskine Bowles, criticized her proposal during the campaign, she simply held up a blank sheet of paper to represent his plan. He had nothing, she charged.

A guide distributed by the Senate and House Republican conferences during a retreat last week cited Dole as an example of how lawmakers could support personal accounts and survive their next election.

Still, Bush faces opposition to his plan for personal accounts from North Carolina Democrats. Rep. Bob Etheridge issued a statement admonishing the president for offering a "partisan political marketing ploy" that doesn't fix the problem and only creates massive costs and huge benefit cuts.

Bush's approach at the Social Security events has several goals. He tries to convince people that the problem is urgent, while trying to reassure people over 55 that they will get their promised benefits. And he tries to get people to act by contacting their elected officials.

In a visit to the Commerce Department on Wednesday, the president said younger workers "ought to be asking the members of the Congress and the president of the United States, what are you going to do to fix the problem."

Those who have been targeted by Bush's visits say so far they aren't feeling the heat. Last week, Bush tried to woo the backing of several Democratic lawmakers in a tour of five states that he won last fall.

But staff in the office of several of those senators said they haven't seen any increase in calls of support for Bush's ideas. Bryan Gulley, spokesman for Florida Sen. Bill Nelson, said they've seen the opposite - more people have been calling in against private accounts, perhaps because of newspaper ads opposing his plan that the AARP bought to coincide with Bush's visits.

Chris Thorne, spokesman for Sen. Kent Conrad, D-N.D., said there hadn't been any upswing in calls to the senator's office, although there was some response to Bush's visit - editorials in some North Dakota newspapers praised Conrad for standing firm against the president.

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On the Net:

http://www.whitehouse.gov

Scaling back guaranteed retirement benefits?
Can we just call it social INsecurity yet?

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AARP Schmarp.

If someone gives me the choice of investing part of my payroll taxes, I'm smart enough to opt in and reap the benefits in my old age. To those that do NOT want to take advantage of the plan, fine, that's your choice.

The facts are that it CAN work if implemented properly (just ask the government employees working in Galveston County, TX who opted out of SS almost 25 years ago).

Stick with SS in its current form if that's your desire and retire with much less than those of us who are willing to take the risk.

The Democrats made it impossible in 1983 for other municipalities to follow Galveston County's lead and leave the federal system, but those Texans smart enough to understand the stakes are now enjoying a return 400% greater than what they would have seen if they'd stuck with SS.

From a recent article I read on the Texas plan:

"Workers earning slightly more than $17,000 a year can retire at age 65 with a monthly payment of $1,285 compared with $782 a month under Social Security.

Workers earning $51,263 a year could retire at 65 with a monthly benefit of $3,846, while the same worker participating in Social Security would receive $1,540 each month."

Even though they have gone through double recessions in the 1980s, recessions in the 90s, and a tech boom and bust in the 1990s and into 2000, they've never lost money. With even the lowest "guaranteed rate of return", the Galveston plan has roughly doubled the rate of return of SS.

78% of the Galveston County municipal employees opted for the privatized accounts back in 1981, and if I'd been given that choice, I'd have been right there with them.

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http://cagle.slate.msn.com/working/050209/wright.gif

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JustWonders wrote:

From a recent article I read on the Texas plan:

"Workers earning slightly more than $17,000 a year can retire at age 65 with a monthly payment of $1,285 compared with $782 a month under Social Security.

Workers earning $51,263 a year could retire at 65 with a monthly benefit of $3,846, while the same worker participating in Social Security would receive $1,540 each month."

Are those monthly incomes CPI adjusted? Is a non working spouse eligible for an addition half benefit on the same earnings? Are disability and survivor benefits equivalent?

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From the article I read (I'd post the link, but it's been archived).......

Under Galveston's "Alternate Plan," the county withholds approximately six percent of each employee's salary for retirement. That money, along with a partial match by the county, is invested in personal accounts for each participating employee. The remaining county match covers the cost of disability and life insurance policies for employees, which also pay benefits much higher than those offered by Social Security.

And.....

In testimony before the President's Commission on Social Security in 2001, former Galveston County Judge Ray Holbrook relayed the story of a county commissioner who died in office.

According to Holbrook, the commissioner's widow received a $255 death benefit from Social Security. But under the Galveston Alternate Plan, she also received a lump-sum survivor's benefit of $150,000 and was entitled to her late-husband's $125,000 reserve account.

Holbrook's anecdote underscores another aspect touted by backers of private accounts -- that the money paid into them is the private property of the employee. As a result, private retirement account funds are passed on to an employee's heirs upon his or her death, unlike unpaid Social Security benefits, which are forfeited to the government.

First Financial Benefits administers the Galveston alternative plan, if you have questions.

But remember, since the plan's inception, they've gone through another recession, an attack on this country and wars in Afghanistan and Iraq, yet they have steadily provided income for people.

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So the answer to my questions is no?

Note: the $255 death benefit is NOT the only survivor benefit SS provides.

Quote:

Social Security survivors benefits can be paid to:

* A widow/widower-full benefits at full retirement age, or reduced benefits as early as age 60. A disabled widow/widower may receive benefits as early as age 50.
* A widow/widower at any age if he or she takes care of the deceased's child under age 16 or disabled, who receives Social Security benefits.
* Unmarried children under 18, or up to age 19 if they are attending elementary or secondary school full time. A child can receive benefits at any age if he or she was disabled before age 22 and remains disabled. Under certain circumstances, benefits can also be paid to stepchildren, grandchildren, or adopted children.
* Dependent parents at 62 or older.

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No, the answer to your question is contact the County of Galveston or First Financial Benefits if you have any questions not covered in the article.

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Am I to understand that the employees working for the county don't have to pay SS taxes? Is that even legal? Or is the Galveston county plan just another additional retirement plan that they get on top of social security?

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JW, I was just pointing out that you were making an apples to oranges comparison.

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Freeduck - apparently, it was legal to opt out of paying SS taxes for an alternate plan in 1981 (which is when the government employees of Galveston County chose it).

By 1983, local government workers in three nearby municipalities -- Brazoria and Matagorda Counties, and Texas City -- also voted to quit Social Security in favor of private retirement plans

The Social Security Administration estimates that, nationwide, seven million public employees opted out of the federal retirement plan before Congress (a Democrat-controlled Congress) eliminated that choice in 1983.

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mesquite - ok. Really, though, if you're interested in their plan, you should contact them. I will be. Are you under 55?

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Well past.

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Thanks for the extra details, JW. I was wondering how that was possible. Now I know.

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