Social Security to become key issue
Just a recap of some simple facts:
- The Social Security trust fund will have annual shortage beginning in 2017. By 2041, the funds would run dry of its surplus reserve that has accumulated throughout the years (and has been borrow by the Federal government to fund budget deficits). Under current law, an automatic benefit cut would follow thereafter.
- In 2005, Bush urged Congress to reduce promised benefits for future upper-income retirees. In addition, he called for creation of private accounts funded with a portion of workers' payroll taxes. The plan went nowhere.
- Sens. Hillary Clintan was criticized of ducking the issues or being inconsistent of her opinion. She had declined to state a position on higher taxes in an earlier debate but then told an Iowa voter she would consider them.
- Barack Obama said over the summer, "we don't need to cut benefits or raise the retirement age," a position that flatly rules out neither approach.
- In general, Democrats objected to the "privatization" of Social Security and many of them talk favorably about raising payroll taxes for upper-income wage earners. For instance, some argued that the tax should be restored for money income above $200,000, after the waiver gap between &97,500 and about $200,000.
- Among Republicans, higher taxes is a non-starter. Mike Huckabee advocates giving an option of declining retirees' benefits, and instead have Social Security issue a lamp sum payment at their death, with the money going to their children or grandchildren. [Sound a weird idea to me.]