http://www.american-reporter.com/

Vol. 11, No. 2,596W - The American Reporter - March 6, 2005

On Native Ground
A DISINFORMATION CAMPAIGN CREATED THE SOCIAL SECURITY 'CRISIS'
by Randolph T. Holhut
American Reporter Correspondent
Dummerston, Vt.

I don't "recall" posting whether it was a crisis or not, as I would chose to let each person decide that for themshelves

Just posted this since I subscribe to the paper, and had seen discussions about this subject matter previously.

Doesn't affect me, or my family, personally....therefore, I have no judgement what-so-ever!!

The other is an opinion on the issue and does a good job of expressing the author's position.

We should all be aware of these problems and read all kinds of discussions and then
Contact our Congress people to tell them how we want them to vote on the issue.

It was made clear the those on DISABILITY payments would NOT be affected by the private accounts during this committee meeting.

Disability benefits tangle Social Security debate
Monday, March 07, 2005

By Pamela Gaynor, Pittsburgh Post-Gazette

Blaine Stanziana remembers little about the accident that brought his working life to an end at age 30.

A paint shop employee at the former Volkswagen plant in New Stanton, Stanziana, now 47, was standing on a platform above the production line when an epileptic seizure sent him reeling backward, headlong onto the concrete floor six feet below.

By the time he was discharged from the hospital, the head trauma, which caused bleeding in his brain, along with injuries to his neck, left him with pain and balance problems so severe he was unable to continue working.

Almost ever since, Stanziana has been receiving disability benefits from Social Security -- an insurance component of the 75-year old retirement program that he said he knew nothing about until his accident.

But advocates for the disabled fear some benefits for the millions of disabled such as Stanziana and others who may become disabled could be at risk under the Bush administration's push to overhaul Social Security.

There are some 6.2 million workers on disability, who, along with their dependents, receive $76.2 billion, or 15.6 percent, of the annual benefits Social Security provides.

Before President Bush formalized his call for partial privatization of Social Security in his State of the Union address in January, most proponents of the plan said that the disability insurance program should be left off the table when Congress deliberates any changes.

Since then, however, many questions have been raised about how, or even whether, it is possible to do so.

"I'm concerned about anything that would undermine the [Social Security] trust funds," said Andrew Imparato, president of the American Association of People with Disabilities.

Imparato said the Bush administration's plan, which encourages younger people to shift as much of a third of their payroll taxes to private accounts, could accelerate the date when trust funds might be tapped.

Social Security's disability program is expected to run deficits by 2009 -- sooner than the retirement program, whose income from payroll taxes is expected fall short of expenses by 2018.

"It is very hard to make changes in Social Security retirement benefits without also making changes in disability because it's an integrated system," said Jason Furman, a senior research fellow who specializes in Social Security issues for the Center on Budget and Policy Priorities, a liberal policy research organization in Washington, D.C.

Not everyone agrees. David John, a Social Security expert at the conservative Heritage Foundation, in Washington, said Congress need not tackle disability to overhaul Social Security's retirement program. "We aren't talking about changing [disability] at all" under president's overhaul initiative.

However, he added, Social Security's disability program, with deficits looming in four or five years, "at some point does need reform."

President Bush's Social Security plan calls for a combination of benefit cuts for future retirees who are not yet 55 and for creation of private accounts to which they could contribute as much as a third of their payroll taxes. The president contends the private accounts would give younger workers the chance to make up any benefit reductions through higher returns on the private account investments than are generated by Social Security.

The proposal poses "a long list of questions [about disability] that sort of compound on each other," said Bruce Schobel, who studies disability insurance programs for the American Academy of Actuaries and formerly served as a senior policy advisor at the Social Security Administration.

Most of them concern what happens to disabled workers' benefits once they reach retirement age.

Under the current system, disabled workers do not lose any benefits.

But, under the proposal that many believe President Bush favors, the White House commission that recommended options for overhauling Social Security applied the same cuts to benefits for future retirees who are disabled as it did for those who are not.

There's nothing to stop Congress from simply maintaining future retirement benefits for those who already are disabled.

But preserving them poses other problems.

Among them, "You're going to have issues of treating retirees who are disabled differently than those who are not," Schobel said.

Disability advocates do not want to see retirement benefits reduced for disabled people. But they also worry that perceived inequities in the way disabled retirees are treated could set them up for attack anyway.

If disproportionate Social Security benefits are going to disabled retirees, "It puts it in the limelight to try to figure out ways to reduce the costs of the disability program," said Marta Russell, author of "Beyond Ramps: Disability at the End of the Social Contract."

Russell, who is disabled with cerebral palsy, said the use of private accounts to offset future benefit reductions also could shortchange younger workers who are healthy now but become disabled before retirement.

Such workers who opt to participate in the private account option could be hurt two ways. Not only would they accrue fewer years of private savings than someone who remains healthy until retirement, they also would see their guaranteed benefits from Social Security reduced.

Nor is that the only problem private accounts raise, said Schobel.

He said no one has yet said whether workers would be permitted to tap their private accounts when they became disabled.

If they were permitted to do so -- for medical expenses, for example -- and eventually became well enough to return to work, their retirement savings could be too diminished to offset future benefit cuts.

"It seems like a simple question, but the answer is far from obvious," Schobel said.

If all of the questions the Bush plan raises are troubling to experts, they are equally disturbing to those who are disabled.

Stanziana, the former Volkswagen worker, said he was unaware that the proposed overhaul of Social Security could affect his benefits when he retires.

But the possibility concerns him. "No one wants to see their payments go down, with rising costs. Social Security basically just gives you enough to survive. It's no free ride," he said.

Stanziana said he also was able to collect workers' compensation because his injury proved to be job-related. A previous accident at the Volkswagen plant that had injured his head was responsible for his epileptic seizure, he said.

But workers who become disabled from illnesses and injuries unrelated to their jobs often have no coverage other than Social Security.

Stanziana said it was only after his workers' compensation attorney told him he likely would be eligible for Social Security disability that he knew anything about the program.

Social Security is not going broke. We need the administration to pay back the money they took out of the TRUST FUND.

The Trust Fund was never to be touched, but the greedy could not stand for the money to just sit there. This has been many administrations.

B Y F A R N U M B R O W N

In signature style, the Bush administration is once again selling us a pig in a poke, promising it'll make bacon. As with Iraq, the administration's proposals for "reforming" Social Security are a tissue of lies designed to promote a radical policy agenda while masking it from the public.
March 2, 2005

T H E B U S I N E S S


At the heart of the president's plan is a proposal to allow taxpayers to divert a portion of their social security taxes to private accounts they can invest in stocks. The administration rests its case for private accounts on Four Big Lies.

Lie No. 1: Social Security faces a crisis that demands immediate, dramatic measures.

Social Security is "in crisis" in much the way that Saddam Hussein had weapons of mass destruction. That is, as useful fiction. The facts of the matter are these. As the baby boom generation retires, there will come a point when there aren't enough workers still paying Social Security taxes to cover the boomers' Social Security benefits. This will happen around 2018.

At that point a Social Security trust fund, which has been collecting surplus taxes to meet this shortfall, will have to be tapped. By using the trust fund to supplement revenues, the government can pay all Social Security benefits for four decades or so. At the point when the trust fund is exhausted, Social Security revenues would cover only about 75 percent of the benefits currently promised by the system.

As any honest analyst will agree, fixing this problem doesn't require heroic efforts. Over time you could make small changes in one or more of the following ways: a) increase the age at which Social Security benefits commence; b) raise the cap for income that's subject to Social Security tax; c) reduce benefits; d) increase the Social Security tax rate. In 1981, the last time the system needed tweaking, President Reagan chose "a" and "d." President Bush could do the same.

Of course there's a simpler solution still. Congress could repeal the tax cuts for the richest 1 percent of Americans that President Bush pushed through in his first term and redirect those revenues to Social Security. That would do the trick. But the president doesn't favor this solution.

Lie No. 2: Private accounts will save Social Security.

In the debate over Social Security, this canard is doing the work that "Saddam attacked the World Trade Center" did in the prelude to war in Iraq. More insinuated than asserted, the notion has a simplicity and emotional appeal that sell the administration's proposals despite being patently false. David Walker, comptroller general of the non-partisan U.S. Government Accountability Office, put it most plainly: "The creation of private accounts for Social Security will not deal with the solvency and sustainability of the Social Security Fund." In fact, it will make things worse.

Think about it. By allowing taxpayers to divert up to a third of their Social Security taxes into private accounts, the government will reduce revenues to a Social Security fund already "in crisis." And yet President Bush has vowed not to cut benefits for folks near retirement (55) at the time the plan takes effect. So on the Bush plan, the government faces the same benefit demands for a long time--20 years anyway--while having even less tax revenues to meet them. The revenue shortfall caused by private accounts over the next 20 years would come to something in the $2 trillion range, which amount would have to be borrowed by the government.

The real sucker punch is that even after putting future generations in hock for $2 trillion, President Bush's plan doesn't "save" Social Security. Benefits will still have to be cut, a reality private accounts will only hasten.

Lie No. 3: Allowing individuals to divert Social Security taxes into stock investments will make up for reduced future Social Security benefits.

The kernel of truth in President Bush's plan is that stocks historically have earned much higher returns than bonds. This being the case, it makes sense that the Social Security trust fund assets could grow faster over time if they were invested in stocks and bonds instead of in bonds only, as has been the case. Faster growth of trust fund assets could offset a future decline in Social Security tax revenues and so support a higher level of benefit. This is a plausible argument. Only it happens not to be one for private accounts.

The Social Security Administration could itself invest a portion of trust fund assets in stocks just as it now does in bonds. While the government might thus reap the benefits of superior stock returns, the odds of individuals doing so are much lower, for two main reasons. The first is cost.

The president's own Commission to Strengthen Social Security concluded the administrative costs of individual accounts would be 10 to 30 times more than the costs of administering the current system. Which makes sense. You'll pay much lower fees on one vast account than you will on 150 million small ones. High administrative costs (plus outright gouging) have plagued private accounts in Chile and England, cutting deeply into the superior returns advertised for stocks.

Equally important is the disadvantage individuals face as decision-makers over their investments. As someone with 20 years of professional investment experience, I can tell you that most people--even highly educated, financially sophisticated people--are lousy decision-makers when it comes to investing. Most notably, they panic in market declines and sell their stock holdings, thinking they'll buy back in when the market is acting better.

Empirical studies have shown time and again that such tactics--if panic can be called a tactic--dramatically reduce the returns from stocks and thus their advantage versus bonds. The federal government could avoid such emotionalism by adopting a mandate that a fixed percentage of Social Security assets be invested in stocks at all times. So why doesn't President Bush simply let the Social Security Administration invest a portion of the trust fund in stocks, as President Clinton contemplated? Well, because...

Lie No. 4: It's your money.

By referring to the Social Security taxes Americans pay as "your money," the president shrewdly casts Social Security as a kind of savings plan. You pay a certain amount in; you get a certain amount back at retirement. If this were the whole story, one might well ask rhetorically, as the president does, why the government should be handling "your money" that you've saved for retirement.

But Social Security wasn't devised as a savings plan. It was designed as an insurance plan to protect the elderly in our society from poverty. The Social Security taxes you pay are thus better thought of as insurance premiums than savings deposits.

And there's a big difference. Indeed, it's the absolute crux of the matter.

Insurance plans reduce the cost of any one person dealing with a potential misfortune--whether car wrecks or cancer--by sharing the risk and cost of that misfortune with others. To work, an insurance plan has to have members who'll turn out not to need it. Their premiums go to pay the claims made by others who do. This is how Social Security works. A poor person who lives long can draw more in benefits than he ever paid in Social Security taxes while a rich person who dies young doesn't get any benefits for the taxes he paid.

This is what Republicans don't like about Social Security: It's an insurance policy that they, as the party of wealth, believe they'll never need. They'd much prefer to shoulder the cost of their old age through their own personal savings. And they want everyone else to do the same.

This is what they're selling under the guise of private accounts, and it amounts to a radical shift in policy from a plan where risks and costs are shared to one where they are not.

So the next time you hear President Bush talking about his vision of an "ownership society," remember that what he really has in mind is a society where you're on your own.

After reading many articles on the subject I thought I'd post a link to one on the subject.

Ann, I agree with you, we should all be aware of the issues and become educated on matters such as this.

That's fine..no defensive posture taken!!

I don't know if you recall some months' back, around election time, all the political rants and rages about who's party was right....on and on!!

Though it's certainly not a bad idea for lyme sufferers who are feeling some **lyme rage** to be able to release some of this rage( harmlessly) on Lymenet( much safer to vent here than at home or at your place of employment)I just didn't want to see that starting here again!!!

Some facts about SOCIAL SECURITY you might not know.

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA)
Program. He promised:

1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400
of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program
would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund"
rather than into the General operating fund, and therefore, would only be
used to fund the Social Security Retirement Program, and no other
Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving
a Social Security check every month -- and then finding that we are
getting taxed on 85% of the money we paid to the Federal government
to "put away," you may be interested in the following:

Q: Which Political Party took Social Security from the independent
"Trust" fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for
Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding
vote as President of the Senate, while he was Vice President of the U.S.

Q: Which Political Party decided to start giving annuity payments to immigrants?

A: That's right! Jimmy Carter and the Democratic Party. Immigrants
moved into this country, and at age 65, began to receive SSI
Social Security payments! The Democratic Party gave these payments
to them, even though they never paid a dime into it!

Then, after doing all this lying and thieving and violation
of the original contract (FICA), the Democrats turn
around and tell you that the Republicans want to take
your Social Security away!