Bush Social Security Plan would require benefit cuts, tax increases or raising the retirement age according to GAO.
OK with me if we cut benefits for JLA, ProLife and others on this board who favor the plan. After all, I have mine. <g>
GAO: Social Security Reform May Mean Cuts
By LEIGH STROPE 01/15/2003 10:04:27 EST
Adding personal investment accounts to the Social Security system would require benefit cuts, tax increases or raising the retirement age, a General Accounting Office study said Wednesday.
Proposals by President Bush's Social Security Commission in 2001 also would require general revenue funds from the federal government for at least three decades - even if all Americans participated, the report said. The panel recommended, and Bush favors, a voluntary system.
A Senate committee analyzed the report and the various proposals to shore up future funding for Social Security by creating personal accounts. The cost to the government to overhaul the system, at a time when deficits are soaring again, make it unlikely that reform will occur soon.
The issue has become marred in politics, especially during last year's congressional elections, with a majority of Democrats strongly opposing personal accounts.
"Today's hearing gave the American public a chance to hear an objective and honest assessment of the tough choices facing Social Security," said Sen. John Breaux, D-La., who called the hearing and who supports private accounts. "Today's testimony allows us to remove ourselves from the political battles and remember why we are debating this issue to begin with - Social Security as we know it is heading for insolvency unless we act and act now."
The yearlong government study found that adding the accounts eventually would restore long-term funding to Social Security, but trade-offs would be required.
Those choices "will ultimately determine not just how much income retirees will have but also how long they will be expected to continue working and how long their retirements will be," said David Walker, the GAO's comptroller. "Reforms will determine how much consumption workers will give up during their working years to provide for more consumption during retirement."
He said the "window of opportunity" to make changes is closing, and that those hard choices will become even more difficult the longer Congress waits.
Reform is needed now "before the approaching demographic tidal wave makes the imbalances more difficult, dramatic, and disruptive," he said.
Social Security, a pay-as-you-go system, is expected to start paying out more in benefits than it collects in taxes by 2017. That's because the large Baby Boom generation starts retiring and the work force that keeps the system afloat through payroll taxes declines.
Investing in the stock market is one way to increase revenue, which "could improve the rates of return, but potentially expose individuals to investment risk and losses," Walker said.
Bush's agenda, minus Social Security, already is brimming over: a possible war with Iraq, a standoff with North Korea, a weak economy, a volatile stock market, domestic security, Medicare's problems and re-election.
Even supporters of personal accounts acknowledge that a major push from the White House is unlikely. David John, senior Social Security analyst with the Heritage Foundation, said that instead, he expects a "serious discussion" this year about personal accounts.
The 2004 presidential election also effectively removes the topic from next year's calendar, analysts say.
Any real action probably would come in 2005, John said. In the meantime, various proposals will be debated in Congress.
"I expect hearings, both in Washington and across the country," he said. "I expect there's going to be a major effort - in government and outside government - to have a comprehensive education campaign." |
