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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (4473)	2/28/2004 12:08:12 PM
From: Karen Lawrence	Read Replies (1) \| Respond to of 173976

Start rescue effort for Social Security February 28, 2004 indystar.com Our position is: Hard choices must be made to keep the Social Security system solvent long term. Alan Greenspan this week dared to voice a politically unpalatable reality: The retirement of 77 million baby boomers, beginning in just four years, will severely strain the Social Security system. Though few expect serious reform in a presidential election year, this is the right time to press for an honest debate. There are three options: raise taxes, cut benefits or get a higher rate of return through private investment. The Federal Reserve chairman reminded Congress that the nation will go from having slightly more than three workers supporting each retiree on Social Security to 2.25 workers by 2025. In 14 years, the program is projected to pay out more in benefits that it will collect in payroll taxes. Acting now to shore up the system, he stressed, would mean that current workers still have time to adjust retirement savings to deal with smaller benefits. The current payroll tax is 12.4 percent, and most of the funds that come in are immediately paid to beneficiaries. Ignoring the problem, Greenspan said, would lead to high budget deficits and interest rates, threatening the health of the economy. Among his suggestions: Switch from using the Consumer Price Index to a measure of inflation that better reflects economic reality. This would result in smaller cost-of-living increases to retirees. And continue to adjust upward the age for full benefits. A more radical proposal, released by the Cato Project on Social Security Choice last week, would allow individuals to divert half (6.2 percent) of their payroll taxes to private investment accounts. Anyone who wishes could stay in the traditional system, and benefits would not be reduced for current retirees. President Bush has proposed letting workers invest a smaller percentage of payroll taxes in private accounts. Every American has a stake in this debate. Older workers worry about whether they'll have enough for retirement. If adjustments aren't made, younger workers will be asked to shoulder an unfair burden. There are risks to transitioning to a private system, although other nations, including Chile, have done it successfully. A logical first step is to change the cost-of-living adjustment. We've been warned about the pending crisis for years. Time is running out.