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

To: Karen Lawrence who wrote (33609)	11/6/2004 12:33:20 PM
From: Karen Lawrence	Read Replies (1) \| Respond to of 173976

Bush's Social Security options: In the simplest reform plan, workers would be allowed to invest 2 percent of their taxable wages in personal accounts. This plan would leave the rest of the system essentially unchanged. The second option would let workers put 4 percent of their wages, up to $1,000 a year, into a personal account. The rest of their payroll taxes would be deposited into the existing Social Security fund, which holds special government bonds. This plan would also keep down costs by adjusting Social Security benefits to keep pace with price inflation instead of wages, which have risen more rapidly over time. A third proposal was similar to the second but required workers to deposit 1 percent of their earnings into retirement accounts before they could invest an additional 2.5 percent of their payroll taxes. Bush has yet to spell out which option he favors, but the second model has gotten the most attention. "When the commission returned its report, most people focused on the second one, because it's the most coherent," said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates fiscally responsible policies. Another hint that Bush might lean toward that second model? The White House's Council of Economic Advisers referenced the plan in a section on Social Security reform in its 2004 "Economic Report of the President." No matter what plan he chooses, any privatization would also come with so-called transition costs, the initial increase in the gap between worker contributions and retiree benefits that would result as workers send part of their payroll taxes into private accounts. Estimates of the gap vary -- it's the "$2 trillion hole" that Kerry refers to in his speeches -- but there's no question that money would have to be moved into the government system to make up for the money moved into private accounts. The bottom line? In the end, whether it's now or later, a generation of Americans has to pay. money.cnn.com