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Registered: 06/15/02
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Key Lawmakers Cast Doubt on Social Security 'Crisis'
    #3669417 - 01/23/05 09:23 PM (11 years, 8 months ago)


Key Lawmakers Cast Doubt on Social Security 'Crisis'

2 hours, 45 minutes ago Top Stories - Reuters

By Adam Entous

WASHINGTON (Reuters) - Key Republicans in Congress on Sunday questioned White House assertions that the Social Security (news - web sites) system was in crisis, one of President Bush (news - web sites)'s justifications for acting now on private accounts, and said new taxes should be considered.

House Ways and Means Committee Chairman Bill Thomas said on NBC's "Meet the Press" that Congress should "look beyond" the payroll tax to fund the Social Security retirement system and consider a value-added tax and other changes.

Though Bush said he will oppose tax increases for Social Security, Sen. John McCain (news, bio, voting record), an Arizona Republican, told CBS's "Face the Nation" that a hike in payroll taxes "has got to be on the table" along with other financing options.

Thomas called the retirement system's finances a "problem" rather than a crisis, distancing himself from the crisis terminology used by the White House in seeking public support for creating private accounts.

"I think 'problem' really is what we're dealing with," said Thomas, when asked if he thought it was a crisis.

In a separate interview, moderate Republican Sen. Olympia Snowe (news, bio, voting record), of Maine, questioned the White House's proposals and strategy, a sign of trouble for Bush in the Senate.

Snowe said she does not object to personal savings accounts "per se," but told CNN: "I'm certainly not going to support diverting $2 trillion from Social Security into creating personal savings accounts."


A member of the Finance Committee, which will craft any Social Security legislation in the Senate, Snowe complained that the "public discussion thus far, without a specific proposal, has created and enhanced a lot of confusion and fear among seniors."

She said there are "various scenarios and interpretations" about the "urgency" of the Social Security problem, despite White House assertions.


The comments -- coming days after Bush's second inauguration -- cast doubt on the prospects of his Social Security plan. He will need moderate Republicans like Snowe to overcome stiff Democratic opposition in the Senate.

Democrats and other critics say Bush, by warning of a crisis, is trying to scare Americans into supporting his plan to let workers shift part of their Social Security payroll taxes into private accounts to invest in stocks and bonds.

Thomas said it would be "difficult" politically and "stupid" economically to raise the payroll tax to try to improve the system's finances.

One of Congress's most powerful voices on tax policy, he said upping payroll taxes or changing the retirement age "aren't long-term, permanent solutions," adding, "Why not look at other options?"

Asked where the money could come from, if not the payroll tax, Thomas pointed to value-added taxes on imports, like those used by some European nations.

"The United States is the world's largest importer and the world's largest exporter, and our tax system is out of sync with the rest of the world, ... That at least needs to be examined," Thomas said.

The Republican president has made revamping the 69-year-old Social Security system a top domestic priority, citing projections that it will run into the red in 2018 and will exhaust its trust fund by 2042 as the huge postwar "baby boom" generation retires.

Opponents counter that even under pessimistic scenarios, workers and employers would still pay into the system and benefits, although reduced, would still be paid.

On Sunday, Bush was at the Camp David presidential retreat preparing his State of the Union address, in which the Social Security overhaul is expected to figure prominently.

Thomas, a California Republican, caused a stir in Washington last week by accusing Democrats of "beating what will soon be a dead horse." On Sunday, Thomas said: "I didn't say it was dead on arrival."

Thomas said the president, at a recent economic forum, used the term "problem" 27 times to describe the Social Security system's finances, rather than the word "crisis."

But Bush said in December, "The crisis is now." And other top White House officials have used the term "crisis," or have called it a "crisis situation," including budget director Joshua Bolten and spokesman Scott McClellan.


After seeing some posts in this forum, I decided to read up a bit on Social Security. From what I have read, I think that the situation IS a crisis and not a problem. Anybody who asserts otherwise is ignoring the facts.

Social Security up until this point has taken in more money than it paid out. But in 2018, Social Security will start paying out more money than it takes in. Social Security has 1.5 trillion in assets. As Social Security starts to run into the red, it needs to cash in its assets to break even. As far as I know, all of its assets are federal government bonds. So, the federal government owes Social Security 1.5 trillion and it is paying interest on that money. When Social Security needs to cash in those government bonds, where the fuck is the federal government going to get the money to give to Social Security? The federal government will either have to raise taxes in some way, borrow more money from somewhere else, or cut spending in other areas. How is it going to do this?

This is the real crisis with Social Security; will the federal government be able to pay back all of that borrowed money so that Social Security can pay the bills?

For a government already deeply in debt this will be a hard task.

It's like giving all of your money to a crackhead and expecting that you will get it all back plus interest. It probably isn't going to happen.

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Miracle of Science

Registered: 10/25/04
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Re: Key Lawmakers Cast Doubt on Social Security 'Crisis' [Re: RandalFlagg]
    #3670094 - 01/24/05 12:44 AM (11 years, 8 months ago)

I met some Lyndon Larouche (sp?) supporters who believe Bush and co. are trying to rob Americans of their hard earned social security the same way the Chileans were robbed under the same model. (A lot of people call LaRouchies a cult, but one of my friends went to a couple of their meetings. He said they talked politics, physics, advanced mathematics, ancient civilization. Doesn't sound like a cult to me!)

Interesting read, even if you think they crazy:


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