Strengthening Social Security - The President's Proposal
Give credit to President Bush for challenging the status quo and committing to tackling the thorny issue of Social Security reform. He has clearly stated that his administration is open to ideas and suggestions. The only declarative positions stated by the President are:
- All retirees and soon-to-be retirees will receive the Social Security benefits they expect and planned on receiving. There will be no changes for those born before 1950.
- No increase in the payroll tax rate, which has already been raised 22 times and failed to solve the funding challenge. The payroll tax is highly regressive and as it is raised it becomes a jobs tax.
- Permanent solution, not another temporary solution that must be revisited by future policymakers. The President wants to fix Social Security once and for all so that our children and grandchildren do not face these same problems.
- Voluntary Private Accounts for the younger generation, to offer the opportunity to earn higher benefits than the current system can afford, and to build a "nest egg" that they own.
President Bush is open to ideas. All of these options are on the table—suggestions include:
- Limiting benefits for wealthy retirees
- Indexing benefits to prices, instead of wages
- Increasing the retirement age
- Increasing the amount of wages subject to Social Security payroll taxes
- Changing the benefit formula to create disincentives for early retirement.