Trisha,
My feeling is that private accounts will not save social security. I think they'll do the opposite. They'll allow funds to be diverted from the social security trust fund by those who make enough to add to their private accounts, and those who don't make enough to do that, or are not "traditional retirees" won't be able to put enough into a private account to make a difference when they're ready to retire, or need the funds
Kendall.
-----Original Message-----
From: Trisha Cummings [mailto:[log in to unmask]]
Sent: Thu 3/31/2005 11:25 AM
To: [log in to unmask]
Cc:
Subject: Re: Question on SS
Thank Kendall,
And I would be curious to know, where you stand on this. I am still in the research phase, and wantt o hear people thoughts. I think more brains help with better decision making and clarifying ones position.
Trisha
-----Original Message-----
From: St. John's University Cerebral Palsy List
[mailto:[log in to unmask]]On Behalf Of Kendall David Corbett
Sent: Wednesday, March 30, 2005 2:41 PM
To: [log in to unmask]
Subject: Re: Question on SS
Trisha and Ken,=20
This is a fact sheet on changes in Social Security and the impact those
changes will potentially have on people with disabilities. I got the
fact sheet, and others on other issues at a conference I attended the
first of the month in DC sponsored by UCP, AUCD, AAMR, The Arc, and
another organization I'm blanking on now.
I'll paste the body of the fact sheet below as I'm not sure what various
people's servers will do to an attachment.
SOCIAL SECURITY REFORM
Background
People with severe disabilities are eligible for cash benefits
under the Social Security Act: Title II includes the Old Age, Survivors,
and Disability Insurance programs and Title XVI includes the
Supplemental Security Income (SSI) program. Generally, Title II
disability beneficiaries are eligible for the Title XVIII Medicare
program; SSI beneficiaries are eligible for the Title XIX Medicaid
program. Over 6 million people with disabilities receive Title II
benefits. Over 5.4 million people with disabilities receive SSI
benefits. Many people rely almost entirely on their cash benefits for
their daily needs and rely upon the medical benefits also available to
them. =20
Solvency of the Social Security Trust Funds
The disability community has consistently raised concerns about Social
Security reform proposals to address the long term solvency of the
Social Security Trust Funds. Numerous bills have been introduced in
several Congresses. In January 2001, the General Accounting Office
issued a report that addressed some of the disability community's
concerns about the negative impacts many of the reform proposals would
have on people with disabilities. In addition, in December 2001, the
President's Commission to Strengthen Social Security issued its final
report which only briefly addressed issues regarding the Social Security
Disability Insurance (DI) program and the SSI program. Throughout, the
disability community has sought to educate Members of Congress and other
policymakers about the importance of the Title II Old Age, Survivors,
and Disability Insurance (OASDI) programs to people with disabilities
and the potential impact of reform proposals on Title II beneficiaries
with disabilities.
More than one-third of all Social Security benefit payments are made to
over 17 million people who are non-retirees, including over 5 million
disabled workers, nearly 1.5 million children of disabled workers, and
over 750,000 disabled adult children covered by the survivors,
retirement, and disability programs. Other non-retirees include
non-disabled survivors and dependents. People with disabilities draw
benefits from all parts of the Title II trust funds:=20
* Disabled workers and their dependents, including their disabled
adult children, draw benefits from the DI program;=20
* Retirees with disabilities draw retirement benefits;
* Disabled dependents of retirees, including disabled adult
children, draw their benefits from the retirement program; and=20
* Disabled survivors, including disabled adult children and
widow(er)s, draw their benefits from the survivors program.
The Title II programs, as insurance against poverty, are
essential to the protection of people with disabilities. The programs
are unique in providing benefits to multiple beneficiaries and across
multiple generations under coverage earned by a single wage earner's
contributions. Workers earn coverage for themselves and their family
members through payment of Social Security taxes during their work
years. The insurance protection they receive is targeted to prevent
poverty in old age, in case of disability, or where there are dependent
survivors after the death of the worker or retiree. Proposals that
would partially or fully eliminate the current broad-based sharing of
risk (social insurance) and replace it with the risks of private
investment would be harmful to people with disabilities. Privatization
of the Social Security trust funds would shift the risks from the
federal government back to the individual, resulting in a devastating
impact on people with disabilities and their families. The basic safety
nets of retirement, survivors, and disability insurance must be
maintained.=20
In June 2004, the Congressional Budget Office released a report on the
financial state of the Social Security Trust Funds, finding that the
program will remain solvent longer than previously estimated. According
to the report, the long-range deficit in Social Security is only about
half as large as projected by the Social Security Trustees earlier in
the year. In addition, the Social Security Trust Funds will be able to
pay full benefits for almost 50 years, until 2052, a decade longer than
previously projected. =20
Action Taken by Congress and the Administration
In his 2005 State of the Union address, President Bush argued that the
Social Security system is in crisis and revealed some of the details of
his proposal for privatizing a portion of the Social Security trust
funds by creating private accounts for individuals. He indicated that,
under his plan, workers would be allowed to put 4 percent of their wages
into private retirement accounts rather than into the Social Security
trust funds. He did not indicate how the losses from the trust funds
would be paid for and he made no mention of what would happen to the
benefits of the more than 1/3 of beneficiaries who are not retirees,
including people with disabilities. Earlier that day, a senior
Administration official had indicated that the losses of trust fund
dollars from the diversion of funds into private accounts would result
in benefit cuts for those workers. In addition, the official admitted
that the private accounts would do nothing to restore solvency to the
trust funds over the 75-year period. Further, Vice President Cheney
acknowledged that the proposals would cost trillions of dollars over
several decades, in transition and other costs.=20
Subsequently, the White House has indicated that the private accounts
would be voluntary and would start gradually. The accounts would be
invested in a mix of conservative bond and stock funds and a "life-cycle
portfolio" would be available to shift investment allocations to
lower-risk investments when individuals near retirement age. There
would be fees for record keeping, which would be done by the government.
Private accounts would not be available until retirement and individuals
could not borrow against the funds in the account. Funds in the
accounts could not be withdrawn all at once at retirement, but would
have to be paid out over time. Individuals who do not choose personal
accounts would receive traditional Social Security retirement benefits,
adjusted to reflect changes to make the system solvent. The adjustment
could mean significant benefit cuts. Although President Bush was quoted
in a Washington Post article on January 16 that he has no intention of
making changes that would affect people who receive Social Security
disability or survivor benefits, no further details are included in the
White House fact sheet.
Further details of the proposal have not been released and the costs of
the private accounts proposal were not included in the President's
budget proposal for FY 2006. The Center on Budget and Policy Priorities
has estimated the costs of the President's proposal to be $4.9 trillion
over 20 years.
Some Congressional Committees have begun hearings on the Social Security
solvency issues. There has been no other Committee action on Social
Security solvency issues in this Congress. =20
Recommendation
The Congress should carefully assess the possible impact of any
Social Security reform proposals on people with disabilities who rely on
Title II programs. Advocates believe that changes necessary to bring the
trust funds into long-term solvency must not be so drastic as to
undermine or dismantle the basic social insurance structure of the
program. Eligibility and benefit levels for people with disabilities
throughout must be protected. Congress should request a beneficiary
impact statement on every major proposal, or component of a proposal,
under serious consideration. =20
Relevant Committees
House Ways and Means Committee
Senate Finance Committee
For more information, please contact The Arc and United Cerebral Palsy
Disability Policy Collaboration (202-783-2229), Association of
University Centers on Disabilities (301-588-8252), AAMR (202-387-1968),
or NACDD (202-347-1234).
2/2005=20
If anyone wants more info, just drop me an e, either on the list, or
personally.
Kendall Corbett
[log in to unmask]
An unreasonable man (but my wife says that's redundant!)
The reasonable man adapts himself to the world; the unreasonable one
persists in trying to adapt the world to himself. Therefore, all
progress depends on the unreasonable man.
-George Bernard Shaw 1856-1950
-----Original Message-----
From: ken barber [mailto:[log in to unmask]]=20
Sent: Wednesday, March 30, 2005 9:36 AM
To: [log in to unmask]
Subject: Re: Question on SS
I have not heard the disabled addressed. Only the
people over 55 have been told that they will see no
change. So I do not know why ARRP should be concerned
at all. The younget ones will be given options to have
some 2-4 % of their total SS tax put into a private
account to earn more. I can only say that in the early
80's 6 local municipal and county governments opted
out of SS under a loophole that was promptly closed.
Those 6 have people getting raises when they retire.
Yes, more retired than they were getting while
working. Also the country of argentina had a SS plan
modeled after ours, but, privatized in in the early
90's and were viewed with much suspician. It has been
very successful. The investment choices in all of
these are much the same as being proposed now.
Yes, trish you are right about SS being a pool of
worker paying for present retirees. It was set up by
FDR that way, but his origional plan was to gradually
have it go private later because of the great
depression. Later was put off by the WWII, and then
later was put off again until later is finally now.
The SS taxes come in and the benefits are paid out.
The surplus left has been and is being spent on other
things with thre Treasury giving SS a IOU. The IOUS
are stored in a vault in West Virginia. That is the
famous "lock box." No money, just IOUS when the taxes
have been raised in the past, congress has continued
to used the overage AND GIVE ss IOU'S. here is the
problem. Now the pool of worker has gotten thin. In
the beginning of SS over 15 workers supported one
retiree. Now it is down to 3 worker are supporting one
retiree. It will soon be two workers supporting one
retiree. According to who you listen to, in 2018 the
first deficet in taxes to benefits will occur. The
treasury will have to start making good those IOUs.
But the money was not invested and is spent. The IOU'S
will have to be paid by income tax or increased SS
taxes, Or benefits dropped to hold down the number of
IOU'S call in. private accounts or not, this problem
is there. The more boomer retire the more IOU'S called
in to cover them, the more pressure on general fund
becosed the money was not invested to cover this.
President Clinton called this a Crisis: no one really
wants to take the medicine.
How to fix it? That is the rub.
And again, I have thought about but, not heard
anything on how the disabled would be treated.
--- Trisha Cummings <[log in to unmask]> wrote:
> Greetings,
>
> While skimming the washingtonpost.com today - I
> see AARP is against the SS reform Bush is trying
> for. I am concerned if it is overhauled in this
> manner - what happens to all the disabled and kids
> on SSI - who don't contribute but draw off it? My
> understanding of SS is its a large pool we workers
> contribute to and the money goes to the ones who are
> retired, disabled and children. If I invest the
> money for myself - how does that help anyone else? I
> don't want to start an argrument - but I would like
> to hear opinions. I am seriously concerned for the
> disabled and the kids, and those old people who live
> off SS.
>
> Trisha
>
>
>
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