GOP/Kasich call for cut in SS benefits) A New Index for Social Security

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http://www.nytimes.com/2004/12/01/opinion/01kasich.html?oref=login

A New Index for Social Security
By JOHN KASICH
Published: December 1, 2004
Columbus, Ohio — In all the confusion surrounding the current Social Security debate, there is one inescapable truth: Social Security is broken, and it's headed for disaster unless serious changes are made now.

While President Bush's commitment to saving the program was evident during the campaign and during his press conference after the election, his plans remain too vague to be called a solution. Similarly, there is no consensus in Congress to indicate that its members are willing to attack this problem. <snip>

Furthermore, benefits are growing faster than inflation (PLEASE NOTE THAT IS BY DESIGN AS THE IDEA IS THAT RETIREES SHARE IN THE ECONOMIC GROWTH REPRESENTED BY WAGE INCREASES). First-time Social Security benefits are now tied to wage growth, and wages are rising faster than prices. The result: over the next 75 years, benefits are expected to increase nearly eighteenfold, while prices will go up less than half that rate. In order to keep pace, our children and their children will have to work longer hours and pay more taxes. Between now and 2080, benefits will most likely exceed payroll taxes by $120 trillion. (POSSIBLE - BUT "MOST LIKELY"=ANOTHER LIE)<snip>


We should also create Social Security savings accounts for those under 55. Workers could invest some of their payroll taxes in their own savings account in a mixture of conservative stocks and bonds, much like members of Congress and federal employees do. In exchange for investing a part of their payroll taxes, workers would give up some of their future Social Security benefit - probably about 25 cents for every dollar invested. (GIVE-UP? BENEFITS OR JUST GIVE UP?)


John Kasich, a Republican representative from Ohio from 1983 to 2000, was chairman of the House Budget Committee.

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1. Meanwhile the WSJ says: People lose money in 401k's/ need education

Tom Lauricella reports "In the 23 years since 401(k) plans were first created, many people have made obvious mistakes in investing their money, such as putting too much money into low-yield savings accounts or betting the house on their own company's stock. Many also don't put as much money into the plans as they could, forgoing big tax savings and employers' matching contributions."

John Harwood: Rep. Tom Davis (R-VA) tells Harwood just how tough it might be for the president to push this through the Congress. Harwood says a lot more educating and coalition building is going to have to be done to make this a reality.