William Larsen

How Candidates differ on Social Security

Elkhart Truth, April 16, 2006
Social Security
Larsen proposed repealing the automatic retirement benefits of the Social Security Act and using what's left in the fund for people with no other significant assets. "We exclude approximately half the beneficiaries today from collecting benefits," he said. "I expect people to be able to provide for themselves before they ask for help from the rest of us."

Instead of Social Security taxes, employers would put that money into IRAs for employees. Employees would keep the money they were paying in Social Security taxes as they see fit.

Souder expects Social Security to become a "capped benefit" where future benefits are given only to those below certain income levels. He said the solution is for people to start private retirement accounts and savings plans.

"What can we do taxwise to help encourage more people to set aside more money?" he said. "The pension systems ... need to reward people and create an incentive to earn additional income" after they reach "retirement age."

Smith proposes no changes to Social Security, other to having the government cease dipping into the fund for other things. "I think Social Security will be just fine if politicians keep their hands out of it," he said. The more they mess with it, the worse it gets."

Hayhurst and Boyd propose some changes to save Social Security, also calling to "lock up" the fund like Smith. They both propose having high-income people pay more into the fund right now since Social Security taxes hit poorer folks harder.

Hayhurst also thinks the government should promote private savings and investment, but not by privatizing Social Security.

Boyd also calls for doling out benefits to people based on what they otherwise have in reserve, so poorer people get the aid they need.

More workers pay more in Social Security Taxes than Federal Income Taxes. Social Security has stated for the past nine years in writing they can pay but 73 cents on every dollar promised. The amount of social security old age tax each worker pays would pay that worker over 90% of that workers pre tax payroll adjusted for inflation for life starting at age 67.

Here we have Souder's statement he believes it will be means tested in the future, but basically wants you the worker to save more using tax incentives, but wait in March 2006 they reported an $85.5 Billion deficit. In essence he wants to borrow money so you can save more - not smart.

Then we have Dr. Hayhurst and Reverend Boyd who want to stop spending the surplus and place it in a lock box. I guess neither of them realizes the Social Security Trustees assume the Trust Fund will be paid back in full with interest already and it still cannot pay scheduled benefits past 2041.

You have a choice:
Larsen admits there is no painless solution and allows you the worker to keep your Social Security taxes and what your employer is paying as well. This is on average $3,600 per year. Means test benefits based on assets now.

Souder says to borrow the money to allow for tax incentives so you can save. Cap benefits and means test in the future. What is his plan to pay back this borrowed money? Is it interest free?

Hayhurst locks up the surplus in a lock box and asks you the worker to save more while paying social security taxes.

What did they know and when did they know it?
The choice is yours. Those under age 46 out number all other voter groups combined.

posted by William Larsen @ 12:41 AM