Kerry hints at reform for Social Security

WEBSTER CITY, Iowa -- Declaring ''I am blessed to be wealthy,'' Senator John F. Kerry said that, if elected president, he would consider some form of means-testing for rich Americans as part of a broader review of ideas to shore up the Social Security system.

The Massachusetts Democrat told a group of Hamilton County political activists late Tuesday that one idea bearing exploration is eliminating Social Security payments to the wealthy after they have recouped the money they paid into the federal retirement program during their working life.

''Rich people are getting checks from poor people, well beyond what they put into the system,'' said Kerry, a millionaire in his own right and the husband of Teresa Heinz Kerry. She is a philanthropist and heiress to the Heinz ketchup empire whose net worth has been estimated at more than $550 million.

Kerry said he had a right to recoup his personal tax payments into the retirement system but no need for government support beyond that.

A spokeswoman for the AARP said that the nonpartisan association would not comment on candidates' positions, but added that it did not support means-testing for Social Security recipients.

more: http://www.boston.com/dailyglobe2/226/nation/Kerry_hints_at_reform_for_Social_Security-.shtml

the system will lose the support of the nation!!The system has broad-based support because EVERYONE benefits.

Besides, one cannot be sure of being wealthy forever. He ought to visit "Enron Country" retirees, who were pulling down $3000-$4000 a month retirement incomes w/o SS, and now have only their $1000 SS to keep them from starving...

Kerry, you have once again proven that you are unfit to be President. You do not have "the general welfare" in mind.

I think it's a great idea. The analysis is not complete and so far so good.

Means testing should apply at neither end. Every dollar of income, no matter the source, should be FICA'd, and everyone, no matter their income, should be able to draw a pension. Perhaps the better-off might choose, as a gesture, not to apply for one, but it should be their choice and their right.

If you examine more closely the ideas Kerry said he would be willing to consider I think you'll find you are being too harsh.

The Massachusetts Democrat told a group of Hamilton County political activists late Tuesday that one idea bearing exploration is eliminating Social Security payments to the wealthy after they have recouped the money they paid into the federal retirement program during their working life.

Everyone would still be benefiting, everyone still would recoup their payments. But beyond that, it seems reasonable not to have poor people help pay to make rich people's retirement richer. And it seems obvious that the 'means-testing' would have to be an ongoing process, if you no longer have the means, so be it.

Another idea Kerry said he would consider is raising the cut-off point after which people no longer pay into the system. Americans pay Social Security taxes only on the first $86,000 they earn in a year. Kerry said he has heard suggestions about raising that threshold as a way of building up the fund for the pending retirement of the baby boom generation.

This seems like a sensible suggestion. I think most Democrats would go for this idea. Good contrast with the Republicans, on this issue, I'm sure.

But tinkering with Social Security is considered akin to touching the third rail in politics, because poorer Americans have relied on the program since it was instituted by President Franklin D. Roosevelt in 1935. And older Americans who are receiving Social Security checks are an active and potent group of voters.

Kerry presented his ideas in response to an audience question. Aware of the potential political peril, he took pains to couch his remarks, both to the county Democrats and to a group of reporters who interviewed him after the appearance.

He said he has not committed to the ideas and would consider them only after assembling ''a group of wise souls who've been through the process'' to conduct a larger review of Social Security.

Careful, yes, but he didn't duck the issue.

Kerry also said he has decided against two ideas that have already generated protests: raising the full Social Security retirement age beyond 67, and reducing the payments made under the program.

In addition, the senator said his administration would not consider privatizing Social Security, as President Bush has advocated, which would allow individuals to invest a portion of their Social Security taxes in the stock market.

I like what he has to say here.

http://www.boston.com/dailyglobe2/226/nation/Kerry_hints_at_reform_for_Social_Security-.shtml

"Means testing" means cuts in benefits. It also means the program will become non-universal and therefore easier to disparage and cut, like any other welfare program. Dean's suggestion of lifting the cap on social security (FICA) taxes, which really does benefit the wealthier, is a much better, and progressive, idea.

While on paper this looks good. I think this reform would make it easier to talk folks (starting with the ones who won't be benefiting after this reform) into trashing the whole system at a later point. And setting it up to exclude only the extremely wealthy (who only make up about 1% of the U.S. population) isn't going to save much money.

Wealth Inequality Charts
http://www.ufenet.org/research/wealth_charts.html

How do you stand on this?

Another idea Kerry said he would consider is raising the cut-off point after which people no longer pay into the system. Americans pay Social Security taxes only on the first $86,000 they earn in a year. Kerry said he has heard suggestions about raising that threshold as a way of building up the fund for the pending retirement of the baby boom generation.

taxable income all along and I agree with him.

Those who are barely making it economically have their entire taxable income taxed, so should those who are well off. 86K a year doesn't make you rich but it's comfortable and, more importantly, people with 86 billion in income would also only be taxed on the first 86K of their income with our current system. Tax all income so we can care for all our citizens. It's the right thing to do.

…
As President, I will be committed to preserving the integrity and long-term stability of the Social Security Trust Fund. I will oppose privatizing the Social Security System. And I will pursue a responsible economic agenda, and under my plan we will never have to consider raising the retirement age.

The long-term future of Social Security and financial security for all of us in our retirement years depends on ensuring a healthy rate of economic growth over the next several decades. Even a modest increase in long-term growth rates will ease the burden on the Social Security Trust Fund. If we do need to bring more money into Social Security, then I'm prepared to look at reasonable options for expanding the ceiling on payroll taxes.

The best guarantee for our Social Security, therefore, is an economic plan with three basic principles:

First, we must create economic growth and jobs new jobs, more jobs, and better jobs for Americans;

Second, we must return to fiscal sanity, for the sake of future generations, yes but also for the sake of our very national security. We cannot be a world-class country if we are the world's largest debtor;

Finally, we must reform our tax system. When I am President, I will work to repeal the top heavy Bush tax cuts, and replace them with a system that is fairer, and simpler, and places less of a burden on working Americans who live off their paychecks.
…
http://www.deanforamerica.com/site/News2?page=NewsArticle&id=7343

It's nice when once in a while, the candidates agree.

Even if it means less for us to argue about.

I try to be as optimistic as I can.

The payroll tax raises back in the 80's was supposed to be for the baby boomers. Then we raised income taxes in the 90's which mostly made it so we didn't have to keep robbing social security which allowed it to build into a surplus. Bush gave all of that to the rich people. Now we have to do it all over again. This is getting annoying.

thats deans suggestions?

He sure has I saw him hear it from Dean. Sounds like a great idea! Ill give kerry credit though he does seem to recognize a good idea when he hears one! If he keeps watching Dean he might even be able to win this thing!

Social Security Insurance.

I don't get my premiums back when I don't have a claim to file. And it is not only for old age, it is also in case a parent dies or if you're disabled or if you have a child with a disability. It's insurance, if you don't have a claim, you don't get it.

(I'm really not that tough about it, it's just flying it up the flagpole sort of thing. Don't bother arguing too much about it)

Yes, after 65 you can draw your full benefit amount no matter how much (or how little) other income you have.

But for the child with a disability, if his/her family income rises above a certain (fairly moderate) amount, they lose the social security payment.

Not sure about the two cases, except I believe the disability payment is based on an average of your last five (?) years of income, rather than total lifetime earnings.

I understand SSI isn't administrated like insurance, but people do need to be reminded that not really a retirement program. It's called Old Age, Disability and Survivors Insurance and was designed to replace lost income. If senior income isn't lost, there's really no reason for them to be eligible to file a claim. Why do wealthy, and I mean very wealthy, senior citizens think they have to get everything back they paid in when that child with a disability doesn't get everything their parents paid in?

It's all in how somebody is willing to change their thinking on something that has been engrained in our heads.

I think raising or eliminating the cap is a better one. The first makes SS into a welfare program which will undercut its support. The second doesn't. He also could simply tax SS above a certain income at a pretty high rate. This would solve the riches to rags problem that others have mentioned.

would also help to equalize the percentage of tax paid by each person.

If a claim can be filed based on the intent of the program, to replace lost income, then a person with sufficient income doesn't have a basis for a claim. That amount of income should be high, in the $75,000 area, to take away any hint that it's welfare. Besides, there are a number of people who actually do think of it as nothing more than a welfare style entitlement anyway. To remind people that it's Old Age, Disability and Survivor Insurance would be quite helpful to get people to see its importance from the moment they start working.

If people stopped looking at it as a retirement program, maybe they'd start planning for their own retirement a bit more seriously and live in a way that builds wealth instead of consume, consume, consume.

I would like to see the weathier people taxed on their income (outside of Social Security. Any Social Security cuts are bad. In 1983, they eliminated Social Security for people (including postal workers) drawing a government pension. As a result a lot of hard-wroking people lost their Social Security and had to continue working as their pensions were below poverty level. I think the idea suggested in the article could backfire and be used as a soundbite against Kerry. I hope he turns around and makes strong statements in favor of Social Security. I'm not supporting him but I think he needs to avoid making mistakes that the Republicans could use to destroy him with the seniors if he wants to be President.