Rahm Emanuel (Rep. Ill. Dem.) Supports Supplemental Accounts Linked to Social Security

Rahm Emanuel, chairman of the House Democratic Caucus, has apparently seen the wisdom of individual retirement savings accounts which are supplemental to Social Security. I, for one, applaud his conversion to this position.

In a Commentary article in the Wall Street Journal on September, 13, 2007, Mr. Emanuel called for voluntary personal savings accounts funded by a minimum 1% of compensation from each of the employee and employer. Under the proposal, employers would be required to establish the accounts, subject to the ability of employees to opt out. At least the initial 1% would be made on a tax deductible basis. He would also allow greater voluntary contributions. He is proposing that the accounts be invested in low cost funds similar to those used by the Federal Employees Thrift Plan.

I know that these ideas were proposed by others over the past couple of years, but as Ronald Reagan used to say, I don't care who gets the credit as long as the job gets done.

Mr. Emanuel sees his proposal as a start on finding long-term solutions to Social Security's funding issues. He acknowledges that finding sustained commitment to fiscal discipline and bipartisanship may be hard to come by in a presidential election year but he says"...while Americans wait for long-term answers on Social Security, we should act now to give them more ways to start building retirement savings of their own".

I agree. This is a good start.

Save Social Security.

Senator Clinton on Social Security

The following was posted by FreedomWorks. We need a plan to save Social Security not unrealistic promises to do nothing and not an increase in the payroll tax for young workers.



September 5, 2007 HILLARY CLINTON TO INCREASE TAXES TO PAY FOR SOCIAL SECURITY DISASTER?

FreedomWorks responds to Sen. Clinton's recent comments.For more information, call Adam Brandon at (202) 942-7698 or visit http://www.freedomworks.orgWashington, D.C. --

Democratic presidential candidate Hillary Clinton said today that she would not cut Social Security benefits, raise the retirement age, or allow personal accounts for workers. This leaves only one option: Clinton intends to raise taxes on hard-working Americans in order to pay for the $11.4 trillion in unfunded liabilities.Clinton has a history of inconsistency on the issue. The New York Times reported today that she said, "We need to get back to the fiscal responsibility of the 1990’s when we weren’t raiding the social security trust fund." But in March of this year, she voted against a bill that would have barred the government from pulling money from the fund. And despite voting to allow the government to continue to dip into the Social Security trust fund, Clinton has criticized businesses for not fully funding their pension plans and other obligations to workers. Businesses should fully fund their employees’ 401k plans, but we are confused as to why Senator Clinton, as an elected official with direct access to the Social Security money, refuses to live up to any such obligation herself. Clearly, Clinton recognizes that Social Security’s $11.4 trillion unfunded liability is a problem, but her implicit endorsement of raising taxes to pay for it isn’t the answer. FreedomWorks President Matt Kibbe stated, "Senator Clinton is eager to get her hands on more taxpayer dollars and to continue spending these dollars not on Social Security, but on her plans for HillaryCare and bigger government. Until she can show that she will stop raiding the current Social Security trust fund, taxpayers should not trust her with more of their hard-earned money."

What Do You Want to Know about Social Security Reform?

As the editor of this blog, it occurs to me that there may be many questions about Social Security reform. Why do we need it anyway? Isn't the present system working perfectly well? What can be done to make the system better? If you have been following this blog, you know that I believe reform of Social Security is essential. The sooner we start, the less costly it will be.

Following is a list of questions about which you may want additional information. I will summarize the responses to this blog and let you know what others are thinking about.

Do you want to know what happens to the taxes paid in by employees and employers?

Do you know that there has been a surplus accumulating since 1983? Do you want to know how those funds are handled by the federal government?

Are you concerned about what is likely to happen to those persons currently receiving Social Security with or without reform?

You know that most workers pay into the system from each paycheck. Do you know how that money is returned to them? Do you know what happens to the funds paid in by or on behalf of single people if they die before reaching Social Security age? Do you know that under the current system, workers subsidize non working spouses? (That may be a perfiectly acceptable social goal but is it economically justified?) Do you know that working spouses who earn less than the Social Security wage limit and who are married to a high wage earner actually do not receive a benefit based on their own taxes?

Are you concerned that if personal retirement accounts were instituted, people would invest foolishly and wind up with no retirement income? Do you have suggestions for avoiding that consequence?

Let me know what concerns you about the current system. Let me know why you think we need not make any changes, if that is your opinion.