The indexing plan Bush embraced at his April 28th press conference would preserve the present defined
benefit approach only for the low wage workers—those currently earning less than $20,000. For the remaining 70% the system would be flipped upside down: the
more you earn and pay in the more your benefits are cut.
The lowest workers would continue to have their future benefits linked to overall increase in wages; however,
the others would have their future benefit level linked to price increases. Prices
tend over time to rise about 2% slower than wages for a given worker. For a medium
wage worker entering the workforce now (retiring in 2055), their projected benefits would drop by 66%, higher earners 87%
Projected shortfall of 70% in 75 years is well beyond the range of secure projection.
There are other options to covering the projected shortfall than cutting benefits:
1). Lifting the cap on taxable income (now set at $90,000) to $150,000
would affect 6% of the taxpayers and would cut 40% of the projected shortfall.
2). Keeping the estate tax on those over $7,000,000 would affect
less than 1% of all estates but would trim shortfall by nearly 30%.
Robert Ball, former Social Security Commissioner says benefits don’t need to be cut because Congress in
1983 provided cuts by gradually increasing the retirement age, and by the steadily increasing Medicare Part B premiums which
are deducted from the social security check. Ball believes that long-term solvency
can be maintained with modest revenue increases alone.
More Bush Cuts
AARP Bulletin 3/05
Tim Gray
Bright
spots are scares in the $2.57 trillion budget proposal, which challenges Congress to curb spending while keeping Bush’s
tax cuts in place. The October budget is attempting to reduce the next fiscal’s
year deficit to only $427 billion.
Adult
literacy by 2/3
Amtrak by 70%
Energy
assistance for low income 10%
Housing
Elderly cut 25% from 2002 level
Disabled by 50%, and no new construction
Low-rent public housing unspecified percentage
Loans for building and restoring rental housing for the poor in rural areas 75%
Independent
living under the Older American Act (such as Meals on Wheels
& Family Caregiver Support) would be frozen to the 2002 level.
Jobs, funding cuts for the employment program that provides part-time, minimum-wage
job opportunities for low-income older people.
Medicare,
cut $60 billion over the next 10 years
Medical
research, cut 12% especially hitting preventive health programs
Nutrition,
over the next 10 years 200-000 to 300,000 would lose aid
Veterans’
drug costs, double co-pay and establish annual enrollment of
$250
TIBITS
Frequent-flier miles are estimate at $700 billion (14 trillion air miles); however, at the current
rate of redemption, it would take 25 years to use those already accumulated. Moreover,
such credit cards cost an average of $51 in annual fees and charge 6% higher interest.
