Wednesday, June 30, 2010

FOXNews: Raise Social Security Age to 70 to Pay for War?

This is typical GOP rhetoric. Social Security is the FICA payroll tax that has nothing to do with US Income Tax. Social Security is more like a forced savings plan. Cutting Social Security (SS) benefits will not increase government revenues to pay for the war in Afghanistan that George W. Bush started.

At age 70, the average male would have about 14.9 years of life left. At age 60, the number would be 22.4 years according to the US Census bureau in 2006. The average American who retires at age 60 would have worked at least 40 years to reap the benefits of SS for the next 20 years.

Remember, you are not eligible for SS until age 62 so subtract two years from the 22.4 years. Under the Boehner Plan, an American would have to work 50 years to collect SS benefits for the next 15 years.

Why would the GOp even go there? Well, several billionaires recently met on Wall Street to develop plans to privatize Social Security. Anxious to realize the corporate profits of a privatized Social Security, and frustrated with President Bush's failure to convince the American public, these billionaires want Americans to disregard their best interests in support of Wall Street.

If you want a peek at what would happen under a privatized Social Security plan, look what happened to Americans who lost their jobs in the great Recession and tried to use their 401K plans to make ends meet. Many found up to one third of the 401K's plan' funds disappeared because there is no regulation of 401k management fees.

When Margaret Thatcher was the UK's PM, she privatized Social Security and it was an unmitigated disaster for the UK's senior citizens. Today, the UK version of the Social Security pension is about half of what seniors in the US get because of the horrible conservative privatization experiment with Social Security that went awry.

Social Security FICA tax is regressive. Because the tax has been capped over the years, the tax has been primarily paid by the Middle Class and the poor. The cap is now $108,500 and will need to be raised or the FICA tax reformed because Bush refused to raise the cap after he was elected in 2004.

It would make sense to lower the overall percentage of the payroll tax, tax one's complete income and to eliminate the cap altogether as Medicare is taxed.

This would assure the most affluent Americans are paying more into the Social Security trust fund who are being let off of the hook with the tax cap. This is why John Boehner doesn't think the affluent should get social Security.

You can be assured the GOP will never let this happen unless the affluent are also excused from paying the Social Security FICA tax altogether. It's when you start putting tax exemptions and loopholes into Social Security that the program will begin to fail.

Obama has also suggested a $250,000 FICA donut that would exempt the first $250,000 of income from FICA. This would, off course, shift the Social Security tax burden to the affluent. It is the opposite of how we fund Social Security today.

Democrats are slamming House Minority Leader John Boehner for reportedly saying the Social Security retirement age should be raised to pay for the Afghanistan war -- though Boehner's office vehemently denies he made that connection.

The comment came during an interview Monday with the Pittsburgh Tribune-Review. Boehner said the retirement age should be raised to 70 for those at least 20 years away from retirement and suggested wealthy taxpayers should not be receiving benefits at all.

"I think we need to look at the American people and explain to them that we're broke," Boehner said.

Though a video clip of his Social Security comments does not include any reference to Afghanistan, the newspaper's article on the interview said Boehner cast the changes as a way to pay for the war.

Democrats seized on the recent John Boehner interview, accusing Boehner of wanting to pay for war on the backs of seniors.

"The House Republican Leader John Boehner and his GOP colleagues want to raise the Social Security retirement age to 70 and cut benefits in order to pay for George Bush's war and their failed policies of the past,"
House Democratic Whip James Clyburn, D-S.C., said in a written statement. "Democrats will not stand for this."

House Speaker Nancy Pelosi's office put out a "fact sheet" accusing Boehner of wanting to "slash" Social Security not to stabilize the program but to pay for Iraq and Afghanistan - though Iraq was not me.


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