SSA Scoring of Rivlin-Domenici
by Bruce Webb
Well it is out and I have a copy. And no doubt in short order it will be up at the following web-page: http://www.ssa.gov/OACT/solvency/index.html but as of 10:43 AM PST it wasn’t. Because just like the SSA score of the Chairmen’s proposal there is a lag between release and web publication.
I’ll extract some tables and publish them in a future post but the results are very similar to the Simpson-Bowles Plan with the bottom line being a 75 year improvement in actuarial balance of 2.48% in the face of a current imbalance of 2.01%, that is there is a certain amount of over-kill if the problem is considered simply as one of solvency. For now I will leave you with this simple graphic from the score.
Beat me to it, thank heavens, because all I can do is hope for the cavalry. NancyO
This is The Atlantic’s report on Domenici and Rivlin’s plan, the only competition for Simpson-Bowles to emerge so far.
Bruce, I assume the graph is yours. Tell me if I am reading it correctly. It looks like the percent of TF ratio is 500% in 2090. Is this correct? And, does that mean that the TF would grow from the desired level of 1 year’s benefits on hand to 5 times that amount (and going up from there) over a 80 year period? That has to be wrong, because if true, the TF would continue to keep high-end income peoples’ taxes low while overtaxing those whose sole or primary source of income is derived from covered earnings. NancyO
Thanks, Bruce, once again. I look forward to more and something about the Schakowsky proposal, too.
No the graph is from the SSA letter/score. And does show a totally unnecessary padding of the TF balance as opposed to putting it on a glide path to 100 (the legal target). Showing there is an agenda working that goes beyond simple solvency.
Rdan–Read Ms. S’s plan. Looks good. I’ll bet it sinks like a stone and is never heard from again. NancyO
Nancy appears to be right. Rivlin and Domenici have found a way to force the working class to lend money to the government which will never be paid back.
btw, if adopted, this would mean that all those people who said the 1983 payroll tax increase was “stolen” to give tax breaks to the rich will have been right.
2090, the 100th anniversary of labor paying for upper income tax cuts.
“btw, if adopted, this would mean that all those people who said the 1983 payroll tax increase was “stolen” to give tax breaks to the rich will have been right.”
Using the Bowles-Simpson plan for comparison is a surrender to the anti-SS agenda, but here goes. Both B/S and Rivlin DoMenici perpetuate the looting of Social Security, but R/D offers a sugar coating. FICA is increased for the well-off, and benefits are increased (or cut less, anyhow) for the least well-off.
The thing to keep in mind is that the sugar coating can be kept even if we toss out the overfunding of the Trust Fund. Drag funding back to 100%, and the benefits to less well-off workers would be increased, while the rest of the deficit-reducing exercise could be put on a more honest footing, revenues matched to outlays without a cushion created out of low-end wages.
“Without a cushion created out of low-end wages.” Why does that make me so mad? You’d think I’d get it by now. Yet I persist in thinking SS has nothing to do with deficits. And, worse, if they get their cuts in on the program, it’s just the start. The silence fromt WH is chilling. Speaking of which, I’m gonna to get some coffee. OooogaBoooga. Too early for this crap. NancyO
i can’t say i understand what you are saying here
but there is no need to do anything about social security beyond letting the workers continue to pay for their own reasonable retirement insurance. the cost of their longer life expectancy amounts to pennies per week per year, which they can afford, and it avoids all the ugly consequences of all the other proposed changes.
cutting benefits for the “rich” simply turns SS into welfare, which FDR was smart enough not to do.
if conditionis warrant in the future a rejiggering of the payout formula might make sense. but to change that formula now on the basis of what we think will happen in 30 or 50 or 75 years or over the infinite horizon is insanity.
And, now for something along the same lines by a person who is quite open about the inherent institutionalization of inequality implied by both Simpson-Bowles and the Rivlin plans. http://economix.blogs.nytimes.com/2010/11/17/fixing-the-budget-and-deciding-on-inequality/ I haven’t googled the author of this article yet. Will directly. NancyO
Ok, here’s the link to the wiki bio for Simon Johnson. Note former connection to the Peterson Foundation. http://en.wikipedia.org/wiki/Simon_Johnson_(economist)
The White House, both the R/B and B/S plans, the majority in the House in the next Congress and a good many members of the majority in the Senate have in mind that Social Security needs changing. Insanity is to pretend otherwise.Your insistance that people here see the world in your way is pretty close to insisting that they drop out of the conversation where decisions will actually be made.
I understand locking in on a particular policy agenda and not giving ground. What you have done is to lock in on a rhetorical stance in service of your agenda, and insist that everybody else adopt that rhetorical stance as well. To that, I have two responses. One is , you ain’t that smart. A rhetorical stance is a tool, not reality, so its virtue is the service it does for the policy agenda. Until you can convince me that repeating after coberly is the way to get the job done, I will discuss Social Security in any way I please. The other response is that I will discuss Social Security in any way I please, period. Go campaign for your talking points to somebody else. We’re trying to have a disucssion here.
Whether Social Security’s holding of Treasury assets represents pillage by the GOP on behalf of the tax-avoiding rich or an investment in the safest securities in the world depends entirely on politics. A number of Republican politicians have said that they don’t ever want to pay back the Social Security Trust – though most have not said so in so many words. Things like “voters won’t stand for the kind of taxes needed to …” blah, blah, blah. The push lump Social Security in with Medicare, to say that it is in “crisis”, to fund it at 500% of what is required – all of that is a way to shift inflow to and outflows from Social Security in such a way as to benefit the general fund – which is to say, high-end tax payers.
Now, back to the coberly view. If one thinks that this argument will be settled on its merits, then allowing coberly to dictate the rhetorical stance of the good guys might not be fatal. If one thinks that the argument will be settled on any other basis, then my view is that the coberly rhetorical rule will fail.
Either way, the coberly rule requires that we forego thought and discussion for the received wisdom of the church of coberly. Personally, I don’t do faith-based wisdom
first, i am that smart. second, i have the right answer. it’s not rhetoric, it’s numbers.
you may discuss Social Security any way you please if you enjoy being wrong, but you shoule expect that i will continue to correct your errors for the benefit of the children.
if you had a real brain, we could discuss the arithmetic. if you want to discuss “politics” it might helpto begin with the right answer to a very serious problem that will affect the lives of the vast majority of americans.
To illustrate my concern better, the link above gets to the cost of proposed SS cuts in terms of savings/etc. needed to make up for shortfall. NancyO
Fellas, stop quibbling over minutia. The details of any plan to “save” Social Security are not impotant. Ony the acquiecnece to the “need” to save Social Security is what the killers of Social Security are looking to establish. It has been demonstrated repeatedly on this site and many other places by well informed experts that there is no real need to save Social Security because it isn’t even injured. The detail that most stands out is that even the dire predictions are focused 25 year in the future. Fixing something that wonlt need to be fixed for 15 years or so is the proof of the scam. So stop quibbling over insignificant details because your real foe could care less about alternative plans.
We are faced with the problem of having elected a President that has reneged on his campaign identity. Obama is no agent of change for the better. He has accomplished a Republican agenda, if he’s accomplished anything to date. We are stuck with a Democrat in the White House who will compromise and conciliate on any and all issues. He’s not even arguing from a left of center position. He has shown us his DLC membership card repeatedly. Now any one who hopes to save Social Security from its self appointed saviors had better get on the phone or write a letter, brief and to the point.
Sir or Madam, I will not vote for you if you join the attempt to revise Social Security in any manner. Stand up for the sanctity of the last retirement system for the middle class worker that has not yet been looted by the financial industry. It isn’t broken. It doesn’t need fixing. I won’t vote for you if you don’t support this simple issue.
i essentially agree. but a couple of points
I am not quibbling. I have demonstrated that Social Security does not need “fixing” in the sense that the deficit commission claims. I have put a number to the Social Security projected deficit… which has nothing to do with the real budget deficit. I do not believe that saying “nothing” without facts and demonstration to back it up will convince very many people except those who “want to believe.”
kharris on the other hand just has these fits from time to time of yelling at me out of the depths of his non faith based wisdom.
Social Security and its viability is something on the minds of many many workers today. One would think that being in the IT industry and a Sarasota web developer that saving for retirement wouldn’t be such a big deal. But with rising prices on everything and pay increases stagnant, it is harder than you think. Therefore, I hope the social security is around when I’m ready to retire.
As long as FICA is being collected Social Security can pay out SOME level of benefits. As it happens under current projections that benefit will always be better in real terms than retirees get today even if we do nothing and get a 22% reset in those benefits come 2037. And there are fairly painless ways to avoid that cut that don’t even need to kick in for fifteen years or so.