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Location: Ames, Iowa, United States

Wednesday, February 16, 2005

Social Security Reform, Bush Relenting?

I have been watching the debate over reforming of our nation's Social Security system. Until now, the idea of allowing people to create their own savings accounts within the Social Security system has not set well with many people. The idea is even being attacked by some Republicans.
I feel that the idea is long overdue, but the timing is unfortunate. If this plan had been implemented 20 years ago, it would have gone fairly smoothly. But now the incoming money provided by the FICA tax is only barely paying the outgoing funds. That being the case, if the private style accounts are started, the money would have to come out of the general tax fund. President Bush has been reluctant to consider the really obvious answer to the Social Security problem. The fact that there is a cap on income which can be taxed to go into the syatem has created the looming shortfall. In my mind, there should be NO CAP. The president has been favoring the rich just enough that it has given the Dems ammunition in their arguments about taxes and the budget. My proposal is this: Remove the cap on FICA taxes. Don't raise the percentage, or even reduce it slightly since leaving an open top end will provide plenty of funds and reducing the rate will help the middle and lower class wage earners. IN ADDITION: Allow the rich to collect the same social security payments as everyone else. That way they are not being discriminated against.
So now, finally Mr. Bush has relented. He suddenly has said that he would consider raising the income cap for FICA taxes. It is great news to me, and I hope the Dems. Again, I feel there should be NO CAP. Here is a quote from the recent article on AP news (my way):

"If Congress did nothing but lift the cap entirely and therefore subjected all wages to the tax, Social Security would be financially balanced for 75 years, though the system would again face trouble after that, according to one economic analysis."

Well let's consider: 75 years? That tells me that if both things happen (lifting the cap and implementing the personal accounts) the Social Security problem would be solved.
The president has opened the door a little, now let's keep our foot in it.

I'll be back



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