The Badger Herald

NEWS

Majority supports changes

Looking for a print version?
Simply choose ‘Print’ on your computer and a printer-friendly document will be generated.

Also by Rachel Patzer:

AG replies to birth control bill (April 7, 2005)
State to sue EPA over mercury issue (April 12, 2005)
Prison sex change law passes Senate (April 13, 2005)
Lab mistakenly ships deadly flu worldwide (April 14, 2005)
Stem cells could treat ALS (April 20, 2005)

by Rachel Patzer

Friday, February 4, 2005

Most Wisconsin citizens agree changes must be made to Social Security, according to the results of the latest Badger Poll.

But many Wisconsinites disagree with President Bush’s new proposal to give individuals some control over their investments with the use of voluntary personal accounts.

A total of 64 percent surveyed in the Feb. 2 Badger Poll believe major changes are needed.

Future generations of children and grandchildren cannot rely on Social Security, say 77 percent of those surveyed.

The Badger Poll, which is sponsored by the Capital Times and the Milwaukee Journal Sentinel, illustrate clear party lines along the issue.

Eighty-five percent of Republicans support Bush’s plan of privatization, while 71 percent of Democrats and 61 percent of Independents oppose it.

The President outlined his Social Security privatization plan Wednesday night in the first State of the Union Address for his second term in office.

Bush proposed the use of voluntary personal accounts to give younger workers the option of receiving greater benefits than what the current system can provide. Privatization would be optional for each worker, and anyone choosing to stay with the current program would still receive his or her promised benefits, according to Bush.

Retired individuals, or those who will soon retire, would not be affected by the proposed plan.

Oconomowoc resident Laura Labus, a Democrat surveyed in the poll, was not impressed with Bush’s speech on Wednesday.

Labus is worried Social Security will not be available in 20 years when she plans on retiring. As for Bush’s plan, Labus said private funds are a “fine idea,” but she is concerned individuals uneducated in finance will be at a disadvantage because they will not know how to invest their funds.

Legislators across the state of Wisconsin are also divided among party lines. Many Democrats believe there is no problem with the current Social Security program.

“Let’s get one thing straight … nonpartisan sources confirm there is no crisis with Social Security,” Congresswoman Tammy Baldwin, D-Wisc., said in a press release.

Bush’s proposed plan would raise the deficit to an estimated $2 trillion, Baldwin said in an e-mail.

“If current workers are allowed to divert money out of the Social Security contract and into private accounts, there will not be enough revenue to pay benefits to current beneficiaries,” Baldwin said. “Without raising taxes, the government would be forced to borrow that money. “

Republicans, on the other hand, believe the Social Security program is heading for disaster.

Congressman Paul Ryan, R-Wisc., was impressed with the President’s State of the Union Address, and was especially glad Bush spoke of the importance of Social Security reform.

“Anyone taking an honest look at Social Security’s finances can see that the current system is heading toward bankruptcy, and this will only get worse as the baby boomers retire,” Ryan said in a press release.

According to Ryan, voluntary private accounts are key in savings for future retirees.

If Bush’s plan is approved in Congress, young workers could play a role in determining where their funds were located.

UW senior Abby Averill said she would appreciate having control over her own money.

“They can privatize it all they want, I just want my money back,” Averill said.

Feedback

Show all comments

Hide anonymous comments

Anonymous (February 4, 2005 @ 9:06am):

Hi! I'm Big Baby Bushie! I want to fuck your grandchildren out of their hardearned money by diverting it to my Wall Street crony friends! I'm a liar and an idiot! Privatization Good! Governemnt program bad! Me dumb (and I still drink!..ha!)

Anonymous (February 4, 2005 @ 11:04am):

"she is concerned individuals uneducated in finance will be at a disadvantage because they will not know how to invest their funds."

Clearly. Because the uneducated ones want to keep SS the way it is and continue pissing their money away, while the rest of us with a brain have to suffer for it.

So all federal employees have a similiar personal fund (they dont pay into or draw from SS), but they arent screaming to get back into the SS system, I wonder why?

Have you ever heard anyone (even current retireies) saying how great their measly SS check is? How its such a great deal?

Any idiot (as evidenced by the fed employee retirement plan) can have their money invested in a few limited choices of funds and make more money than SS. Thats the truth. If you think this is all some plan to enrich Wall Street brokers, then dont ever open an IRA or save any other money for your retirement outside of putting it under your matteress, and let me know how that works out for you.

Read an basic economics book and get your head out of your ass.

Anonymous (February 4, 2005 @ 2:18pm):

Social Security is not designed to make your rich after retirement. It is supposed to keep the elderly from falling into poverty. It is a social safety net. That's why it is called social SECURITY not the "Get rich investment Fund".

The privatization fo social security will result in the following losses:
1)no matching contribution. Currently employers have to match employees' contributions
2)There will be no safety net for the elderly. The uneducated elderly are those who need this net most. For those of you who think that the SS check is "mealy" I encourage you to take a field trip to Appalachia and find the thousands of elderly that live month to month off this check.
3) There will be massive potential for corruption. Who decideds what funds will eb the options?
4) Management fees are as high as 20 basis points on many funds. When combinde with the amount that you will lose from taxes when you pull the money out, your net will be under what you get now.
5) There will be a huge gap(estimated at as much as 3 trillion) when this switch over is made. Where will this money come from when we are already in debt.

A more reasonable solution is to raise the cap. Currently only the first $90,000 of income is FICA taxed. raising this cap to even 140k would fix social security. Personally I also think that those in retirement making more than 100k a year should not be given social security. It is meant as a safety net not a supplement to your pension. This change alone would all but fix the system.

Please remember that the UK has already tried this system of privatizing social security and are now trying to change back to our system. People in Britain think that AMericans are insane when they hear that they want to make this change. Don't beleive me? read this article: http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=8997

Anonymous (February 4, 2005 @ 4:10pm):

I just wanted to point out that this is another classic Herald headline. "Majority Supports Changes." Really? There should be a mandatory two-day session on headline choosing that all the idiot journalists at this school take.

Anonymous (February 4, 2005 @ 6:10pm):

To Anon who claims no employee matching, no safety net, etc... you make it quite obvious that you are one of the many on the left who have paid no attention whatsoever to the plan. You are listening (and parroting) the trash spewed by the Democrats to scare their constituents. Just to set the record straight.

1) First off, no one has to get into the system, they can choose to contribute just as they do now and receive the same lousy benefit they get now.

2) Up to 4% of wages could be put into the account, of the total of 6.2% (4% to YOU, 2.2% to Uncle Sam). The company matching (if you are on a payroll) will BE THE SAME! In other words (I will keep this simple for you), for every $10.00 you earn, $0.40 goes to your account, 0.22 goes to the general SS acct, and your employer contributes 0.62 to the general SS acct.

3) The "safety net" as you call it will be unchanged. The benefit will be unchanged. Sure, if your account can produce more than your SS benefit, the SS will be reduced. Just a thought, with the return on SS about 1-2%, any moron can throw cash into a 6 month CD and get a better return, this is a no brainer.

4) While I have not seen this (I admit), there will have to be government controls on those eligible to handle the finances and the investment options available. Those controls will consist of max fees and the like. Also, it will be taxed just as your SS benefits are taxed now... the only difference is, you will have MORE MONEY and it is yours to do with as you please (even leave a little for your family when you die).

5) So what you are telling us is there will be corruption when people take control of their retirement as opposed to now? At this time, all (most) gov't employees as we as employees in the private sector have access to retirement programs... I have not heard of widespread corruption in those programs, why would this be any different?

6) The only difference is now, members of Congress steal from it on a daily basis and no one says a thing. Since its inception, the SS administration has taken in more than it has paid out nearly every year. A big benefit to an individually owned account is the government can't spend it!! It will always be there.

I wish I had more time, however, some of have to work to pay into SS. I would just like to set the record straight, at inception, SS was not intended to be a retirement income, it was intended to supplement retirement income. It was none other than LBJ who changed the purpose of social security so it became an entitlement. Perhaps you should educate yourself a little before you spout off.

Anonymous (February 4, 2005 @ 7:10pm):

Yeah, there should be... since you don't know the basic of headlines yourself. Read the physical paper. The reason the headline is so sparse is because it was a three-line, one-column headline. Meaning there is room for about 1 word per line. Majority. Supports. Changes.

Before you open your fat mouth, open your small mind. Dumbass.

Anonymous (February 5, 2005 @ 12:22am):

Anyone who beleives that the government is going to let you gamble with your money and then still pay you the same SS benefit after you lose money in the market is insane.

Anonymous (February 5, 2005 @ 5:59am):

"A more reasonable solution is to raise the cap."

SS already provides benefits skewed toward lower contributors - this would make that even worse.

Ryan (February 6, 2005 @ 2:52am):

The fact of the matter is that educated people familiar with Social Security policy realize that major change is needed. There is no reason that people should settle for the 2% ave. rate of return per year that the SS trust fund gets. Chile is a shining example of a privatized system. Privately invested funds will net 8%+ annually. Allowing 4% of my SS taxes to be invested by me will prove extremely beneficial because then my SS account will grow much more quickly. It's MY MONEY anyway, so why should the gov. force me to invest it in the SS trust fund at a worse rate of return that I can get in my PRA and then give me the money back when I retire in the form of gov. handouts? That's asinine!

Anonymous (February 6, 2005 @ 11:01pm):

An economics professor I had the day after the State of the Union address had the following to say: Privatization of SS will not "fix" the system. It is an option well worth looking into in order to increase the efficiency of the system, but will not help the SS system from going bankrupt. The only things (in his words) that we can do to fix the SS system are (1) raise taxes, (2) raise the retirement age, or (3) decrease benefits. These are three things that will fix SS and extend its life indefinately. The only thing for sure about privatization is that somebody will end up making lots of money...