Burlington High School
Burlington,
Kansas
Teacher: Mrs. Devra Parker
Social Security: Reformed or
Not?
Heidi
Hinterweger
12th grade
What is social security? Social security is a government program that provides economic assistance to persons faced with unemployment, disability, or agedness and is financed by assessment of employers and employees. What is reform? Reform is to make an idea better by removing the faults. Who has the most power when it comes to social security? George Bush has the most power. President George Bush’s proposal to reform social security has the most influence.
George Bush’s proposed reform to Social Security has three main principles embedded in it. He wants social security to be changed soon because he knows we need to fix it, and he wants no increase in payroll taxes. Bush believes it needs to be a better deal for the younger workers, and this will be accomplished by allowing them to put part of their payroll taxes in personal retirement accounts. If they start early enough, then it will save them a lot of heartache. This will allow social security to be strengthened so it exists to help out the future generations. Also, the current problems with social security could cause businesses to experience increased taxes if changes are not made. Bush’s proposal is that there will be no increase in payroll taxes because it would put a heavy burden on everyone working and harm our economic strength.
Another aspect of Bush’s proposal is that the personal retirement accounts would be entirely voluntary. The money would go into a conservative mix of bond and stock funds that would have the opportunity to earn a higher rate of return than anything the current system could provide. A young person who earns an average of $35,000 a year over his or her career would have nearly a quarter of a million dollars saved in his or her own account upon retirement. That savings would provide a nest egg to supplement that worker’s traditional Social Security check, or to pass on to his or her children. Best of all, it would replace the empty promises of the current system with real assets of ownership. The current system is what is called a pay-as-you-go system. That means the worker pays through payroll taxes, and the government spends the money. The money is spent on retirement benefits, but that is not all the Congress has been spending the payroll tax on. When this happens all that is left in the Social Security trust fund is a file cabinet full of IOUs.
There is an opposition position that is against George Bush’s proposal. Jacob Weisberg thinks that Bush’s plan for reforming Social Security is not going to be passed. He does not think it is going to be passed because some of the Democrats in Congress are not going to vote for it. Additionally, several Republican senators in Congress whose votes would be needed for passage are resisting the private accounts as well. Weisberg thinks this plan will cause people to become upset with George Bush. Then, they would revolt against working for him or for the government.
Besides that, there are other reasons for people apposing this proposal. Another reason is some people are treating Social Security like it is government program. In reality, it is not just a government program. It is a program to help elderly people who do not have enough money to live on without having to go back to work. In turn, the retirees with Social Security can be able to enjoy live and spend it with the family. So, those retirees do not have to worry about their Social Security money not getting to them in time to pay for bills.
I am for George Bush’s proposed reform for social security. I am for his plan because he has new ideas that we have not tried before that could make it a better program for everyone including the current retirees and citizens that are not at the retirement age yet. He believes that everyone should be able to receive some Social Security benefit. When the retirees receive the benefit, they will able to live more enjoyable retirements because of the benefit. Bush also wants the retired people to be rewarded for the work they did when they were younger. So, they do not feel like they did all that working for nothing.
Social security is the most important way an elder person or a person that doesn’t have a job can get money. I am for George Bush’s plan proposal to reform the social security. He wants to be able to help people that are getting social security. If society as a whole does not have a social security plan at all, where will we be?
dictionary.reference.com
http://www.strengtheningsocailsecurity.gov/
http://slate.msn.com/id/211514/
http://www.issues2000.org/Celeb/George_W__Bush_Social_Security.htm
Answers To Questions Prompted By The Required Reading
Q1- Explain why some people:
a) claim that there are no social security trust funds
Someone people claim this because they believe the government is spending all the taxes that are collected and none are set aside in a trust fund.
b) claim that politicians have spent the trust fund money to run the government
Someone people claim that politicians spent the money to run the government because the trust fund is being drained faster than the government collects the taxes.
c) claim that the trust fund money is invested
Some people claim that the trust money is invested because they believe the government has set up a trust fund and invested the money.
Which of the above do you agree with and why?
I agree with the claim that the trust fund money is invested. I believe it is invested because I understand the government buys and sells bonds to finance government programs. The money the government gets from the bonds is used for military purposes. So, when the government buys on credit the national debt rises and it will take us longer to pay it back.
Q2- When U.S. Treasury Bonds are sold where does the money go and what is it used for?
U.S.
Treasury Bonds are sold when the money in the Social Security Tax receipts
exceeds the amount of the benefit payment. They are sold all the time for money
and then the money is lent to Congress. They borrow it to fund defense purposes
and other government related situations.
Q3- Why do you think that social security is the only source of retirement income for 22% of those over age 65? How would you change that? Please comment if you know an elderly person who is totally dependent on a monthly social security check.
I think social security is the only source of retirement income for 22% of those over age 65 because many individuals in this age bracket didn’t have enough income during their working years to save for retirement. Another reason is because they believed Social Security would pay all their bills. So, they didn’t save for retirement.
Q4- What is the average life expectancy of an American over age 65 today?
The
average life expectancy of an American over age 65 today is 83.
Q5- What is the average social security benefit in your state? Is it more or less than the average benefit of the state with the largest population in the United States?
The average social security benefit in Kansas is $944 a month for a retired worker. In California, the largest state, they receive $926 for a month. So, in Kansas a person would receive a larger retirement benefit.
Q6- In 2003 what was the amount of social security income derived from interest earnings? How much from payroll taxes?
The amount of social security income derived from interest earnings in 2003 was $85 billion. The amount of the social security income derived from payroll taxes in 2003 is 85% of the interest earnings or close to $547 billion dollars.
Q7- Who can get full retirement benefits even though they continue to earn income after attaining full retirement age and who cannot? In 2004 what was considered “full retirement age”?
Individuals who have reached full retirement age can receive full benefits with no reduction for earnings. They individuals who haven’t reached that age can’t receive full retirement benefits. The considered age for full retirement is 65 years and four months.
Q8- Give two examples of “special payments”.
Special payments are after a person retires they can receive payments for work
his or her did before you started getting Social Security benefits. Two
examples of when special payments are given to the person are bonuses, and
accumulated vacation or sick pay.
Q9- What benefits does social security provide to people who have not yet reached retirement age?
The
benefits that social security provides to people who have not yet reached the
retirement age are survivor and disability.
Q10- How long does it take a worker under age 24 to be qualified to receive social security benefits?
For a worker under 24 years of age, to qualify to receive social security benefits is at least 10 years.
Q11- Do you think the social security system needs to be reformed now? Support your answer with facts.
I don’t think the social security system needs to be reformed. It doesn’t need to be reformed because people can easily get more money from the government. They can get more money by investing their money into U.S. Bonds that the government can issue that they can earn more interest from. Another one is we have benefited from the Social Security Trust Fund. We have benefited from this because the Treasury doesn’t have to borrow more money from the other lenders to finance our budget deficits.
Q12- Suppose you are a young working person. If you could opt out of the social security system and invest the portion of your pay that would otherwise be invested for you, would you choose to do so? Why or why not?
Yes, because I would want to be able to have some of my paycheck going into an account that I could use for my social security when I retire. That would only happen if I opted out of the social security system. Then if it is there I will be able to use it and I might find a better interest rate than what government is giving.
www.soces.org/publications.asp?pubid=540: 1- Very informative- a heavy pro reform bias
www.ssa.gov/pubs/10063.html: 2- Very informative- a slightly anti and pro reform bias
www.heritage.org/Research/SocialSecurity/BG1256.cfm: 2- Very informative- a heavy anti reform bias
www.cato.org/testimony/ct-moore.html: 4- Somewhat informative- heavy anti reform bias
agnews.tamu.edu/dailynews/stories/CFAM/Apr2695a.htm: 3- Somewhat informative- slightly pro reform bias