Wednesday, April 06, 2005

Private Accounts & CPI Indexing of Beneifts will Eliminate Social Security

A new nonpartisan analysis (pdf file) of the President’s Social Security proposals show that it means guaranteed benefits will be phased completely out.

The nonpartisan Congressional Research Service (CRS) has found that President Bush’s proposals for Social Security would mean the end of Social Security’s guaranteed benefit. The Bush proposal’s benefit cuts start small. However, they eventually become so large that they reduce the guaranteed Social Security benefit to zero. At that point, individuals would have to rely solely on their private accounts.

The CRS analysis looked at the combined effects of the President’s private accounts proposal – as described in White House February 2005 statements – and the White House-advocated shift to price-indexing of Social Security benefits, as proposed by President Bush’s Social Security commission in a plan the President has described as a “good blueprint.”

The analysis confirms that private accounts are not a modest change to Social Security but eventually eliminate Social Security’s guaranteed benefit altogether. CRS found that a person born next year who has average earnings of about $56,000 over his or her career will not receive any guaranteed Social Security benefit at retirement.

[Underlining is mine -- RB]

So it is totally fair to call the President's Social Security proposals an effort to phase out Social Security Benefits. That is exactly the result they expect.


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