Obama Continues Focus on Social Security

John McCain will undoubtedly accuse Barack Obama of mischaracterizing McCain's position on social security, but voters are beginning to understand that McCain has taken every side of every issue, including social security, during his lengthy career in Washington. McCain is recently on record endorsing President Bush's failed privatization plan, despite his campaign's assurance that McCain is "100 percent committed to preserving Social Security benefits for seniors." McCain tied himself to Bush when he thought it would help him. If the embarrassing knots are difficult to untie now, McCain has only himself to blame.

As he did in this ad, Obama today described McCain as a reckless gambler ready to bet social security trust fund revenue on private investments. Obama seized the moment to make an argument that should separate McCain from a large segment of voters (elderly and getting there) who foresee disaster if part of the social security system is converted to a voluntary program of private investment.

Obama, speaking to potential voters in Daytona Beach: [more ...]

"If my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week. Millions would've watched as the market tumbled and their nest egg disappeared before their eyes," he said. "I know Sen. McCain is talking about a 'casino culture' on Wall Street, but the fact is, he's the one who wants to gamble with your life savings, and that is not going to happen when I'm president. When I'm president, we're not going to gamble with Social Security."

With an election to win and cognizant of widespread wariness of any reform measure that involves the creation of private investment accounts, McCain is now untethered to any policy. He wants to create a bipartisan commission to find a solution to an anticipated shortfall of payroll tax revenue to pay full social security benefits to all recipients. This sounds equally as effective as his plan to create "a high-level commission to study the current economic crisis."

McCain = more of the same + commissions to make economic policy.

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    Social Security (none / 0) (#1)
    by fred in PA on Sat Sep 20, 2008 at 09:20:46 PM EST
    Social Security as presently constituted is a Ponzi scheme.  There is NO way my children are going to get out of the system anything approaching what they're going to be forced to pay into it.  Both sides have dithered for decades but the demagoguery of the Democrats has been particularly disappointing.  The system is going broke in hurry and a lot of people are going to be hurt in the process.  And no, there's not enough tax money on the planet to pay all of the promises as they now exist.  I have a real problem with a program that pays monthly checks to Warren Buffet just because he's over 65 years of age.

    As long as (5.00 / 1) (#2)
    by elmey on Sat Sep 20, 2008 at 09:42:48 PM EST
    Warren Buffet paid into the system, there's no reason he shouldn't get a check like everyone else.  Social Security works because it is the same for everyone. It is not a transfer of money from the rich to the poor.

    Under the most conservative estimates, the fund is fully solvent until 2042.  At that point, the fund will still be able to pay 70% of all scheduled obligations.  With minor adjustments the fund should be able to meet all its obligations indefinitely.

    Unless your children do something self-destructive like voting for Republicans, they will be collecting Social Security, as will your grandchildren.


    If McCain Wants To Privatize Social Security (none / 0) (#3)
    by john horse on Sat Sep 20, 2008 at 10:57:46 PM EST
    he needs to come clean on how he is going to fund personal accounts.

    There are only three ways that private accounts can be set up.  You either have to drastically cut benefits, increase taxes, or you need to borrow a substantial amount of money to set up the accounts.  The reason for this is because almost all our social security taxes are being used to pay for current benefits.  
    Those who favor McCain/Bush privatization say current benefits won't be cut and taxes won't be increased.  That means that there is only one way that private accounts can be set up.  The government is going to have to borrow about the same amount that people pay in taxes.  

    So how much is the government going to have to borrow?  Those who favor McCain and Bush's privatization plan aren't saying either because they don't know or because they know but don't want you to know.  They want to scare you into destroying a system that has worked.

    According to FactCheck.org ... (none / 0) (#4)
    by Inky on Sat Sep 20, 2008 at 11:28:02 PM EST
    Obama was distorting the truth:

    In Daytona Beach, Obama said that "if my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week." He referred to "elderly women" at risk of poverty, and said families would be scrambling to support "grandmothers and grandfathers."

    That's not true. The plan proposed by President Bush and supported by McCain in 2005 would not have allowed anyone born before 1950 to invest any part of their Social Security taxes in private accounts. All current retirees would be covered by the same benefits they are now.

    Obama would have been correct to say that many workers under age 58 would have had some portion of their Social Security benefits affected by the current market turmoil - if they had chosen to participate. And market drops would be a worry for those who retire in future decades. But current retirees would not have been affected.


    In our "Scaring Seniors" article posted Sept. 19 we took apart a claim in an Obama-Biden ad that McCain somehow supported a 50 percent cut in Social Security benefits, which is simply false. Then, on Saturday Sept. 20, Sen. Barack Obama personally fed senior citizens another whopper, this one a highly distorted claim about the private Social Security accounts that McCain supports.


    So How Does McCain Fund Private Accounts (none / 0) (#6)
    by john horse on Sun Sep 21, 2008 at 07:28:20 PM EST
    According to you.
    The plan proposed by President Bush and supported by McCain in 2005 would not have allowed anyone born before 1950 to invest any part of their Social Security taxes in private accounts. All current retirees would be covered by the same benefits they are now.

    So given that current benefits are funded by current taxes and given that McCain claims that benefits won't be cut, how do you set up private accounts without the government having to borrow to set them up.  How much is the government going to have to borrow?  


    Actually that's not quite right ... (none / 0) (#7)
    by Inky on Sun Sep 21, 2008 at 08:34:07 PM EST
    Let me begin by saying straight out that I am adamantly opposed to private accounts. I should also note that according to the Factcheck.org article McCain has been only a tepid supporter of private accounts in the past.  You also have to realize that under the Bush plan only a certain percentage of a person's contributions are allowed to be invested in private accounts. Moreover, there is something called a Social Security Trust Fund, which is more than just an accounting gimmick even though it often seems that way. I recommend that you read the entire factcheck.org piece, as well as the Wikipedia article on the trust fund, of which I'll quote you just a part.

    The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. In the early 1980s, however, the financial projections of the Social Security Administration indicated near-term revenue from payroll taxes would not be sufficient to fully fund near-term benefits (thus raising the possibility of benefit cuts). The federal government appointed the Greenspan Commission, headed by Alan Greenspan (who had not yet been named Chairman of the Federal Reserve), to investigate what changes to federal law were necessary to shore up the fiscal health of the Social Security program.[4] In addition to recommending tax increases to alleviate the short-term funding problem, the Greenspan Commission projected that the system would be solvent for the entirety of its 75-year forecast period.[4] The changes to federal law enacted in 1983 pursuant to the recommendations of the Greenspan Commission increased the Social Security payroll tax so that revenues derived from the tax would exceed the amounts needed to fully fund current benefits, thus causing a reserve to accumulate, which could be drawn upon when necessary. The resulting surplus is accounted for in the Social Security Trust Fund. As of the end of calendar year 2006, the accumulated surplus stood at just over $2 trillion. ...

    If part of the payroll tax is diverted to fund private accounts, the Social Security Trust Fund would be exhausted before 2042, and the federal government's ability to fund benefit payments after the Trust Fund is exhausted would cause the percentage of fully-funded benefits paid to fall significantly below 74% (the percent of benefits paid would depend on the amount of payroll taxes diverted to private accounts). Social Security could pay full benefits through the forecast period (i.e. through 2080) if any of the following were enacted: an immediate cut to all benefits of 13%; an increase of 16 percent in payroll taxes (i.e. by nearly 2 percentage points, bringing the FICA tax to 14.4% of payroll); or some combination of tax increases and benefit reductions.


    We agree on the basics, which is that private accounts are a bad idea. But that doesn't mean that Obama was being honest with the senior community in Florida. He was enploying scare tactics, which happens often enough in politics.


    According to FactCheck.org (none / 0) (#5)
    by MGJams on Sun Sep 21, 2008 at 04:04:21 PM EST
    Oh you forgot to mention also that McCain has slaughtered the truth more consistantly than Obama. lol
    truth to McSame is that We need to privatize now, before America notices. I like the joke,,,,,,

    McCain buys $4,000.00 dollar shoes,,,,,,
    we buy his flip flops!

    I'll never understand the Conservative mind.
    you tell them to eat cake,,,,
    but they just want the frosting!!!