January 5, 2005
4% SOLUTION:
A plan for Social Security evolves: The Bush administration focuses on investments options for younger workers. A proposal is expected to be unveiled in late February. (LEIGH STROPE, 1/05/05, Associated Press)
The Bush administration is focusing on a Social Security proposal that would allow younger workers to invest nearly two-thirds of their payroll taxes in private accounts, with contributions limited to about $1,000 to $1,300 a year, an administration official said Tuesday.A proposal is expected to be unveiled in late February. But the White House cautioned that President Bush has not decided on a specific plan.
The administration official, who spoke on condition of anonymity, said the size of the private accounts could be similar to a proposal by Sen. Lindsey Graham, R-S.C., and a plan from Bush's 2001 Social Security commission.
Both plans let workers divert 4 percentage points of their 6.2 percentage points in payroll taxes into accounts. The federal 12.4 percent payroll tax is split between workers and employers. Workers' remaining 2.2 percentage points in taxes continue going into the system.
That'd be great as a final law--which is just the start of privatization, after all--but the opening bid should be Sununu-Ryan, which it would be helpful if Tom DeLay hammered through anyway. Posted by Orrin Judd at January 5, 2005 9:42 AM
This seems smart politically. The closer people are to retirement the harder they will fight change/reform. So you tell people 50 and up nothing is changing for them. You focus most of the change on the youngest workers who are the farthest away from retirement and probably (like me) not counting on SS for retirement.
I'd still like to see the payroll tax reduced and less people forced into the SS system but perhaps that will come later as the initial changes are worked through.
Posted by: AWW at January 5, 2005 10:17 AM