Wednesday, December 01, 2010

Simpson-Bowles would raise retirement age by 2075, raise wage base, and means test

There was more about Simpson-Bowles tonight on the major networks, with the president’s Debt Commission issuing its final report, which 5 out of 18 commission members can nix. The ABC story by Matthew Jaffe and Arlette Saenz is here.

The plan would increase the Social Security full retirement age to 69 by 2075, probably eliminate most early retirement, increase the wage base covered by the tax, and decrease benefits for wealthier beneficiaries, frankly admitting that Social Security is about wealth redistribution and not savings. Medicare cuts would also occur, hinting that in time families will bear much more responsibility for their elderly, as a legally mandated matter, than they perhaps do now.

Alan Simpson warned that people of future generations may be "sleeping in the streets".

Privately, I've heard predictions that means testing could start in about ten years.

Jagadeesh Gokhale, a Senior Fellow at the Cato Institute, wrote a letter to the Post published today, “Distorting Social Security Privatization Proposals”, link here. The writer notes that there are risks in depending on equity markets (depending on how the investments are regulated), but makes the point that the political risk to retirees in depending on government may be even greater.

No comments: