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Home Publications Blogs Social Security Monitor Letter to Sen. Chambliss on Social Security Reform Comments

Letter to Sen. Chambliss on Social Security Reform Comments

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Written by Dean Baker   
Thursday, 01 September 2011 13:10

The Honorable Saxby Chambliss
416 Russell Senate Office Building
Washington DC, 20510

Dear Senator Chambliss,

While discussing Social Security at a recent town hall in Carroll County, Georgia, you told the audience:

“It needs to be reformed so it’ll be there for the next generation.”

In actuality, it will be there for your children and grandchildren. The recommendations of the National Commission on Social Security Reform in 1983 led to the growth of a large surplus in Social Security. This surplus was used to buy bonds, and now Social Security holds more than $2.6 trillion in government bonds. As a result, the Congressional Budget Office’s projections show that the program will maintain full solvency through the year 2038.

Even without any changes whatsoever to the program, Social Security will be able to pay slightly more than 80 percent of scheduled benefits from 2039 on. Put another way, if your children — currently in their 30s — were to retire at the age of 67, even after Social Security faces projected partial shortfalls beginning in 2039, they would still receive benefits of $32,911 and $34,904 (both in 2011 dollars) respectively, every year, for the rest of their lives. Clearly Social Security will be there for them and millions of other Americans.

As a member of the Senate’s Special Committee on Aging, tasked in part with oversight of Social Security, I hope you and your staff will take the opportunity to further review the design and finances of the program. If you would like any additional background on Social Security, I would be happy to assist you.

Comments (4)Add Comment
"Do nothing" implies a 34% reduction in real return.
written by AndrewDover, September 03, 2011 12:45
"Without any changes whatsoever to the program",
a 38 year old single male with medium income will earn a real rate of return of 1.41%. (Payable benefits)

His scheduled benefits would have earned a 2.15% real return.

http://www.socialsecurity.gov/OACT/NOTES/ran5/index.html
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written by San Francisco 49ers #15 Michael Crabtree White Jersey, September 04, 2011 11:35
Security will be there for them
...
written by Michael L. Reynolds, September 10, 2011 4:24
Andrew Dover, higher earners "lose" a little on SS because it isn't an investment; it is an insurance program to protect our society. Additionally, it is mildly progressive returning to lower earners, who don't live as long, a higher replacement rate AND we are still paying for my great aunts and uncles who collected more than they paid in. Did you calculate the cost of supporting your parents if something goes wrong with their bank account? And, there are a lot of boomers with 201ks happy that quaranteed, inflation adjusted, average wage set SS is always there - until some mean-spirited plutocrat like Saxby Chambliss undermines the confidence of the American people. Mike L. Reynolds, Rome, Ga
Return on investment is the right measure for group comparisons
written by AndrewDover, September 10, 2011 6:07
I simply gave the two returns on taxes paid; scheduled and payable, so that people had a quantitive understanding of how much difference there was between the promise and the ability of social security to pay without extra money inserted.

You mentioned higher earners, I did not. Both 2.41% and 1.41% are for medium earners.

I'm sorry that you or someone else did not like the facts, but I don't see any argument that these facts are not true.

Social security is about half way between a individual account in which your benefits are proportional to your taxes paid, and a fixed benefit.
Source: https://www.socialsecurity.gov/policy/docs/issuepapers/ip2009-01.html




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