Everyone who followed the debate about privatizing Social Security back in 2005 has vivid memories of the Chilean model. Sometimes it seemed impossible to get through any discussion of fixing Social Security without hearing a free-market paean to the way Chile had given its workers control over their own retirement investments, followed by a demand that the United States get on the same boat.
Therefore, it seems worthwhile to note that the Chileans are now bailing water.
The Chilean government recently announced that in 2007 it plans to pursue far-reaching reforms aimed at creating a larger government role in Chileans’ old-age security. The reforms are urgently needed. It has been nearly a generation since the regime of Gen. Augusto Pinochet began to supplant Chile’s government-supported retirement system with a plan for Chilean workers to save 10 percent of their salaries in private accounts. Today, roughly half of Chile’s labor force has either not participated or has not accumulated enough to generate what the government considers a minimum payout of about $140 a month.
The overarching problem for Chile — and the real lesson for the United States — is that private savings are not a substitute for a guaranteed core tier of old-age support. The first measure of success of a retirement system is not how much certain individuals manage to sock away, but whether the system as a whole provides basic dignity for all. By that measure, Chile’s privatized system has failed and Social Security has succeeded.
Social Security does need some changes to protect it over the long term. The best solution would involve a combination of modest benefit cuts and modest tax increases, which could be phased in gradually over decades and could guarantee a government benefit that replaces about 30 percent of preretirement income on average, compared with a replacement rate of about 35 percent today.
Getting there would require sacrifices from both political parties. Republicans would have to give up on their privatization efforts. And the Democrats would have to control their knee-jerk tendency to preface any discussion of Social Security with a pledge never to cut anyone’s future retirement benefits. President Bush will also have to go further if there is to be any chance of progress while he is still in office. Tax increases must be a part of any plausible Social Security reform mix. Unfortunately, the president appears unalterably opposed even to something as overdue as raising the cap on earnings that are subject to Social Security tax.
Jan 2, 2007
NY Times On Social Security Reform
Upcoming Meetings and CLE
- February 2, 2007, State Bar of Michigan Social Security Section Meeting, Lansing, MI
- February 13, 2007, Social Security Advisory Board Meeting, Washington, D.C.
- March 1-3, 2007, NADE Mid-Year Board Meeting, Washington, DC
- March 9, 2007 Ohio Academy of Trial Lawyers CLE, Columbus, OH
- March 25-28, 2007, NADR Conference, Albuquerque, NM
- April 18-20 2007, NADE Regional Training Conference, Albuquerque, NM
- April 18-21 2007, NOSSCR CLE, Baltimore, MD
- April 27, 2007, Cincinnati Bar Association Social Security Committee CLE, Cincinnati, OH
- May 2-4, 2007, NADE Regional Training Conference, Seattle, WA
- May 7-10 2007, NADE Regional Training Conference, Atlanta, GA
- May 18, 2007, State Bar of Michigan Social Security Section Meeting, Lansing, MI
- May 20-23, 2007, National Association of Disability Examiners Meeting, Stowe, VE
- September 15-20, 2007, NADE National Conference, Sioux Falls, SD
- October 17-20, 2007, NOSSCR CLE, St. Louis, MO
- April 8-11, 2008 NADE Regional Conference, Austin, TX
- June 4-7, 2008 NOSSCR CLE, Miami, FL
- October 15-18, 2008 NOSSCR CLE, Century City, CA
Jan 1, 2007
Dec 31, 2006
Does This Make Sense?
The Social Security Administration (SSA) intends to modify its contract with Abt Associates, Inc. (contract #SS00-04-60110), $1 for $2 Benefit Offset Demonstration in accordance with FAR 6.302-1, to include the contractor?s work to facilitate a conference of expert consultants from the Four State Benefit Offset Pilot programs that will serve to complement pre-implementation tasks under the contract. BACKGROUND: On September 30, 2004 SSA awarded a 2-year contract to Abt Associates for design of a multi-site, demonstration project that tests alternate methods of treating work activity in the Title II disability program. After the design is completed, subsequent phases of this demonstration will be awarded to the same contractor on a sole source basis for the implementation, data collection and evaluation and management of the project, conditional upon successful performance of the design phase. REQUIREMENTS: Abt will be responsible for arranging all necessary activities related to planning and facilitating the aforementioned conference. Interested sources that believe they have the capability to perform the services required should submit a capability statement to Daniel Walker via email at daniel.walker@ssa.gov. Responses shall be marked CONF - CAPABILITY STATEMENT, and shall be received no later than January 12, 2007, 2:30PM EST. All responsible sources will be considered. If no responses are received by the cutoff date, a modification will be effected against the Abt contract referenced above. All questions must be submitted in writing to Daniel Walker via the email address listed above. Telephone calls will NOT be accepted.
Dec 30, 2006
Retirement Of Social Security Employee Illustrates Social Security's Problems
EASTON | Ray J. Little had job offers from two federal agencies after passing the civil service examination.
He initially planned to work for the Internal Revenue Service, but a friend steered him to his second choice -- Social Security.
At the IRS, the friend told Little, his job involved trying to collect money from people.
"That's no fun," the friend told Little. "With Social Security, you have people coming in, and you're trying to give them money, and it's a lot easier."
So Little took a position with the Social Security Administration -- in 1960.
The Palmer Township resident will retire today after 46 years. He spent much of that time working out of Easton, acting as the unofficial face in this area of the agency that is charged with disbursing benefits to millions of Americans, including thousands in Northampton, Warren and Hunterdon counties.
Little's job -- public affairs representative or field specialist -- included duties such as speaking before area groups and generally getting the word out about Social Security programs.
Grateful representatives of area agencies say Little went beyond the call of duty.
"We share many clients, so he's been helpful," said Elsie Luciano, executive director of Easton Area Neighborhood Centers Inc.
"He did so much and helped so many people that we know of in our chamber," added Bill Brackbill, former president of the Nazareth Area Chamber of Commerce.
The chamber recognized Little in May 2005 when the agency opened its Downtown Easton office at 134 S. Fourth St.
Little's job essentially will be eliminated, according to John J. McCann, the Easton office's district manager, who hopes to provide fill-in speakers either through his office or through regional public affairs officials.
The retiring Little believes face-to-face contact helps beneficiaries, but it's something he said Social Security is doing less of in recent years, with the agency providing a toll-free telephone number and Internet access.
Little said he has helped some people receive benefits earlier than they realized. Some widows still send him Christmas cards every year, he said, after they learned from him years earlier about being able to apply for benefits sooner than they had thought.
"You can't file for Social Security until you're 62," said Little, repeating an oft-cited government phrase. "But a widow can file as early as age 60."
"He does a tremendous job developing relationships with people," said Brackbill of Little. "You call Ray and you might get his answering machine, but you get an answer back He's always quick to respond."
For now, Little said he has no definite retirement plans. He intends to take a few months to relax then explore possible part-time offers from area agencies to become a resource for Social Security.
He'll also be able to fine tune his monthly benefit check, though Little added a surprising twist: Part of the reason he took retirement now is that he would lose money by working full-time.
It's in part because of cuts approved by the government in recent years involving government workers who held other positions for which they could collect Social Security, and to help ensure Social Security's solvency.
"Really, I'm going to miss it, because I enjoy it," said Little, who participated in some lighthearted banter with McCann while the two looked at old photographs and articles about Little's early career.
"I enjoy dealing with people. That's why of all the jobs I've had the best job as far as I'm concerned is the job I have now."
McCann, who has been Little's boss since 1999, said Little worked hard at chasing down fraud referrals and deciphering the Medicare Part D prescription drug program, which has been in effect more than one year.
"He also brought a lot of humor in the office," added McCann.
The impeccably dressed Little, who on this day sported a Social Security button on his jacket lapel, indeed was always quick with a quip.
"You wouldn't dare put my age in," he said when the question arose. "Just put down there good looking, intelligent and humble."
Dec 29, 2006
Gerald Ford On Social Security
WHILE the press is here, I think it might be appropriate to point out to them the reason for this meeting.
As everybody knows, I submitted to the Congress a very constructive proposal for the purpose of maintaining the financial integrity of the social security trust fund. This was submitted at the time of our budget or economic program, at the time of the State of the Union and, unfortunately, it appears that the Congress is going to fail to recognize the problem and tragically fail to do anything to solve the problem.
This concerns me very greatly, because we have 39 million individuals, most of them older, who are depending upon the financial soundness of the trust fund. And we leave literally millions and millions more who are paying into the trust fund, who are counting on the financial integrity of that fund.
This administration feels an obligation to protect the investment of those who are retired and those who are counting on retirement. The purpose of this meeting is for me to get the up-to-date information from the responsible people in the executive branch who, I'm sure, are likewise concerned, as I am, about the current situation.
The Congress cannot fail the older people and others who are either on retirement or about to retire. We expect some action. They cannot fail to respond to this very important and, I think, critical need.
Simple arithmetic indicates that the social security trust fund is headed for trouble. Unless the Congress acts to ensure that the fund takes in as much as it pays out, there will not be adequate security for old or young.
In my State of the Union Message in January, I proposed a payroll tax increase of .3 percent each for employees and employers, to increase revenues into the trust fund to ensure that benefits will be available to all who have earned them.
My proposed increase would cost workers, with a maximum taxable income, less than a dollar a week. This increase will help stabilize trust funds so that current and future recipients can be assured the benefits that they have earned. I urge the Congress to take the earliest possible action on my proposal to preserve the integrity of the social security trust fund.