Not dead yet

Not Dead Yet

by digby

Now here's a novel idea! How about giving people the "choice" to opt-out of Social Security and put their money in the stock market instead?

House Republicans on Friday introduced legislation that would allow workers to partially opt out of Social Security immediately, and fully opt out after 15 years.

Rep. Pete Sessions (R-NY), who chairs the National Republican Congressional Committee, and several other Republicans introduced the Savings Account for Every American (SAFE) Act. Under the bill, workers would immediately have 6.2 percent of their wages sent to a "SAFE" account each year.

That would take the place of the 6.2 percent the workers now contributed to Social Security.

Another 6.2% is sent to Social Security by employers. Under the Sessions bill, employers would continue to make this matching contribution to Social Security, but after 15 years, employers could also send that amount to the employee's SAFE account.

Sessions said this transition to a private retirement savings option is needed because Social Security last year began paying out more money than it took in.

"Our nation's Social Security Trust Fund is depleting at an alarming rate, and failure to implement immediate reforms endangers the ability of Americans to plan for their retirement with the options and certainty they deserve," Sessions said. "To simply maintain the status quo would weaken American competitiveness by adding more unsustainable debt and insolvent entitlements to our economy when we can least afford it."

Under the bill, employees would be able to make tax free contributions to their SAFE account, and take tax-free distributions at retirement age. The bill would also allow employees to stay with the Social Security program if they wish.

Of course, what this would really do is remove money from the Social Security system right now, thus endangering the system for all older workers who will still be in the system 15 years from now. I'm beginning to wonder if my demographic group is going to be the guinea pig in a Soylent Green experiment. (Sure, they'll eventually figure out that his whole thing is unworkable, but it will be too late for the last half of the baby boom.)

The problem isn't with middle aged or older workers. They are in touch enough with life's vagaries to sense their future vulnerability enough to probably opt in. It's younger workers who believe they are going to live forever and that they are destined to be millionaires anyway who will drain the system. It's not because they are bad people. It's just that at that age you feel immortal.

I think the Democrat would be wise to inform the public of this proposal, however. People need to know. Especially all those who recently lost half their retirement savings in the financial meltdown of 2007.