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February 18, 2005

The Democrats' Social Security (Mis)Calculator

Yesterday, Democratic Senate Minority Leader Harry Reid released a new Social Security calculator that showed how people would mysteriously be worse off if they opted for VOLUNTARY personal accounts. Here is an examination of that calculator (as provided by the Republican National Committee).

FOUR MAIN PROBLEMS WITH THE REID/SCHUMER CALCULATOR: #1. Democrats assume that current Social Security systems can pay promised benefits, but, in fact, benefits would be cut 27 percent by 2042 if nothing is done. (Source) #2. Democrats assume final plan will include price-indexing when price indexing is not in plan president laid out in State Of The Union address. (Source) #3. Democrats do not account for investment gains. (Source) The Washington Post: "Personal Accounts Would Boost Benefits For The Average Retiree" Because Real Rate Of Return Is Expected To Be 4.6 Percent. (Source) #4. Democrats make up "Privatization Tax" - President's plan merely prevents "double-dipping" by allowing workers portion of traditional benefits if they choose PRAs. President Bush's plan "would require those who opt for a personal account to forgo some of their regular benefits. It's simply a trade-off - and it's necessary to prevent double-dipping by both having a personal account and drawing full benefits." (Source)

Posted by Andrew Roth at February 18, 2005 9:02 AM | Print

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