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March 2, 2005
Rep. Paul Ryan on Social Security
In my opinion one of the best Social Security reform bills on the floor of Congress was put forth by Rep. Paul Ryan of Wisconsin. His bill front loads the contributions to private accounts, which ensures that low-income workers can set aside a substantial amount for retirement even if they make less than $10,000 a year. Specifically:
Workers will be able to shift to their personal accounts 10 percentage points of the current 12.4% Social Security payroll tax on the first $10,000 of wages each year, and 5 percentage points on all taxable wages above that. This creates a progressive structure with an average account contribution among all workers of 6.4 percentage points.
His bill has been scored by the Office of the Actuary of the Social Security Administration, which concluded that the legislation by 2047 would completely eliminate the current $10.4 trillion of unfunded liabilities within the current system. Sounds like a good plan to me. You would think with the progressive aspects of the plan some Democrats in Congress would be jumping aboard... but not so.
At a recent Cato conference, Ryan pointed out it's not his plan that those on the other side of the isle are opposing, there are other factors involved:
"'I have been floating it to Democrats,' said Ryan. 'Each of them replied to me, "I like what you're doing, I like this bill, I think it's the right way to go, but my party leadership will break my back. The retribution they are promising against us is as great as I've ever seen, and I can't do it."'
It's a good idea, but... I've got my next election to think about. Aren't politics great?
Posted by Peter Mork at March 2, 2005 9:51 PM
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