Hans Testifies on Social Security!
Our very own Hans Riemer, who many you know from his contributions to this blog, testified before the House of Representatives Committee on Financial Services this morning.
The hearing, entitled "Generations Working Together: Financial Literacy and Social Security Reform," highlighted the need for honest discussion about controlling our retirement security. Hans presented our views on social security reform and answered questions.
"As an advocate for our one million members and supporters," Hans testified, "Rock the Vote believes that all Americans can learn how to invest for their own future. At the same time, we also believe that everyone should have a basic safeguard to protect them if they are unsuccessful with their personal investments. That safeguard, which is Social Security, should be sufficient to protect a middle class standard of living while at the same time lifting low income workers out of poverty."
Check out the rest of Hans' testimony here.
The hearing, entitled "Generations Working Together: Financial Literacy and Social Security Reform," highlighted the need for honest discussion about controlling our retirement security. Hans presented our views on social security reform and answered questions.
"As an advocate for our one million members and supporters," Hans testified, "Rock the Vote believes that all Americans can learn how to invest for their own future. At the same time, we also believe that everyone should have a basic safeguard to protect them if they are unsuccessful with their personal investments. That safeguard, which is Social Security, should be sufficient to protect a middle class standard of living while at the same time lifting low income workers out of poverty."
Check out the rest of Hans' testimony here.
posted by RTV Admin at 2:15 PM
33 Comments:
First post!!
En English, you are a weirdo.
Great testimony! Thanks to Hans and RTV for keeping the truth out there.
Good work Hans - testimony was strong. I think its great that you're turning rock the vote into more than just a slogan.
thank you for pointing out the UFO comment by bush - clearly HE sees things the rest of us dont, like a crisis where there isnt one! i voted for bush, but his position on social security is outrageous and i wouldnt vote him dog catcher again. go rock the vote!
It's great to see someone speaking for younger Americans. I hope Rock the Vote takes on more issues for young people. We don't have an advocacy group like AARP because no one thinks we will contribute to support such a group. They are all wrong and I'm glad Rock the Vote is stepping up to the plate.
-JS
Pretty good for an old white guy!
hey - great. people are listening to us! we are a force - dammit.
nice! Way to go - keep on pressuring Capitol Hill - scott/
www.militaryfreezone.org
It's just hard for me to believe that a really rich former cheerleader from Connecticut has my best interests for retirement in mind. I trust RTV.
Weak.
Way to go, buddy!
Way to tow the AARP line. It would be great if RTV would actually represent the people it claims to. It is sad that RTV has sold out.
I used to think that this was a great organization. The goal of getting young people involved in the political process and voting was a great one. Now RTV is nothing more than a left wing talking points group. They are not interested in getting the young people involved in the process, they are only concerned with creating as many young leberals as possible.
So when are you going to put a MoveOn.org banner on your website? What a waste of a great concept.
I think it's pretty how you say that "polls show young people oppose private accounts, blah, blah" but on your own website, most of the comments support private accounts.
How can you also say that 70%-80% of you benefits isn't all that bad. Let me ask you, would anyone in their right mind invest in a 401k that returns 70%? 100% even? I want my investment to grow over the 30 years or so that I'm investing in it.
Why don't you just start yelling "Tax the rich, save social security!" I'm sure all us poor people will be all for that.
The Bush plan explained in by the master himself:
http://www.doonesbury.com/strip/dailydose/index.html?uc_full_date=20050410
Social Security is part of a socialist plan. It should be scraped and a new system of retirement established to allow individual investment and broad guidlines to give the person some say on how the money is invested. Take it out of the government's hands and all will be OK!
Hans's testimony was misleading. He says Social Security can pay our generation 70% for the rest of our lives, but he doesn't mention that after 2017 our taxes will have to be raised to pay for those decreasing benefits. But even if Social Security could pay us 70% without tax increases - who would want to pay into such a system? Can you imagine buying a stock that guaranteed you a negative 30 percent return? No wonder the government forces us to participate in Social Security! We shouldn't get rid of Social Security, but at least give us the choice to decide for ourselves. Isn't choice a fundamentally liberal value?
If more taxes are the answer to solve the problem of SS, then count me out. I don't care if there is no chance the system will get reformed to privatization.
Trying to save this system is a joke. The money you need from my check to bring this system back to 100% benefit payout is not worth it. Let me keep that extra money you would tax from me and let me invest it in my 401k so that I will at least get more than 100% return.
I am willing to accept a 70% payout just as long as you promise not to increase my taxes anymore. This is an endless scheme to suck more taxes out of my paycheck. I am willing to cut my loses just as long as you and your socialist friends leave me and my family alone. STOP INCREASING MY TAXES. If you don't want to change the system, then live with what is has become, a big endless vacuum for tax payers money.
I find it incredible that Rock the Vote, as an organization that should be representing the needs of our generation (I'm 22), is honestly going to sit here and tout the AARP's line of opposing Social Security reform.
I urge every one of you out there to do your own research on this issue. There is absolutely no way to solve Social Security's problems without raising taxes, cutting benefits, or enacting a reform that raises the rate of return. Those words don't come from me, they come from former President Clinton.
I, for one, do not want to pay higher taxes on Social Security, the tax that 80% of Americans (the lower 80%, mind you) pays as their biggest tax. Rock the Vote, you have sold out, and it is appalling that you're trying to sell our generation out to future tax increases or benefit cuts.
Quit playing politics and stand up for the group you claim to represent.
Hans, you lost me when you declared:
"... That safeguard, which is Social Security, should be sufficient to protect a middle class standard of living while at the same time lifting low income workers out of poverty."
The above statement is a great example of Marxism, "From each according to his abilities, to each according to his needs." Since when was SS created to pull people out of poverty? Since when was our government in the business to make sure that everyone lives in a middle class society (and who makes THAT distinction)? If I remember the stories my grandparents told me hard work and education was the key to get out of poverty... stupid me for listening to them, going to college and starting my own business at 21... all I needed was SS!
For goodness sake RTV has completely lost all credibility and has no right to speak on behalf of our generation any more than they want Bush to speak for them as Americans.
A general reply to some of the comments on here that I think misunderstand the debate over privatization. First, the 70-80% of benefits number is confusing, but this is what it means: If you do NOTHING to the current system, you will get 70-80% of what you would get if the system were fully funded. That means no raising taxes and you get 70-80% of a perfect world. If you want a perfect world, you have to put more money in to the system. 1/3 of the Bush tax cuts would do the trick.
Note this DOES NOT mean that without a change you only get 70-80% of what you put in. You get more back than what you put in regardless, because current law requires increases for inflation, cost of living, and increases in wages over time. Your money grows as time passes. The Bush plan seeks to "solve" Social Security's problems by cutting benefits and cutting these time-related raises in benefits. (that's what he means when he says switch from wage indexing to price indexing)
It is easy to say you fixed the shortfall by reducing the benefits. But note, that this reduction would be MUCH MORE than the 30% reduction we would have if we did nothing. We should demand that any so-called "reform" of Social Security at least doesn't make things worse than doing nothing. Cutting benefits is a bad idea!
Also, FYI, the whole point of Social Security is to insure against poverty in old age, when a parent dies, or becomes disabled. It is not an investent plan. Investments come on top of that gurantee so that no matter WHAT happens with your investments, you have that insurance and should not be forced to eat dog food when you are too old to work.
It’s sad that I see most of my age group aiming to destroy social security, forgetting that the reason it was created in the first place was to help the unemployed and the elderly through hard times
I urge every one to read why social security was created in the first place (hint: stock market crash of the great depression) you’ll see that the stock market is not a stable place and can burn you very quickly even when you think your on top of the world.
I’m a little older than most people blogging on this web site (28 years old), so life has burned me before, when my youngest sun was born with a heart anomaly it almost sent me and my family to the street literally, paying for the medical bills and losing time from work. They say all a liberalist is, is a Republican who had a does of real life. So before you right off social security or any other social program think of what impact it will have on you if you’re ever stuck between a rock and a hard place, if you ever invested in an Enron for instance, where would it leave you?
do not compare investing in a broad portfolio with investing in enron. that's intellectually dishonest. over no 20 year period has the stock market EVER lost money. when you're investing for the long term the stock market is not risky. being dependent on the arbitrary will of 535 legislators for your future - that's risky.
Ethos said "It’s sad that I see most of my age group aiming to destroy social security, forgetting that the reason it was created in the first place was to help the unemployed and the elderly through hard times"
I was unaware that SS had anything to do with the unemployed. I think if you get your facts straight you will see that it has nothing to do with unemployment. Unemployment is handled by the unemployment insurance that we all pay into.
Ethos I disagree with you definition of a liberal. I think a more accurate definition would be that conservatives believe in accountability and liberals think that everyone else should help pay thier way through.
Show me a young Conservative and I'll show you someone with no heart. Show me an old Liberal and I'll show you someone with no brains. - Winston Churchill
Hans has no idea what he's talking about.
The funny thing is that this government sinkhole is actually worse for the poor and minorities that they are claiming to help. The current social security system offers a pathetic .86% rate of return. Raising taxes or cutting benefits will only make said rate of return even more pathetic. We need personal accounts in order to assure a reasonable rate of return on our investment.
Looks like the Young Republicans coordinated a wave of replies on the blog after Hans's testimony. The problem is, the regurgitated GOP talking points are even more lame than the original ones.
The ad hominem attacks. The arguments by assertion. It's a one-stop-shop for finding examples of logical fallacies in political argument. Wish I hadn't wasted the last 5 minutes of my life reading this. The intellectual laziness and sloppiness are too depressing.
I don't know which anon to direct this to (since so many of you like posting under the cover of the anonymous handle), so I'll just make some points:
quote: "That means no raising taxes and you get 70-80% of a perfect world. If you want a perfect world, you have to put more money in to the system. 1/3 of the Bush tax cuts would do the trick... Note this DOES NOT mean that without a change you only get 70-80% of what you put in. You get more back than what you put in regardless, because current law requires increases for inflation, cost of living, and increases in wages over time. Your money grows as time passes."
First of all you're assumption that all we need to do is throw more money at SS to shore up the growing deficit is incorrect. The current system depends on having enough workers paying small amounts of their paycheck for one dependent. In the beginning that amount was in the low single digits as the number of workers per dependent increased during the baby boomer era. Now the number of workers entering the workforce has declined as many of the boomers had fewer kids than their parents and our generation (X and Y) are having fewer still. The contribution (read tax) to SS is now over 12% of our paycheck and will increase steadily over the next 20 years to meet the growing demand on the system.
Let face facts, the workforce is not growing fast enough to support the growing number of longer living Americans under the current system. The SS fund is nothing more than a lump of IOUs which members of both parties have been depositing in return for the use of SS funds towards general budget items (read social spending). We're facing a crisis here and its like half the country wants to just stick their fingers in their ears and hum kumbaya all the while ignoring these economic facts.
You're not going to save SS by putting more money into it, you're only going to delay the inevitable and end up making the coming disaster far worse for our generation to handle. You talk about the market crash of the 30's imagine, if you can, what the economy would be like once we're faced with the problem of having to take not only 30-50% of one's paycheck for income taxes but 30% on top of that for SS. How can the economy have any traction when the bulk of America is working just to support the government and retirees?
quote: "Looks like the Young Republicans coordinated a wave of replies on the blog after Hans's testimony."
Go have a look at the other postings on this blog and you'll see that this view has been here since day one.
Ethos, I'm sorry you got burned, however if all you invested in was enron then you did the one thing most investors advise against, putting all your hopes and dreams into one stock. The word diversify is something anyone who invests should take to heart, and the plans before congress to privatize SS include a diversification across many investment options.
big-ups to all the people having the courage to post pro-accounts messages on this blog.
i had my doubts about whether i'd really get proper SS benefits, and i'm relieved to know there's more of us out there.
thanks, keep 'em coming.
Sean Foushee,
It is true that right now the only money available to pay benefits comes from a payroll tax. Indeed, payroll taxes are regressive, as are sales taxes. But income taxes are progressive, which is why rich people don't like them. You misunderstood me if you thought what I was saying was that we should raise the payroll tax in order to save Social Security.
Yes, it is true that the ratio of workers to beneficiaries is going down, and that will cause problems. I didn't mean to say that the Bush tax cuts CAUSED the challenges facing Social Security.
However, if Congress refuses to make the Bush tax cuts permanent, and it dedicates some of that revenue to shoring up Social Security, we could save Social Security. Even just 1/3 of those tax cuts would do the trick.
The basic choice we have, as I see it, is whether we want to decrease tax cuts or decrease Social Security benefits. I like a program that keeps 50% of the elderly out of poverty and helps kids if a parent dies more than I like tax cuts.
As the President has conceded, private accounts would do nothing to shore up Social Security. It takes money out of the system faster. If people like the benefits they get from Social Security, that makes no sense.
To the previous poster. Your government eduction is working overtime. You concede the fact that the ratio of workers to retirees is drastically on the decline, yet you won't admit that the system needs to be changed. At least you're honest enough to admit there is a worker to retiree problem, which is more than I can say about your liberal leaders. The whole concept of how social security works is directly dependent on the fact that there would substantially be more workers than there are retirees. By this simple fact, SS is not working in the form that it was sold to us. There is soon to be only 2 workers to one retiree. When the system was created, it was 15 to 1.
The simple resolution to this is reform. Since the foundation of the system is broke, don't you think we should try to find a way to make it work without swamping the younger generation with a ridiculous amount of taxation?
Obviously, you don't have a wife, child, and house you pay for. For me, the Bush tax cut meant about $2000 of my hard earned money staying with my family. I am about as middle class as you get and I can tell you, this money bailed me out of some significant debt. My daughter was born last year, and we had about $2000 in medical bills owed to the hospital. You may be able to pay more taxes, but someone like me may not.
A great solution for you bleeding heart liberals that want to pay extra taxes is add an option on your tax return for those who want to pay more. If you have extra money to spend, send it to the government. I wonder how much you and your liberal buddies will send to the gov't without the threat of jailtime.
To this retarded statement,"As the President has conceded, private accounts would do nothing to shore up Social Security. It takes money out of the system faster. If people like the benefits they get from Social Security, that makes no sense."
I know your gov't education can fail you sometimes, but try to follow along. For all of us who decide to take the voluntary private account route, we would draw less from the old system and rely more on our private accounts. This would significantly provide relief on the system due to less payout obligations. As the number of paricipants increases on the private side, the less the burden will be for the government.
I concede that you're right if you are talking about short term. We do have an obligation to the current retirees, but by the time my generation comes up for retirement, the obligation would be for less. Simple, isn't it? After all, the current system is going to run into it's financial issues about the time my generation is retiring anyway. We need to have a fix in place by this time. Doing nothing will cost way more than acting now.
You can stay in the current system. By letting me out, you will have a better chance of receiving your benefits anyway. If anyone, you should support the option of opting out. I would still be paying into the old system just to satisfy your retirement needs. Everyone wins!!!
We already raised the taxes 20 times. Do you think we should set a ceiling on how much taxation should be allowed for Social Security, or do you think as we need more it should go up indefinitely regardless of what the percentage of income it may be?
Help me understand your support for this system in its current state. You already admit that Social Security's main source of income for this to work is flawed, worker to retiree ratio. Why wouldn't you want to fix it? Even the AARP says we should invest the money in the stock market to get a higher return. They just think you're to stupid to handle that responsibility and that the gov't should do it for you.
We need change. I know change can be difficult and scary, but sometimes it is necessary. Assuming you have moved out of mommy's house already, it was a big and scary decision for you, but I'm sure you look back and think, "what was I worried about?"
Lets do this and do what is right for our generation and the generation that is currently retired.
To "responsible american" and anyone misled by his post.
First, does it make you feel big and strong to call my education deficient? Buddy, you don't even want to tangle with me. For starters, I don't write the word "is" when I should write "are."
Second, you're right, taxes are a hardship for people who are middle class. I will try to explain my idea s-l-o-w-l-y so you can understand. President Bush wants the Congress to make tax cuts for the wealthy permanent. Instead of doing that, I think we should save Social Security. Tax cuts are foregone revenue that could be used for important national priorities. If you disagree with my priorities, at least just say that. You think millionares shouldn't pay more taxes than they're already paying. I disagree.
You're right, this would be a change from how the system is currently financed. As you say, change is scary, but I am sure with your loving wife by your side (she MUST be a very understanding woman) you will get through this alright.
Now this next part seems to be very difficult for you to comprehend, so I will explain again. Right now more money is being paid into SS than is being paid out. It's a pay as you go system, so as the ratio of workers to beneficiaries decreases, the strain on the system grows. Reducing the amount of money being paid in by current workers, by allowing them to divert a portion of their payroll taxes to private accounts, strains the sytem even more.
Now, that is, unless you want to talk about the clawback. That's right all you individualists, whatever you take out of SS has to go back in, with the same interest the money would have earned in the system. Even the President's commission on Social Security admitted this would require an unusually well-performing investment in order to provide ANY benefit to people who choose private accounts.
And don't even get me started on the costs of administration, money that could be used to improve education instead-- which you seem oh so concerned about.
Whoa, you IS losin' it. I'm not saying your education is deficient, I'm just saying it is limited. I don't even know where to start. Your emotions are getting way ahead of your logic.
To respond to your point:
"President Bush wants the Congress to make tax cuts for the wealthy permanent. Instead of doing that, I think we should save Social Security. Tax cuts are foregone revenue that could be used for important national priorities."
I already explained to you that I am not wealthy and was able to keep $2000 of my hard earned money do to the tax cuts for the rich. Who do you think pays the majority of taxes in this country? The top 20% income earners in our society pay 80% of the taxes. You know how much you have to make a year to be in that top 20%? About $55,000. You may not be at that income level yet, but I am and that is not a ton of money. What do you view is a fair percentage for us top income earners to pay? I would like to know, and I'm sure many others on this site would like to know.
I haven't heard anyone say do away with social security. I believe the discussion is how to reform the program so that it is viable for many years to come.
Also, It's reassuring to know that you can take my $2000 and spend it on something you feel is of national importance. My daughter appreciates your compassion.
I espcially love this comment:
"You're right, this would be a change from how the system is currently financed. As you say, change is scary, but I am sure with your loving wife by your side (she MUST be a very understanding woman) you will get through this alright."
You can't keep your socialistic views hidden for long. I'm glad that you're able to decide that my family will be fine paying higher taxes for the good of the country and national social programs. You're right that we will be fine because we don't rely on the gov't for our social well being, but you rest assure that I will fight like hell to make sure that socialists, I mean liberals, like yourself don't ruin this country and everything it stands for.
I like this comment as well:
"Now this next part seems to be very difficult for you to comprehend, so I will explain again. Right now more money is being paid into SS than is being paid out. It's a pay as you go system, so as the ratio of workers to beneficiaries decreases, the strain on the system grows. Reducing the amount of money being paid in by current workers, by allowing them to divert a portion of their payroll taxes to private accounts, strains the sytem even more."
Maybe, you should read a little s-l-o-w-e-r. I specifically said that private accounts are not a SHORT-TERM fix. The benefits of private accounts won't be realized until the first round of private account investers retire. Then the gov't payout obligations will significantly decrease. As you so wonderfully stated above, the system is taking in more money, which means a surplus for you gov't school educated children, so the system could sustain a certain small percentage of payroll taxes to be diverted to private accounts. This is why it is important to reform now before the system is running in the red. You know what is happening with the surplus now, its being spent by our wonderful politicians.
This one is a classic:
"Now, that is, unless you want to talk about the clawback. That's right all you individualists, whatever you take out of SS has to go back in, with the same interest the money would have earned in the system. Even the President's commission on Social Security admitted this would require an unusually well-performing investment in order to provide ANY benefit to people who choose private accounts."
What in the hell do you think politicians are doing right now? There is no money in the trust fund as we speak because your all mighty gov't spends it on everything under the sun. All the money they spend is borrowed and they have to pay it back with interest. What a scam. I can't believe you are in favor of letting these people run your safety net. That is why I keep saying you must have been educated in a gov't school. The only people I can think of that would think this is a good deal are the people that were educated by the creators of this scam.
This is unbelievable:
"And don't even get me started on the costs of administration, money that could be used to improve education instead-- which you seem oh so concerned about."
Yeah, that's the problem with our education system, MONEY. We spend more money on education per student than any country in the world, and still we produce a sub par product in comparison. Why do you think that is? Hmmm. Try looking to the teachers union who won't let the system be reformed. Why can't we have vouchers? The area I live in has terrible gov't schools that I pay for, but there are some decent gov't schools not more than 30 miles away. Your wonderful gov't school system doesn't allow me to take my child to the better school because I don't live in that district; mind you, my taxes are going to that school as well. So, I'm going to be forced to put my child in a private school with a price tag of $5000 a year, or move 30 miles to another district, which is very expensive to live in. Once you're done taking my money for your national programs, maybe I won't be able to afford the private school. Then what? The way it is set up now, only the rich have access to the best schools. If we had vouchers, those schools would be opened up to middle and lower class kids as well. As a lib, how can you be against that.
Before you respond back, you might want to wait a few years until you grow up a little and understand the real struggles a family goes through due to gov't interference. It is easy to get emotional about these topics because who wants to see the elderly living in poverty, kids uneducated, and the middle class over taxed? No one. We just disagree on the path to avoid these situations.
The funny thing is that this government sinkhole is really worse for the poor and minorities that they are claiming to help. The current social security system offers a pathetic .86% rate of return. Raising taxes or cutting benefits will only make said rate of return even more pathetic.They need personal accounts in order to assure a reasonable rate of return on our investment.
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nelson
http://www.treatmentcenters.org/connecticut
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