Once you start to see the numbers explained on social security it becomes fairly obvious that there are lots of options and combinations. I can see why GWB isn't interested in putting a plan out there, but I don't see why the critters haven't got six or seven ideas tossing around yet. This seems to be yet another example of our no-op Congress. I'm going to start taking them to task, because I'm tending to believe that the only significant thing they've done in the past 10 years are McCain-Feingold and Sarbanes-Oxley.
Firstly, I think means-testing is a very good idea, and I would do it with today's retirees whether they like it or not. I know we don't have many critters with the testicular fortitude to pass such hardball legislations, not given the AARP's spare cycles. But really this is all about them, and I for one am sick of them - them being people with brand new Lexus convertibles with the blue handicapped stickers. I'm sorry, but old rich people deserve nobody's sympathy. Not while Americans die with their boots on. One would expect of old rich Americans, senators for example, some decisive action worthy of bullheadedness and having nothing to prove. But that's hoping for too much, I gather. On with it.
Means Testing
In the Cobb plan, benefits are means-tested. That means that people with a certain amount of assets and income are excluded from recieving full benefits. Period. If you're getting top tax bracket retirement income, you get reduced benefits.
Retirement Age
Lift it with a catch. Make it flexible like tax brackets which is to say that depending on how many are in the beneficiary class, indexed to life expectancy the earliest you are eligible changes. In other words, make it such that the number of people eligible changes in response to the demographics that got us into this mess.
Salary Cap
No. Don't raise it, leave it at 90k. I think you can't raise the salary cap and have means-testing too. We can inconvenience the rich and not coddle them, but we can't soak them as well.
Tax Increase
Yes. A one time fee. Charge everyone an extra 3% then 2% then 1% over the next three years while we've got everyone's attention. Put this someplace where Congress doesn't play with it and bump up the surplus a little. It's a crisis, so call it a crisis tax.
Private Accounts
No. As appealing as this sounds, I don't trust the government to tell me what my choices are. Expand what already exists for IRAs, 401ks and all the other tax-exempt savings plans. We need to encourage savings for all the right reasons, let those remain the reasons, not because Social Security is broke.
Entitlement
Scale the whole program back a wedge. Let that in and of itself be a greater incentive for people to stop depending on government.
Maximum Payout
Nobody gets more than 20 years of benefits. Period.
Other Reforms
Allow benefits to be transferrable to family members. IE work them a bit more like real assets and less like insurance. Make it a hybrid, rather like Term Life. IE throw a little bit of a death benefit into it which scales towards zero as retirees eat up their 20 years.
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