House GOP Plan Swaps Benefits, Accounts

Yahoo News reported The House Republican plan to overhaul Social Security requires retirees to give up their guaranteed benefit level if they want a personal account that can be passed on to heirs, GOP aides said Monday.

If all of their SSI payments, and all of their employeer's payments, both from now on, AND retroactively since they began paying FICA, go into that account, then this would be fine, but if only a small percentage is to go into the personal accounts, then this would not be reasonable.

Only those who invest the accounts in government securities while they are working and in an annuity when they retire can be certain of receiving the full Social Security benefit they are promised, the aides said. Other investment decisions would expose individuals to the ups and downs of the financial markets. That means their monthly benefit could wind up lower or higher than now envisioned.

And that decision should be left up to the individual.

The aides, who work for the House Ways and Means Committee, described details of the bill to reporters on condition of anonymity. Creation of personal accounts that give workers a nest egg they can pass along to their heirs has been a major selling point in the GOP drive to overhaul Social Security. Personal accounts would be established for all workers except those who decline one under the legislation introduced last week. The program envisions individuals receiving a monthly benefit that consists of a blend of traditional Social Security — from the program's trust funds — and money from personal accounts.

Jayson @PoliPundit blogged I generally find David Espo to be nearly as credible as a “Rolex” watch being sold for $10 on Bowery Street, but if this report is accurate it looks as though Republicans who dominate the House Ways and Means Committee are putting together the preliminary outline of what likely will be a 10 to 15-year process substantially to reform the National Ponzi Scheme.

Susie Madrak blogged Yeah, the Plame stuff is intriguing, but let’s get back to basics