Alternatives
Domenici-Rivlin
“Restoring America's Future” , (See page 17)
Endorsement
Terrible. This plan will take money from people who are in poverty, and gives it to people who may be in poverty. This plan gives general taxpayer support to the system which is unfair to those people who are not covered by the system.
How Does It Work?
Domenici-Rivlin is a mix of lower benefits and higher taxes. According to IBD, this plan would “phase-out of the tax-free status of employer-provided health coverage”. Ouch! The plan makes the system ‘more progressive’, which means it will give more to lower-income Americans. It forces more workers to join the system.
Strengths
This plan has not one redeeming value. It takes the worst aspects of Social Security and makes them bigger. This plan throws out the baby and keeps the bathwater.
Weaknesses
This plan makes the problems bigger, and the consequences harder.
Distortions
“The tax holiday will not impact the solvency of the Trust Funds.”
This is not true. The tax-holiday directly increases the size of the budget deficit, which is the greatest threat to Social Security.
“Increase the minimum benefit for long-term, lower-wage earners, and protect the most vulnerable elderly with a modest benefit increase.”
The Social Security system has no idea who is vulnerable and who isn’t. This plan will take money from people who are in poverty, and give it to people who may be in poverty.
Open Questions
How can anyone ask more of American workers and gives retirees less so that the money in the Trust Fund can be invested at 2 7/8%?