Trial balloon: Bush compromise: Curbs on Accounts

[papau]

Trial balloon: Bush compromise: limiting the costs and risks of moving to the new system by phasing in changes and offering more conservative investments for people as they near retirement - willing to explore ways to prevent lower-income workers from having their benefits cut.

http://www.washingtonpost.com/ac2/wp-dyn/A52565-2005Jan31?language=printer

Bush May Back Curbs on Accounts
President Courts Critics Of Social Security Plan
By Jim VandeHei and Jonathan Weisman
Washington Post Staff Writers
Tuesday, February 1, 2005; Page A04


President Bush is privately expressing support for limits on the cost and risk of partially privatizing Social Security, in an effort to mollify nervous Republicans and win over dubious Democrats, according to White House aides and congressional Republicans.

Bush, who plans to make Social Security the centerpiece of tomorrow's State of the Union address, has privately told GOP lawmakers and aides that he would support phasing in changes to the system to keep deficits under control over the next several years and push individuals who opt for private accounts into more conservative investments, such as bonds, as they near retirement to mitigate long-term risks, the sources said.

In addition, Bush has expressed strong support for protecting lower-income workers from the brunt of any future reductions in benefits, a chief concern of Democrats. The Treasury Department is doing a budget analysis to determine how many lower-income Americans could be shielded from benefit cuts necessary to offset the overall cost of creating private accounts, the officials said.

"The administration as a whole is committed to an unprecedented effort to better communicate the proposal," especially its limits on cost and risk, said Rep. Rob Portman (R-Ohio), a top White House adviser.<snip>

[burythehatchet]

1. the answer is still

NO

[Gman]

2. And we already know how they will do this...

"The administration as a whole is committed to an unprecedented effort to better communicate the proposal," especially its limits on cost and risk, said Rep. Rob Portman (R-Ohio), a top White House adviser.

http://www.dailykos.com/images/user/3/GOP_SocialSecurity_Playbook.pdf

[Inland]

3. But then they have to reduce the earnings projections of private accounts

Instead of assuming the same growth as the S&P 500 as the average, they will have to reduce the average growth to a mixed bond-stock portfolio and thus changing the difference between the average benefit of the private accounts and the present system.

What am I saying? They'll just leave that out and lie to us all. Dicks.

[Inland]

4. But then they have to reduce the earnings projections of private accounts

Instead of assuming the same growth as the S&P 500 as the average, they will have to reduce the average growth to a mixed bond-stock portfolio and thus changing the difference between the average benefit of the private accounts and the present system.

What am I saying? They'll just leave that out and lie to us all. Dicks.

[wtmusic]

5. "The administration as a whole is committed

to hanging Social Security out to dry."

Tell it like it is, Rob.

[Coastie for Truth]

6. So they are reducing the "effective" or "apparent" yield

1. Limiting the investment options to very conservative issues. Not much better then Federal Bond rates.

2. The next step back will be "Principal and Income" insurance on the fund corpus - as in FDIC or FSLIC or NCUSA or FPBGC- which even for a balanced equity fund could run to 1.25% of the corpus.

3. We still haven't rolled in the $80-$90/month for Survivors' and Disability coverage.

What are we left with?

INDIVIDUAL ACCOUNTS 100% IN U.S. TREASURY BONDS BACKED BY THE "FULL FAITH AND CREDIT OF THE UNITED STATES" PLUS SURVIVORS AND DISABILITY INSURANCE

Didn't we just go round in circles ?

CIRCLE JERK ?