The Heritage Foundation is the think tank for so-called conservative Republicans, who offer flat tax plans, skeleton government goals and the destruction of Social Security as we know it today.
The current Social Security program is regressive, and pays a lower percentage in retirement pension, the more you contribute. A retiree, who has paid in the maximum amount (on wages less than about $118,000 in current dollars), will contribute three times as much FICA taxes and receive only twice the benefit at retirement. But at least there is some relationship between the amount of taxes paid and the value of benefits received.
Rather than attempting to make the program more fair, the so-called capitalist Heritage think tank has gone completely Communist by urging a Marxist doctrine of “from each according to their earnings to each according to their needs.”
The foundation wants to pay anyone, who contributes even a pittance into the system, exactly the same benefit as the person who pays the maximum.-
Fake capitalists and their think tanks are clever marketing masters, so don’t believe the flat benefit is somehow helping the lowest paid workers. The Foundation muses:
The centerpiece of the new Social Security system involves a gradual transition to a flat benefit that pays retirees who qualify for a full Social Security check. This amount is well above the income level that the Census Bureau says an American over the age of 65 needs to avoid poverty. Thus, the new system will guarantee that no retiree falls into poverty because of insufficient income…
The flat benefit will be the equivalent of about $1,200 per month in 2010 dollars when the reform is complete. This is both higher than today’s average Social Security retirement benefit payment ($1,164 per month) and well above the 2009 poverty level for a single adult over age 65 ($857 per month). To ensure that future retirees do not slip back into poverty, the flat benefit level will be indexed for wage growth.
Today’s maximum benefit is $2,663 a month per person at current normal retirement of 67. We have S.S.I. and other programs to insure that seniors “avoid poverty.” In fact, to support low income workers the bottom third of Social Security recipients receive 90% of their prior earnings, while the top third are at only 15% (the regressive system referred to above.)
If the GOP stands for real capitalism it would applaud a system, where those who work hard and contribute more to their retirement, should receive a higher amount. There is a huge difference between $2,663 and $1,200 a month. The only conclusion is that the GOP wants to take from the middle class, period. (This same foundation document calls for eliminating the estate tax and ending all sorts of taxes that affect only the rich.)
Under the Heritage plan if you make more than a set amount in retirement, you will not be entitled to any benefits from Social Security. The age of eligibility will also be increased and cost of living raises will be reduced by using a different formula authorized by other think tanks. The Foundation boasts:
Because the new Social Security is a real insurance system, designed to protect seniors from poverty, retirees with high incomes from sources other than Social Security will receive a smaller check, and very affluent seniors will receive no check. This transparent way of income-adjusting benefit checks will replace the method used today, whereby the checks of even modest-income seniors are taxed and thus reduced.
The “high income” folks will be determined by regulators, Congress, the President? Doesn’t sound like ‘free enterprise.” The Foundation also thinks we all live so long that the full retirement age needs increasing from the current 67.
Americans live much longer than they used to. While this is good news, it means that they are spending a much higher proportion of their lives in retirement. Regrettably, these longer retirements play a major role in Social Security’s financial problems. For this reason, the Social Security retirement ages will be raised gradually and then indexed to life expectancy. This will create a more reasonable balance between the number of years a person works and the number of years one receives Social Security benefits.
The Foundation might have added that the later you retire, the more frail you become, and the fewer years you collect. You could try to work, but getting a job at 66 isn’t as easy as martini lunches at a foundation. Unfortunately, different folks have different lifespans. For example, the average life expectancy of an American Black male is 68, which is less than the proposed increase to 70 or more. The plan for Americans in that group is death before benefits are paid.
To help make up the difference between the new Social Security benefit and what workers may desire for a more comfortable retirement, our plan will create greater incentives for workers of all income levels to save more for retirement. These savings will supplement their Social Security and create a more secure retirement.
Those “savings” (if you can afford them) will be invested, I suppose, by big financial institutions, who will collect a relatively large commission each year, leaving you with far less than a fair, no commission plan like Social Security. Of course, forcing us to use banks, means more money for banks. Somehow $1,200 a month is “more secure” than $2,663, according to the foundation thinkers.
This plan was developed as part of the Solutions Initiative and funded by the Peter G. Peterson Foundation. Forbes describes the backer this way:
Peter Peterson made his fortune on Wall Street, co-founding what has become the world’s largest private equity shop, Blackstone Group, in 1985.
Only the naive might ask why a private equity guy with more than $1.5 billion would finance a study that takes from the middle class so taxes won’t increase for the rich?
Better yet, are Bernard Sanders, Michael Dale Huckabee and Donald John Trump, Sr., all “socialists” for wanting to preserve Social Security as a fair system that rewards hard work and years of contributions?
Are Marco Antonio Rubio, John Ellis Bush, Christopher James Christie and the rest of the GOP Presidential contenders “capitalists” for wanting to turn Social Security into a welfare program paid entirely by the working class?
In any event, don’t ask Peter Peterson, or his followers in Congress and the White House, why we need to “reform” Social Security, because you already know the answer – redistribution is good for the finance industry and the rich who benefit from it.
It’s crony communism. Lenin would be proud.