A town hall meeting last night at a West Des Moines hotel featured former governor Terry Branstad, an ISU economist, and others who favor the idea of sidetracking money from the Social Security fund and finding more lucrative ways to invest it, for older Americans’ “safety net.” Former Omaha mayor and Nebraska Congressman Hal Daub is chair of the Social Security Advisory Board and says the fund will be over-tapped when the Baby Boom generation retires in a few years.There are already fewer workers, he says, and more retirees who also live longer, so in coming years Daub foresees having to either cut benefits or raise taxes on a still smaller number of workers. Putting retirement money in the stock market proved a big disappointment for many who’d sunk their pensions into Enron and Worldcom stock the last few years, but Daub says that shouldn’t deter fans of the idea. Daub says those who are against “partial privatization” don’t have any other alternative. Critics say there’s enough in the social security fund to pay full benefits for at least four decades to come, but Daub says something will have to be done for the long term. He calls it an important issue that won’t go away, and critics can’t simply oppose privatization. Daub says most Americans pay more in retirement payroll tax than they do in income-tax.He says workers have 6-point-two percent of their income deducted for FICA — for old-age, survivors and disability, matched by their employers — though the self-employed have to pay twelve-point-four percent to that fund, and Medicare’s Hospital Insurance adds two-point-nine percent which, for the self-employed, all adds up to 15.3 percent. Backers of investing Social Security money say there will be little risk of losing the investment. He says the individual beneficiary wouldn’t be allowed to invest their money and go broke, but rather one-percent of the person’s account would be invested for them and might bring a seven or 8-percent return, a plan he says would still only solve half the longterm shortfall of Social Security. While the program’s referred to as a “safety net,” Daub says nobody will suggest retired Americans with union, private or other retirement funds forgo collecting Social Security to leave the fund more solvent. For Medicaid there’s a “means test” so only low-income patients get that healthcare assistance but Social Security is for people he says might not fit any definition of poverty but still might have a tough time making ends meet. The group “For Our Grandchildren” sponsored the roundtable, which featured a genuine kitchen table for participants.
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