The Kiplinger Letter (Subscription Required)

A bipartisan accord on Social Security?  It’s not just a Washington pipe dream.

Serious negotiations are now under way. And they will lay the groundwork for a deal...not now, but probably by 2010.  The crisis is too big to let slide. Within a decade, there’ll be too few workers paying FICA to keep up with benefit checks.  Without reform, Social Security obligations will virtually bankrupt the country by 2040.

He’s [Treasury Secretary Paulson] already showing real progress, making Bush realize that partial privatization, a nonstarter for Democrats, is all but dead.

And the president no longer rules out higher taxes as part of a package. Democrats, in turn, are willing to talk about cutting future benefits.

What a crappy deal.  Let’s not call this reform.  Let’s call this screw the folks who aren’t in their ‘50’s or older.

The outlines of a Social Security reform plan are taking shape:  Smaller benefits, but just for future, upper-income retirees.  Introducing means testing will turn the Social Security program into more
of an income redistribution program...no longer just a retirement plan.

Is this breaking of the Social Contract as the old-timers call it.

An older retirement age, to 70 at least, phased in gradually.

This one makes some sense.

Higher taxes on big earners, implemented by doubling the cap on wages subject to the payroll tax. The employer share will also rise, adding to business costs. One consolation: No change in the tax rate.

So make it tough for the wealthy to save for their retirement while taking away their benefits. 

Universal 401(k)s. All workers will be eligible for 401(k) plans to supplement Social Security. If their employers don’t offer one, they’ll be able to join government-backed 401(k) plans but won’t have to.
They’ll come with a federal match giving more to lower-income employees.

Where is someone going to come up with any money at all to save after paying the high taxes we’re being stuck with?  Social Security already eats up nearly all of the money that a person could use to invest.  Secondly this is another giveaway to the poor financed with the people that are already paying all of the general fund taxes.

Benefit cuts won’t apply to those already retired or close to it.  The burden will fall on younger workers, probably those born after 1960.

Excuse me, we didn’t create this monster but we’re going to get stuck paying for it, while at the same time getting screwed when it comes time for us to retire.  It’s a simple fact that there’s been more than enough money confiscated from our paychecks to retire on but the government has blown the money on vote for me programs.  I assume that these higher taxes will take effect immediately and the Congress will follow the normal course and spend the money right away.

Calling this ‘reform’ is a perversion of the word.  Call it the greatest generational screwing over since FDR.