BluegrassReport.org

Another Attack On State Employees: State Pension Fund Privatization and Raising Of Retirement Age Begins...

I guess the State Senate is hoping we're not going to notice that they are advocating the things that the public has already rejected when it comes to Social Security reform: privatization and effectively raising the retirement age.

Let's see how many Democrats want to be viewed as doing this to state workers after what the Fletcher administration has already done to them.

From Jack Brammer this morning:

The Senate budget committee Tuesday unanimously approved a bill to issue more than $500 million in bonds and limit benefits for future state hires to address financial problems of the state retirement systems.

...people hired by the state after July 7 would have different benefits than current employees.

For example, instead of working 27 years to receive full retirement benefits from the state, employees would have to work 32 years.

Proceeds from the sale of the bonds would be invested by the state retirement systems in hopes that investments by the retirement systems would make more money and offset the bonds’ cost.

But the $60 million a year to pay for the bonds would have to come from the state's General Fund, Williams said.

U.S. Rep. Ed Whitfield's (R) Disturbing Comments Concerning Social Security

The Times Leader in Princeton (Caldwell County) published a story yesterday about the town hall meeting that U.S. Rep. Ed Whitfield (R) held last weekend.

In the story was this disturbing passage:

As the nation’s baby boomers become retirees and senior citizens, Social Security payouts will soon exceed the program’s revenues.

“We know that in about the year 2014 or 2015, there’s going to be more money going out than coming in,” he said. The government will have to make up the difference, he added, most likely by borrowing funds. 

Assuming this story is accurate, Whitfield's comments about the state of Social Security shows that he is either very ill-informed or utilizing political scare tactics.

First of all, on a smaller point, the Congressional Budget Office in its June 2006 update projects that not until 2019 will expenditures exceed revenues. The 2006 Social Security Trustees' report put that date at 2017. In either case, Whitfield needs to get better data on that threshold.

But what is particularly egregious is Whitfield's assertion that when expenditures exceed revenue (be it 2014, 2017 or 2019) the "government will have to make up the difference...by borrowing funds."

According to the most recent financial data available at the Social Security Administration's own website, the Social Security Trust Fund is sitting on assets of $1.994 trillion.

Yes, trillion.

Not until 2042 (SSA) or 2046 (CBO) would we have to borrow money to "make up the difference." I'm just hoping that the story erroneously reported Whitfield's remarks and that he's not this misinformed or would stoop to political scare tactics when discussing Social Security.

In case you need a primer on how the agency handles its revenue, expenditures and the Trust Fund:

What happens to the taxes that go into the trust funds? Tax income is deposited on a daily basis. That part not immediately needed to pay benefits or administrative expenses is invested by purchasing "special issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.

If all the income is invested, how do benefits get paid each month? Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. In fact, the principal amount of special issues redeemed, plus the corresponding interest, is just enough to cover an expenditure.

What were the amounts of securities bought and sold during recent years? The amount bought in 2005 was $931.9 billion, while the amount sold was $759.4 billion.

New Survey USA Poll Shows McConnell, Bunning WIth Lowest Approval Ratings In Any Of Last 11 Polls

Survey USA 50-state numbers are out on the nation's 100 senators and it's not pretty for Senator McConnell or Senator Bunning.

For the first time in the 11 polls done by Survey USA in Kentucky since last spring, Senator McConnell has fallen under the 50% threshold and Senator Bunning under 40% threshold.

Senator McConnell job approval stands at 49%, while 40% disapprove. That is down from 53%-37% last month. McConnell's approval ranking compared to his colleagues has plunged from #61 all the way to #80. When looking at net approval (difference between approval and disapproval), McConnell has fallen from #62 to #87.

Senator Bunning's job approval is really tanking with just 39% approving and 47% disapproving. He stood at 46%-39% last month. He now ranks #99 among the 100 senators in approval -- just one point ahead of Senator Conrad Burns (R-MT).

Yesterday, BluegrassReport.org reported Governor Fletcher's poll numbers which show him at just 33% approval.

GOP: 'we misjudged Democrats on social security'

Kos has a great post on how President Bush is waving the white flag on Social Security. Here's an excerpt, but I recommending reading the whole thing. Anne Northup bought and tried to sell Bush's privatization scheme and it's sure to hurt her quite a bit in 2006 if Jack Conway enters the race.

In a long look at Bush's social security debacle in the (subscription-only) Wall Street Journal, Allan Hubbard, the top White House economic advisor, says something quite remarkable.

The White House insists its Social Security strategy was correct. "Obviously we wish we were talking about the president signing legislation," says Mr. Bush's chief economic adviser and college friend, Allan Hubbard. "I can't -- we can't -- really identify where we went wrong in the approach, other than that we misjudged the Democrats, and particularly the leadership, and the AARP."

They "misjudged" Democrats. Translation: they didn't expect Democrats to stick together, and where nonplussed when the party held tight. They didn't expect the leadership to fight back, but Harry Reid was aggressive and effective in getting the Democratic message out while holding his troops together.

And remember, Democrats accomplished this while Bush was riding his post-election high -- killing his signature domestic proposal and dragging his approval ratings down even before Iraq, Katrina, and Miers conspired to complete Bush's transformation to "lame duck" status.

NRCC Chair Wants Social Security Reform Dropped (Political Wire)

Looks like a Republican congressional surrender to me on their unpopular and unworkable Social Security privatization and dismantlement scheme.

NRCC Chair Wants Social Security Reform Dropped
Rep. Tom Reynolds (R-NY), chairman of the National Republican Congressional Committee, told House Speaker Dennis Hastert (R-IL) and fellow Republican lawmakers on Wednesday that the party should drop Social Security legislation this year, citing the potential repercussions it could have on next year's elections, according to the AP. Hastert later said that he believed Reynolds was only conveying his own personal view.

More Evidence of a Republican Party Coming Apart At The Seams

Josh Marshall notes that the Republican Party from Rep. Ron Kind's (D) 3rd district in Wisconsin blasts the congressman for celebrating the 70th birthday of the "Socialist Ponzi scheme" Social Security.

Republican Leaders Seek Exit Strategy on Social Security (Washington Post)

A good sign that Bush and Congressional Republican leaders (like Mitch McConnell) see that the public has no appetite for their scheme to privatize Social Security.

Today's Washington Post has the scoop.

EXIT STRATEGY ON SOCIAL SECURITY IS SOUGHT
GOP Leaders Cite an Impasse With Democrats on Proposed Private Accounts

By Jonathan Weisman and Jim VandeHei
Washington Post Staff Writers
Thursday, June 16, 2005; A09

With the Senate Finance Committee at an impasse on Social Security and House leaders anxious about moving forward, Republican congressional leaders have told the White House in recent days that it is time to look for an escape route.

Senate GOP leaders, in discussions with White House Deputy Chief of Staff Karl Rove and political officials, have made it clear they are stuck in a deep rut and suggested it is time for an exit strategy, according to a senior Senate Republican official and Finance Committee aides.