Paul Silvers looves pretending to be someone else....
"Harry Hope" <hhope@N0BRAINS.C0M> wrote in message
news:ao4v1195ankg26hffbfnuvfnfkdt8l1goj@4ax.com...
On Fri, 25 Feb 2005 18:49:24 GMT, escape
<get-outof@thebestplace2be.org> wrote:
Women have special stake in Social Security debate
Any change to Social Security more likely to affect women, who make up
most of
system's beneficiaries
By Larry Lipman
WASHINGTON BUREAU
Friday, February 25, 2005
WASHINGTON -- For women, even more than for men, the debate over
individual
accounts for Social Security pits security against opportunity.
Women make up about 60 percent of all Social Security beneficiaries and
70
percent of beneficiaries 85 and older. Half of women 65 and older would
live in
poverty if not for Social Security, and the system is the only source of
income
for one-fourth of elderly women living alone.
The system's benefits have been designed to compensate for the fact that
women
generally live longer than men, make less money and are more likely than
men to
leave the workplace for many years to raise children or care for an
ailing
relative.
Because women have so much at stake in a Social Security overhaul, it's
no
wonder that women are always included in President Bush's town-hall
meetings
touting individual investment accounts for retirement.
For the same reason, the Senate's Democratic women and activist women's
groups
have banded together to denounce Bush's Social Security proposals as
particularly harmful to women.
The two sides are emphasizing different points.
Supporters of individual accounts stress the potential for increased
benefits;
opponents focus on the loss of guaranteed benefits that would accompany
such
accounts.
"We know that Social Security is a women's issue," Kim Gandy, president
of the
National Organization for Women, said at a recent news conference. "The
proposed
Social Security privatization plan will undermine women's financial
security."
Supporters of individual accounts argue that Social Security is unfair
because
it is based on a 1930s-era family structure that rewards stay-at-home
moms and
penalizes single and working women. They argue that working women would
do
better with individual accounts.
"Security is a relative term," said Leanne Abdnor, executive director of
Women
for a Social Security Choice. "I believe that real security comes from
not
relying on one source of income."
Bush has not released a detailed Social Security plan. So far, he has
specified
only the size of the individual accounts: 4 percent of taxable wages up
to
$1,000 a year. He has not indicated what benefits would be cut, or by how
much,
to offset the cost of private accounts.
That has left both supporters and opponents of private accounts free to
make a
variety of assumptions about how the accounts would work and what
benefits could
be cut. Whether women would do better or worse with individual accounts
depends
on the assumptions being made. The biggest difference in assumptions is
the
prediction of how well individual investment accounts would perform.
Supporters of individual accounts, including the President's 2001
Commission to
Strengthen Social Security, the Heritage Foundation and the Cato
Institute,
predict average annual rates of return varying from 4.6 percent to 6.2
percent.
Critics of the accounts, including the Center on Budget and Policy
Priorities
and the Economic Policy Institute, have used a more cautious prediction
by the
Congressional Budget Office of about 3 percent.
Both sides agree that the rate-of-return assumption is crucial.
"If you use 3 percent, there is no way in the world you are going to come
out
ahead," said David John, a Heritage Foundation research fellow who
specializes
in Social Security issues.
Heritage assumes an average 4.7 percent rate of return. Based primarily
on that
assumption, a Heritage report predicted that an average-income divorced
woman
born in 1960 would receive $995 a month in traditional Social Security
benefits
in 2025. If that woman were allowed to invest in an individual account,
she
would receive $1,025 a month even with a reduction in scheduled benefits.
The budget office, using a 3 percent rate of return, predicted that
median-income people born during the 1960s would receive $1,292 a month
in
traditional Social Security benefits but $1,092 a month with a
combination of
reduced benefits and individual accounts.
Several features of the current system have emerged as flash points in
the
debate:
* Social Security gives low-income workers a higher share of their
pre-retirement income than high-income workers.
Supporters of individual accounts argue that low-income workers,
including
women, would receive more retirement income if private accounts are
allowed
because the accounts would earn a higher rate of return than Social
Security
provides.
Opponents of individual accounts argue that low-income workers will not
be able
to accumulate a large enough investment to offset the reduction in
guaranteed
Social Security benefits that would accompany such accounts.
* Social Security pays a spousal benefit equal to half the higher wage
earner's
benefit.
Supporters of private accounts argue that the spousal benefit penalizes
working
women because their payroll taxes do not result in an increased benefit
unless
they earn nearly as much as their husband. They also argue that it
discriminates
against working couples because the benefit formula gives more money to a
single-earner family than to a two-earner family with the same income.
Opponents of private accounts agree that the formulas could be changed to
provide greater benefits to working women, but they argue that individual
accounts would penalize women who work part time or are stay-at-home
moms.
* Social Security pays a 50 percent spousal benefit and 100 percent
survivor
benefit to divorced spouses -- usually women -- who were married at least
10
years and did not remarry before age 60.
Account supporters note that the average divorce occurs at about seven
years of
marriage. so those women would not be entitled to any of their husband's
benefits. With private accounts, the husband's and wife's accounts could
each
become part of a divorce settlement.
Account opponents say the eligibility period should be shortened, but
they argue
that individual accounts could hurt divorced women. Currently, a man
might have
several former wives, each of whom would receive the same benefit,
without any
reduction in his benefit or theirs. With individual accounts, the amount
of the
investment would be split, leaving less benefit for a future wife.
* Social Security offers inflation-adjusted lifetime benefits.
Supporters of private accounts say women would be able to buy
inflation-adjusted
lifetime annuities.
Opponents say annuities that account for inflation are much more costly
than
those paying a fixed amount. And they note that most states let annuities
pay a
lower installment payment to women than to men because women have a
longer
expected life span.
http://www.statesman.com/news/content/auto/epaper/editions/friday/news_24e1
bdc1c556603c002e.html
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