Thursday, January 29, 2009

Robbery By Any Other Name

Today's example of the Obama Party mentality, brought to you by liberal and self-determined Social Security expert Susan Alexander.
Let's exclude high rollers from receiving Social Security benefits. Affluent individuals can refuse to receive them, but many have chosen to take them instead, creating a glaring example of waste.

A means test that would exclude seniors who live in wealthy households could start us on the road to saving Social Security

Problem is, Social Security already HAS a means test that is used to reduce benefits for the affluent; it's called the bend points.
PIA formula
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2009, or who dies in 2009 before becoming eligible for benefits, his/her PIA will be the sum of:
(a) 90 percent of the first $744 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $744 and through $4,483, plus
(c) 15 percent of his/her average indexed monthly earnings over $4,483

Put into English, what that means is that the more you earn, the less you get credited for it -- even though the more you earn, the more you pay into the system.

And where is the income threshold cutoff for what constitutes "affluent", at which point you have too much money and should start receiving proportionately less in benefits?

$8,928 per year.

In short, the Obama Party believes that the key to "saving" Social Security is to punish success on both ends; not only will those who earn more and pay in more get credited less, but now they'll have even that taken away if they dare to accumulate assets or retirement savings.

One can only hope that Susan Alexander gets the trip to Washington she so obviously deserves to advise Pelosi and Obama. It should be hailed as another example of Obama Party political brilliance to state to the public that they are going to take people who have worked, saved, and paid into the Social Security system at the highest rates for over forty years that they get no benefits -- especially as they put into power officials like Timothy Geithner who don't pay their Social Security taxes.

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