Opinion: Thompson’s got a plan for Social Security. Sort of.
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Fred Thompson offered a proposal today for dealing with Social Security’s anticipated meltdown, and it includes a plank likely to draw fire from the conservatives he has been courting since before he made it official (though he has banged this drum before).
The plan: Provide a federal match for private investments in an ancillary 401(k)-style savings account. Individuals could contribute up to 2% of their monthly income and receive the federal match. Thompson offered no estimate of how much that would cost. But it would not allow workers to opt out of the Social Security program itself -- a linchpin for those advocating independent retirement accounts.
Thompson also called for indexing future benefits to changes in the price of goods rather than to wages, though he offered no estimates of what sort of savings that might lead to. But he said it would not affect people age 57 or older (he earlier put that level at 60).
Significant here is the general lack of details. Thompson offered these four bullets of goals:
* Leave Social Security benefits received by current retirees and those near retirement completely unchanged and fully preserve their annual cost of living adjustment. No one now over the age of 57 will be affected. * Preserve and strengthen Social Security for future generations of Americans and guarantee the current benefit structure, fully protected for inflation. * Increase retirement options for today’s workers -- and future generations -- by giving them the option when to retire and allowing them to build wealth they can pass on if they so choose. * Completely eliminate the estimated $4.7-trillion unfunded Social Security liability over the 75 year actuarial planning horizon and leave Social Security permanently fiscally sustainable.
But the proposals he offered say little about how he would achieve those goals. Why create too many specific targets for your opponents to shoot at? But, for instance, how would this plan ‘preserve and strengthen’ the system? The proposal would seem to do more to help those who can afford to build their own retirement funds than it would to resolve the projected Social Security deficit.
-- Scott Martelle