On the shell it seems like the best proposal Ive seen thus far. The cap stays where it is, taxes stay where they are, and we pass on adding 4 trillion or so to our already out of control debt.
http://www.investmentnews.com/news.cms?newsId=1556MFS chairman Robert Pozen says there is still an opportunity to fix Social Security, but time is running out, Investment News reports.
Pozen, a member of the White House Commission to Strengthen Social Security, discussed his plan to reform the system at the Discover 2006 conference in Denver. He says such reform will hinge on "political will," and he sees it as critical to President Bush's legacy.
Social Security is projected to go into the red by 2017 and will likely become insolvent by 2041. Pozen's proposed fix calls for adopting a "progressive indexing" formula, which is aimed at slowing the growth in benefits to middle- and higher-income wage earners.
Benefits to those earning under $25,000 a year at retirement would continue to be based on wages, but benefits to those earning $113,000 and above would be linked to a price indexing model, which rises slower than wages. Benefits to those in the middle would be based on a mix of wage and price indexing.
Pozen estimates the Social Security system has a $3.8 trillion deficit. He says his plan would cut that to $1.2 trillion over the long run. While he admits his proposal is toughest on higher-wage earners, he says it’s a better option than increasing taxes or raising the retirement age.