Cheney touts changes to retirement plan

By  On  March 25th, 2005

BATTLE CREEK (AP) — A day after the release of a new report by the trustees who oversee Social Security, Vice President Dick Cheney traveled to Michigan to tout the Bush administration’s plan to reform the government retirement program.During a town hall-style meeting attended by several hundred people, including many seniors, Cheney said yesterday the changes proposed by President Bush would not affect current retirees or those about to retire. Instead, they would affect people born in 1950 or later.“They’re the ones whose benefits are in jeopardy if we don’t address this problem long term,” Cheney said during the hour-long event at Kellogg Community College.Congressional Democrats, meanwhile, are spending time in their districts, trying to rally grass-roots opposition to Bush’s proposed changes. They have accused Bush of seeking to privatize the program and pay for it by cutting benefits.The trustees’ annual report says Social Security will begin paying out more in benefits than it receives in payroll taxes in 2017. At that point, the government will have to increase its borrowing on financial markets, raise taxes or divert money from other government programs to sustain Social Security at current levels.The trustees also estimate that the program, which is about to be inundated with baby boom retirees, will go broke in 2041. They say that is the date when the $1.6 trillion accumulated in trust accounts from excess payroll taxes over past decades will dwindle to zero from sending out monthly benefit checks.In their previous forecast, the trustees estimated that each of those events would occur a year later than is now predicted.“The problem is, we have promised a level of benefits in the future that we’ve not funded,” Cheney said. “We’ve, in effect, said to the future generations: `You can anticipate benefit levels of a certain size, but we’ve never made the decision about how we’re going to pay for those.’”Social Security provides retirement benefits to more than 47 million Americans, including about 1.7 million Michigan beneficiaries.Some Republicans in Michigan’s congressional delegation have expressed reservations about Bush’s plan to divert a portion of Social Security taxes to create voluntary personal retirement accounts for younger workers. Some also have concerns about how to pay for the overhaul.Cheney likened the proposal to the 401k-style Thrift Savings Plan available to federal and postal employees hired after 1983. He said that program has worked well.“There’s a lot of evidence there for anybody who wants to look at it and see how it works,” he said.Cheney was joined on stage by U.S. Rep. Joe Schwarz (R-Battle Creek), who said he and the White House have “some disagreements on how we get there” when it comes to Social Security reform.Schwarz said Wednesday he was not convinced that allowing personal retirement accounts will help solve the problem.Democratic Gov. Jennifer Granholm said in a statement that Bush’s proposal would increase the national debt and weaken Social Security by diverting money from the trust fund to pay for private accounts.“While we should work together to make some adjustments to ensure the vitality of the program, President Bush’s plan to carve out private accounts will dangerously weaken Social Security and create trillions of dollars of new debt for the nation,” Granholm said.During a question-and-answer session with audience members, the vice president was asked what he thought about taking the entire Social Security trust fund and allowing the federal government to invest it in the stock market, in an attempt to improve its current annual rate of return of approximately 1.3 percent.Cheney said he would oppose such a plan.“There’s a lot of resistance to the notion that the federal government own that big a piece of the stock market,” he said.After the event, Battle Creek resident Rolf Heubel, a 47-year-old Democrat, said Cheney did not say anything that would sway him to support the president’s proposed reforms.Heubel also said the government should stop borrowing money set aside for Social Security to pay for everything from the Iraq war to Bush’s tax cuts.“We can’t afford to do that anymore,” he said.Outside the auditorium where Cheney spoke, two men protesting the president’s plan held a large banner that read, “Defend Social Security, Privatization Is A Scam.”

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