BUSH'S SOCIAL SECURITY PLAN

President Bush had a very long press conference recently where he again pushed his plan for allowing private retirement savings accounts within the Social Security System. In a nut shell, a wage earner can elect to divert part of his Social Security wage deduction into a private fund that the wage earner could control, i.e. invest in his choice of investment products.

What would the Bush plan do for the Social Security System. Bush says the system is in trouble. How would his proposal get the Social Security System out of trouble. Well, by his own admission, it would do nothing to save the SS System. In fact, it would actually hurt it by diverting funds out of the system. So why is he pushing it? I can only speculate because no one has come up with a valid reason.

If we look at the Chile plan which included private retirement accounts, we now know that the system failed because the workers opting for the plan did not realize the great amount of retirement money that would go to plan brokers as commissions. The UK had a similar experience. So is that what Bush wants - make Wall Street billions in commissions? Maybe.

Workers today can join a 401(k) plan at work which takes pre-tax money and invests it according to the worker's wishes. Workers can also contribute to IRA (Individual Retirement Accounts) if they have no pension plans at work. The money contributed to these IRA accounts can then be deducted from one's taxes. Even if you have a 401(k) at work, you still can contribute to an IRA account. You cannot deduct the contribution from your taxes but the interest that investment makes is tax free until you start using it at retirement.

With these retirement options, why is Bush pushing another option; one that can hurt the Social Security System for millions of retirees.

Our Social Security System means one thing to our workers: a guaranteed retirement plan. They can count on that money when they retire come hell or high water. It is automatic. It is not a lot but it comes every month.

This plan cannot just go on forever. Adjustments have to be made. Retirees are healthier and living longer therefore collecting benefits longer. As baby boomers retire, there will be less younger workers to support the retirees. What this means is that more money will be going out than coming in. Once that starts happening it is only a matter of time before the money runs out.

One thing to remember; Social Security is NOT in any imminent danger of collapse. Economists say we can keep going without any changes till about the year 2052. That is a long time from now.

Adjustments made today can extend that trouble free period much longer. One adjustment has already been implemented - raising the retirement age. Since we are healthier and live longer, this makes a lot of sense.

Another adjustment is to raise the cap on wages that can be taxed. Right now the limit is $90,000. Why not increase that gradually to say $120,000 or more. I would not increase the actual tax rate since I feel it is high enough right now.

Bush is starting to favor a plan where SS benefits will be determined based on a person's wealth - the richer, the less SS benefits you are going to get. Well I think that is a bunch of bullshit. A person pays into the system all his or her life only to see their contributions go to someone else? No way. I want what is rightfully mine and that is not greed, it is fairness.

I urge all voters to contact their elected representatives to tell them to make sure Bush does not tamper with the Social Security System. His motives are very suspect. He needs money for his IRAQ war and he is willing to do basically anything to get it.

Janusz