Investment Accounts Under Social Security Causing Bush Some Problems
It seems likely that President George W. Bush next year will not be pushing his plan to partially privatize the Social Security system, allowing some members retirement accounts that let them invest in the stock market.
The president’s Commission to Strengthen Social Security has tentatively concluded that personal accounts are doable at a reasonable cost and without fouling up the system. The commission met yesterday and was to issue its final report, so we can’t tell you what the commission recommended; we’ll do that next week.
But the panel wasn’t expected to come out with a single plan because there are indications that private account participants as well as members who do not opt for those accounts will find their benefits reduced.
The possibility that the commission will recommend any plan which requires benefits to be reduced has alarmed many Republicans on Capital Hill who fear this unpopular step could hurt the party in next year’s Congressional elections. These GOP fears are reaching Bush’s ears, according to reports out of Washington, causing the president to think twice about trying to get the commission’s recommendations enacted into law next year.
The whole situation has placed the president in an embarrassing situation. He is committed to Social Security reform and will find not mentioning the program during the campaign season difficult, especially since Democrats will try to take advantage of the president’s predicament by making a lot of noise about reforming the system.
DRUG DISCOUNT CARDS: Another embarrassment for the president regarding seniors is his inability to issue drug discount cards that could save seniors money on their prescription drug purchases. The president had hoped the new cards would start being distributed by January 1, 2002.
However, when the president announced the drug savings program last July, a federal judge issued a ruling that the president couldn’t start the program because he had created the program without legal authority or the required public discussion period.
In November, Medicare started the public discussion period, which is expected to take three to six months before being concluded. But there’s still the question about the overall legality of the president’s action, so despite Medicare taking steps to comply with the judge’s ruling, there’s still a cloud over the president’s well-meant effort.
Amid all these doubts about the program, there was a bit of good news recently when the Swiss drug company Novartis announced that it would soon start offering discounts on its own products to low-income seniors.
GOOD NEWS: Under the law enacted earlier this year to stimulate the economy, under which taxpayers received a check from the government and tax rates were reduced, people 50 and over will get a major new opportunity to save more for their retirement.
Starting January 1, people in that age category will get the chance to contribute larger amounts annually to their IRAs and 401 (k) plans. IRA contribution limits will increase from the current $2,000 to $3,500 and the 401(k) limit will go from the present $10,500 to $12,000. The limits will continue to rise through 2006, at which time the IRA limit will be $5,000 and the 401(k) limit will be $20,000 per year.
Those contributions are untaxed income when made, but taxed when withdrawn in the future.
VFW POST SEEKS NEW MEMBERS: Joseph Stewart, commander of Long Island City Post 2348, Veterans of Foreign Wars, says the post is looking for new members. If interested, call (718) 728-6220 or (718) 707-3133, or visit the post at 31-35 41st St.
MEETING: When AARP Chapter number 2889 meets next Wednesday, Dec. 19, the holiday music will be performed by Steve Tuchman. The meeting will be held at the First Presbyterian Church of Newtown, 54-05 Seabury St., Elmhurst, starting at 12:30 p.m. New members are welcome.