Obama's Social Security Plan: Some Will Pay More
July 7, 2008 - 7:33 PM
(CNSNews.com) - It's an election year, and the politicians are once again talking about Social Security.
"The American dream feels like it's slipping away," Sen. Barack Obama (D-Ill.) said on Sunday, because "it's harder for people to save and it's harder for people to retire."
Speaking to group of senior citizens in Gresham, Oregon, the man who expects to be the Democratic presidential nominee raised the thorny Social Security issue. He criticized the George Bush/John McCain plan and offered one of his own.
Obama wants higher earners to pay more into the system -- to "protect" senior citizens "who have earned the right to retire with dignity."
"A secure retirement is no longer a guarantee for the middle class," he said -- "because Washington is not working to preserve this fundamental part of the American dream."
Invoking "the promise that FDR made," Obama said that when he's president, he will "fight every single day" to protect Social Security, which is coming under increasing strain as more Baby Boomers retire.
First, Obama said he would "preserve the Social Security Trust Fund" -- by not spending money raised through payroll taxes on other things. He said he would make sure that "money that's coming in for Social Security stays for Social Security." (Al Gore proposed a similar "lock-box" policy when he was running for president.)
Unlike Sen. John McCain, Obama said he believes that privatizing Social Security is a "bad idea," and "I won't stand for it as president."
Last week, McCain said he would "fix" Social Security without reducing benefits to people approaching retirement. McCain's proposed reforms include "some form of personal retirement accounts in safe and reliable index funds," a plan modeled after the one available to government employees.
Obama said he would adjust the cap on payroll taxes "so that people like me who make more than $102,000 have to pay a little bit more, and the people who are in need are protected." He said his plan would include an adjustment so the change doesn't hit middle-class Americans who make "just a little bit over $102,000."
Obama also said he would eliminate income taxes on any retiree making less than 50,000 a year. "If your income is less than $50,000 a year, I don't think you should have to pay income tax on your Social Security. This would completely eliminate income taxes for 7 million seniors across the country and provide a savings of approx $1,400 per person each year."
Invoking the "outrage of CEOs cashing out while workers lose their pensions," Obama said he would put pension protection at the top of his priority list.
He complained about bankruptcy laws "that are more focused on protecting banks than on protecting pensions." As president, he said he would limit the circumstances under which retirement benefits can be cut -- and increase the wages and benefits that workers can claim in bankruptcy court.
Finally, Obama said he would encourage personal savings.
He favors "automatic workplace pensions," in which employers provide a direct deposit of a small percentage of each paycheck into a worker's account. "You can add to it or you can opt out of it at any time," he said, adding that "employers would have an easy opportunity to match workers' savings."
Obama said the message from President George Bush and Sen. John McCain is, "You're in this alone," whereas he believes "we're all in this together."
President Bush has been pressing for Social Security reform since his first presidential campaign in 2000, but congressional Democrats have rebuffed him again and again. (See earlier story).
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