Rubio: Open Congress' retirement to all workers

Plan includes higher retirement age for younger workers and lower Social Security checks for wealthy
Associated Press
May 13, 2014

Younger workers would face higher retirement ages and wealthier Americans would see their Social Security paychecks trail their less affluent neighbors under a plan proposed Tuesday by Sen. Marco Rubio.

Rubio, a first-term Republican senator from Florida who is outlining a policy agenda as he weighs a presidential bid, also proposed allowing all Americans to join federal retirement accounts. He vowed to protect benefits for older Americans but he added that changes were needed if the system is to survive.

"The Social Security trust fund is drying up," Rubio said, referring to money collected to pay certain benefits.

He said the safety net for retirees will run into debt in 2033 if changes are not made. "This is not a scare tactic. ... It is a mathematical certainty if things remain unchanged."

Democrats said the Rubio proposal is one similar to Republican Mitt Romney proposed when he unsuccessfully ran for president in 2012.

"Sen. Rubio's plan is just the latest example of the Republican Party's out-of-touch policies that benefit a few instead of extending opportunity for all," Democratic National Committee spokesman Michael Czin said.

Rubio is working to build his policy credentials after a bipartisan immigration plan he helped push through the Senate stalled in the House and caused a backlash from conservatives. Trying to shake that sting and looking ahead to an expected 2016 campaign, Rubio has turned to policy proposals on poverty, higher education and economic growth in recent speeches.

Rubio's retirement prescriptions come just days after he had a private audience with the Republican National Committee in Memphis, Tennessee, and made his first trip to early-nominating New Hampshire as a potential White House contender.

At the same time, Rubio has been bulking up his political team and working to help candidates on the ballots in 2014, including those in Iowa, which hosts the lead-off presidential caucuses.

Rubio's speech promised that his plan would not affect older Americans, with many of them nervous as they approach retirement. With so many retirees and those near retirement as constituents in senior-rich Florida, Rubio is mindful of their interests as he prepares for the national political stage.

"The answer is to gradually increase the retirement age for future retirees to account for the rise in life expectancy," Rubio said.

Rubio did not specify a new retirement age.

He also said wealthier Americans rely less on Social Security than poorer Americans and could deal with their payments growing less quickly. "This isn't a cut. It is simply a reduction in how fast the benefit will increase," Rubio said.

"Social Security was never designed to be the sole source of retirement income," he said.

Rubio's proposal would make the federal retirement program that Congress uses available beyond government employees. His proposal would make it easier for workers whose employers don't offer retirement plans, such as 401(k)s and other investment programs. Rubio says his proposals would make it easier for lower- and middle-class voters to plan for their older years.

Specifically, Rubio called for opening the federal Thrift Savings Plan to all Americans. The program, which currently covers more than 4 million civilian and uniformed government workers, has more than $350 billion in its accounts.

But unlike private accounts, the Thrift Savings Plan has lower costs for fund management and is exempt from many regulations commercial programs must follow.

"Opening Congress' retirement plan to the American people will allow us to bring the prospect of a secure, comfortable and independent retirement into the reach of millions of people," Rubio said.

But Rubio's plan would also increase the retirement age for younger workers — who are expected to live longer — while protecting those aged 55 and over. Older workers could still expect to retire as they had planned.

His plan would also suspend the Social Security payroll taxes on those aged 65 or older who continue to work. That move could help him appeal to older workers of all types who choose to stay on the job after they are eligible to receive retirement benefits.

"These seniors have already paid their fair share, and we shouldn't punish them for choosing to keep working rather than immediately cashing in," Rubio said.

 

Comments

Bluto

Lead balloon .

cookie1

The government owes social security $2.7 TRILLION dollars. If the government would pay back what they owe to social security it just might be back to operating in the black. The government should also STOP borrowing from it for anything other than what it was intended for. It is NOT a slush fund for government nonsense.

downthemiddle

LBJ opened the piggy bank. Decades ago... to pay for the Great Society... not so great eh?

The Hero Zone's picture
The Hero Zone

This is probably one of the most sterile, canned responses I have read: "Sen. Rubio's plan is just the latest example of the Republican Party's out-of-touch policies that benefit a few instead of extending opportunity for all," Democratic National Committee spokesman Michael Czin said.

Did he just reach into a hat of "Things to Say" without even attempting to listen to or understand any of this? Don't get me wrong, I gagged when Sen. Rubio used "middle class" and "fair share" but what he proposes doesn't even do anything the above response states. Did a reporter wake him up at his desk and he just burped out something when he heard a Republican was attempting to do something?

Of course Republican spokespeople have knee-jerk, propagandist responses to things, too. Which is really sad because everyone just tickles an issue and doesn't actually delve into it. The math Sen. Rubio quotes is correct and it isn't just a scare tactic, but what he is proposing to fix it doesn't, in my opinion, do anything like that.

Social Security: I'm dying.

Senator Rubio: What a shame, we need to do something. What's wrong?

SS: I've been bleeding out for too long and have been abused. Too much has been asked of me and taken from me. I can't operate like this.

SR: Shucks howdy, let's fix that. What do you say we do the same thing...but different!

SS: What are you talking about?

SR: Well I won't actually fix what's wrong with you but I'll give you a puppy you can hold while you die. Look how cute it is, doesn't companionship make you feel at ease?

SS: So you won't actually stop what's happening to me?

SR: What do I look like, someone who would dare to slap the hand in the cookie jar?

SS: That cookie jar is MY GUTS and YOUR MONEY you paid into me! *coughhackwheeze*

SR: Yeah. Sorry. You're the "third rail of politics". Actually we all just need you to hurry up and die so we can fight over your corpse and flex our political-peens in front of the nation. Shhh, shhh, just hold this puppy and go to sleep.

SS: ...

SS: I swear I will haunt you. I'll haunt you all. You did this to me! All of you! *blarg*

Einfach genug III

Spot on.!

Bluto

Rubio better watch out . He might just end up pissing both Repub and Dem voters off ; )))

Contango

Re: "The Social Security trust fund is drying up,"

1. There isn't any TRUST FUND! It's a fiction.

They are IOUs composed of non-marketable securities that can only be redeemed by the U.S. Treasury Dept.

2. So part of the senator's solution is to make the Millennials pay into the system longer and then hope that they die sooner by extending benefit age?

Privatize SS and let the Millennials (and everyone else) control their own accounts.

See: Chile as an example.

"Yes, Chile's Private Pension Model Works, Big Time":

http://news.investors.com/ibd-ed...

"As we know, there's a lot of people walking around talking about how the U.S. government debt is $17 trillion dollars. I wish it was $17 trillion. It’s actually $205 trillion if you add in these liabilities (Medicare, Medicaid and SS)."

- Stanley Druckenmiller

http://www.realclearpolitics.com...

samiam

Remove the earnings cap on which social security tax is paid. It won't solve the problem but it would help.

Contango

Re: "Remove the earnings cap"

That would certainly help kill incentive when some like in CA would be paying close to 70% of their income in local, state and fed taxes plus SS and Medicare "contributions."

And if one is self-employed, one gets to pay 15% - BOTH the employer and employee portion of the tax.

SS started out as a tax only on the wealthy. The Democrats saw it as a revenue source. They lied.

Babo

We should eliminate all government pension systems and roll all funds into social security. You can bet it would be funded.

KURTje

This guy is Alan West like. Florida? Bet the oldsters there "like" him.

downthemiddle

EVERYBODY should like Alan West... he simply wants every American to have a chance to work and contribute to society.

ohioengineer

I feel like a broken record, but one more time. Social Security is a prime example of all the bad things that can and will happen when government tries to do things that should be left to private individuals. The average American works for 45 years and then lives another 20 years or so after retirement; therefore common sense would dictate that during the earning years one should save accordingly for the retirement years. This is not rocket science.

But instead of saving for retirement many people spend every dollar they earn and then some. Enter Big Brother who says I will "force" you to save with a program called Social Security. Now if Social Security were a true savings program, there would be no issue. But instead it is just another way for government to transfer wealth from one portion of the population to another (and buy votes in the process). So in the resulting feeding frenzy of course the program is going to go broke - again, not exactly rocket science.

The solution? There is none. There is no way to fix Social Security, because politicians are never going to let go of the dollars and power that it generates. Senator Rubio's latest "fix" is just an attempt to buy some votes. When will Republican's learn that they cannot win elections by running as pseudo Democrats?

The Hero Zone's picture
The Hero Zone

A golf clap to you good sir/madame. This is true. Neither major party actually wants to address this issue even though the nonpartisan actuaries have given us a time limit. The only ones who are proposing an actual way to fix it would be Libertarians (well, through the Cato Institute) who want a model similar to Chile's as Contango posted above.

It's B.S. and when you get canned answers like the Democratic one above I can only imagine how they must want to hold down peoples' futures they accuse Republicans of doing. Sen. Rubio is offering a Band-Aid to cover a compound fracture. Yeah it helps a bit but doesn't address the shattered bone protruding through our skin. Meanwhile the Democrats want to have "MyRA" which is a program that - surprise, surprise - will force people to buy public debt as the sole means to fund their retirement accounts outside of Social Security. SS of course also being forced consumption of private debt only by the Federal Reserve. Now they can hawk their bad debt on the population directly! YAY!

downthemiddle

MyRa is an obama scheme to nationalize your 401k.

Your money goes into a pot along with everybody else's and everybody shares equally every month.

Remember.. redistribution of wealth is Obama's goal.
This would be a pretty effective method.

Also, Biden has stated that the dems want ZERO money passed on to children at death... making the death tax 100%.
No more inheritances of any size.