Democrat Bob Kerrey now has a 10 point plan (see below) to fix social security.
Republican Deb Fischer has a five point plan (see below) to fix the budget.
It’s a numbers game that finds the U.S. Senate hopefuls at odds and refusing to budge.
Nebraska Watchdog’s Joe Jordan looks at both sides in this exclusive video report.
The Kerrey Plan to Preserve Social Security
I became a candidate for Senate because I believe I can contribute to a bi-partisan Congressional agreement that will put our country on a sustainable path to balance our budget. Nothing will do more to improve consumer, business and investor confidence. I know how to do this; I have done it before.
The most difficult part for both Democrats and Republicans is reforming and reducing the out year costs of Federal entitlement spending. Along with Senator Jack Danforth I focused on this in the 1990’s and the problem has only gotten worse.
Almost everyone who has studied this will tell you that Social Security is the easiest to fix. Unfortunately, Congress has been avoiding even this. Democrats in particular must lead on this one. I am prepared to do just that.
There is no way around the fact that if we do not reform Social Security this program soon we will not be able to protect Americans under the age of 40. They will suffer a substantial cut in their benefits or their children will suffer a substantial increase in their payroll taxes. Already, the system pays out in benefits more than it is collecting in revenues. If we do nothing, the economic security of millions of Americans will be at risk.If nothing is done, the Trustees of the Social Security funds predict the trust fund will be depleted as early as 2027.
Clearly, the “Do Nothing” approach does not protect Americans. The Kerrey Plan to preserve Social Security is an honest, forthright plan that follows in the footsteps of the Simpson-Bowles proposal to protect Social Security. The plan will secure the financial stability of Social Security for at least the next 75 years, and possibly longer.
The Kerrey Plan will preserve and protect the dignity of Social Security beneficiaries those who are eligible today and those who will be eligible in the future.
1. Combine the funds
The common sense approach reform starts with combining the Old-Age & Survivor Insurance (OASI) and Disability Insurance (DI) trust funds. Acting to combine the funds will help ensure the longevity of both programs. In conjunction with the other proposed changes, the merger will ensure that the funds are extended beyond the Trustees current projections.
2. Set a “floor” for benefits to protect low income workers
The special minimum benefit was designed to create a floor in two kinds of situations: 1) when workers had worked only a few years and 2) when the special minimum benefit was larger than that calculated by the normal benefit formula. This protection is essential to protect low-income workers. Currently, the special minimum benefit is reaching fewer workers because the Special benefits are indexed to price inflation and Social Security benefits are indexed to wage inflation (wage inflation has been higher than price inflation). To maintain the minimum benefit at a constant ratio to average living standards, the Kerrey Plan would link the minimum benefit to wage inflation.
3.Index the date at which normal old age benefits are paid
People are living longer and are working more years. In order to provide a proper balance between the number of years in the workforce and the number of years in retirement, it is essential that the retirement age and the early retirement age be indexed. The Kerrey plan supports indexing the early and normal eligibility age. Phasing in this change will result in the eligibility age reaching 69 in year 2075.
4. Create a “bump” for the very old and long term disabled
People are living longer and this fact is a serious concern for the very old or long-term disabled that have outlived their personal savings. The Kerrey Plan supports creating a 5% benefits bump for the eldest population and long-term disabled. The bump would be phased in after 20 years after a recipient becomes eligible (1% increase in benefits per year for 5 years). The bump creates a realistic protection for our most vulnerable populations.
5. Create a hardship exemption
In order to make indexing the retirement age feasible, it is necessary to provide those unable to work with the appropriate protection. The Kerrey Plan supports creating a hardship exemption for beneficiaries who are unable to continue working beyond the current retirement age, but who are not qualified for disability benefits. This exemption would allow those that meet the hardship requirement to collect benefits at age 62, exempting these beneficiaries from the indexed age proposal.
6. Restore the amount of contributions to the system
In order to improve the solvency of the Social Security system, it is essential that more wages be subject to the payroll tax. The percent of wages taxed has decreased from 90% in the 1990’s to 83% in 2010. This is because the taxable maximum wage cap (currently $106,800) has not increased in line with wages. The Kerrey Plan supports restoring the taxable maximum gradually to cover 90% of wages by 2050.
We cannot sustain a system that protects the highest incomes while burdening the lower and middle classes. Under the Kerrey Plan, high-income earners’ contributions to the Social Security system will gradually be restored to the 90% level so that all recipients are paying their fair share instead of relying on contributors who make less money.
7. Slow the growth of benefits spending
The adoption of a chained CPI has been a part of nearly every bi-partisan effort to reform Social Security in recent years. The change to chained CPI from standard CPI is essential to Social Security reform because the impact does not focus on making cuts to Social Security; rather, the focus is on slowing the growth of spending that is directly attributed to the rate of inflation. Our current formula overstates inflation and as a direct result, cost of living adjustments are often inaccurate.
8. Streamline the amount of benefits paid out
The Kerrey Plan supports moving from a three to four income bracket system in order to help slow future benefit growth while still ensuring that future beneficiaries receive adequate inflation-adjusted benefits. This proposal would add an additional income bracket in which a percentage of benefits will be paid out. Gradually, the income brackets will set a return for benefits at levels four percentage levels: 90%, 30%, 10% and 5% (the current benefit rates are 90%, 32%, and 15%). This will slow future benefit growth amongst the higher earners. Streamlining the amount of benefits paid out is key to ensuring that the system remains solvent. Additionally, by continuing to use a wage-index to set the income brackets, future beneficiaries will continue to receive larger, inflation-adjusted benefits than equivalent beneficiaries receive under the current three-bracket system.
9. Add state and local employees to the system
While over 90% of workers are covered by Social Security, some states and local workers are excluded from Social Security and are covered by separate retirement systems. As states and localities face economic hardships, this model presents more risk for both the sponsors and the beneficiaries and could create the need for a future economic bailout. While the Kerrey Plan would not change benefits to those currently contributing to these separate retirement systems, the plan would include all new state and local government hires in the Social Security system beginning in 2020. The Kerrey Plan would ensure that the Social Security system is funded and that beneficiary funds are protected.
10. End the fraud and abuse that plague our disability program
Finally, it is essential to address the fraud and abuse that is plaguing our Disability Insurance system. Overpayments in 2010 totaled $1.4 billion, which is a dramatic increase from 2001 when the reported overpayments totaled $860 million. The total disability overpayment debt is currently $5.4 billion. It is essential to address payments to able-bodied young persons who should be returning to work instead of drawing on disability payments.
The Kerrey Plan to stabilize Social Security is an articulate 10-point plan that requires bi-partisan action. This plan requires Americans to contribute to ensuring the solvency of the system. The result is that Social Security is sustained for at least 75 years, current beneficiaries are provided for, and our youngest generation is protected.
Deb Fischer Releases Policy Plan to Reduce the Size and Scope of the Federal Government
Lincoln, NE - Today, Senator Deb Fischer, a Republican candidate for U.S. Senate, announced her plan to reduce the size of the federal government and it more efficient.
“The constant gridlock in Congress has led to a shift of power to the federal bureaucracy. This shift has allowed the Obama Administration to grow the size and power of the bureaucratic regime in unprecedented leaps and bounds,” said Senator Fischer.
The federal government has become so far-reaching that it is suffocating businesses and individual freedoms in this country. Action must be taken immediately to begin to cut back on the ever-growing bureaucracy and its expanding influence on every aspect of our lives. Congress must reassert its oversight authority and bring more transparency to the process,” said Fischer.
As a U.S. Senator, I will make the tough decisions necessary to dramatically reduce the size and scope of the federal government. In my plan, I have listed my initial priorities to take those first steps toward streamlining the federal government,” said Fischer.
Senator Fischer’s five-point plan is listed below.
1. Pass a Balanced Budget Amendment. Once a Balanced Budget Amendment is in place, Congress will be forced to set priorities for government. I believe the first priority of the federal government is national security. Until Congress balances the budget, everything else should be one the table.
2. Repeal Obamacare, the Dodd-Frank Financial Bill and No Child Left Behind. These three bills must be repealed to relieve the American public of unnecessary government involvement that has or will hinder our recovery and growth as a nation.
3. Eliminate Ineffective and Duplicative Programs and Agencies. Congress spends millions of dollars funding excessive and duplicative programs every year. For example, the federal government funds more than 44 job training programs costing $30 billion, administered by nine different federal agencies. This is unacceptable. We should also begin to eliminate ineffective agencies, such as the Federal Highway Administration. We have to begin to significantly downsize government, making reductions in every department and agency.
4. Implement a Process for Congressional Oversight of Regulations. When I was elected to the Unicameral, my first priority bill put in place a process by which the public could challenge a rule or regulation implemented by a state agency. I believe a similar process needs to be enacted at the federal level. For example, Congress should have approval authority over any regulation that has a certain economic impact.
5. Audit the Federal Reserve. The Federal Reserve sets the monetary ppolicy of the United States. This agency may be one of the most powerful federal agencies and it is one of the least accountable
State Senator Deb Fisher has signed the Grover Norquist pledge never to raise taxes. Thus, it will not be possible for her to participate in finding a solution to the problem of Social Security financing or putting together an agreement that puts our nation on a sustainable path to balance our budget.
From my experience participating in the successful effort to balance the budget in the 1990’s both Republicans and Democrats are going to have to make very difficult and in the short term unpopular choices. As a fiscally conservative Democrat, I believe I can contribute to getting this done by leading on the most difficult of all: Federal entitlements.