Bush says Social Security shortchanges black seniors

[jamesglewisf]

http://www.buffalonews.com/editorial/20050126/1063516.asp
WASHINGTON - Race became a significant factor in the debate over Social Security on Tuesday when President Bush told black leaders that the government retirement program shortchanged blacks, whose relatively shorter life span meant they paid more in payroll taxes than they eventually received in benefits.

Bush's comments came during a private White House meeting with 22 black religious and business leaders who backed his re-election last year - marking a new line of argument in the president's attempts to win support for adding worker-owned investment accounts to Social Security.

The conversation demonstrated the White House's determination to build on outreach efforts to blacks that proved effective in battleground states last year, adding Social Security to a list of moral issues - such as opposition to same-sex marriage and support for faith-based social programs - that Republicans see as providing common ground with black conservatives.
It makes nice headlines, but it doesn't wash. Everybody gets short-changed somehow.

They eliminated race as a factor to be used when underwriting life insurance many years ago. The same shorter life-span meant that blacks had to pay higher life insurance premiums. Why? If two people are going to receive the same $1,000 benefit, and one group is expected to live 60 years and the other group is expected to live 65 years, then the group that is expected to live a shorter time pays a higher premium for the same benefit.

When they eliminated race from the equation, it meant that whites ended up paying higher premiums to offset the lower premiums that blacks would pay.

The same thing happened when the women's rights groups started complaining about pension benefits. Women got lower monthly pension benefit checks because they were expected to live longer. Their total benefit was the same, but it was spread out over a longer period. They got the laws changed about pensions so that benefits would be calculated the same, but what they really did was raise women's benefits some and lower men's benefits. When the women's groups realized that they were paying lower life and car insurance premiums then males, they shut up. That's why there is still a difference in life, health, and auto premiums by sex.

Social Security, life insurance, health insurance, car and home insurance are all set up according to statistics. When you take the statistics out because of politics, then the programs don't really work the way they should. You quit paying your fair share.

If they are going to change Social Security to be different based upon race, then they need to do it for sex also. And then they need to change pension plans back to the way they were. Then they need to fix life insurance. If you want one program to be sound actuarially, then they should all be. Get the politics out of it.

[JacMac]

Bush is so dumb. His rationale just doesn't work. I don't care about average life spans when my mother died 2 days before her 62nd birthday. She didn't even GET social security...and she was a white female. There is no accurate prediction of how long someone could live when I have more friends who have already lost a parent and NONE of us are thirty and most of us are of different races. okay, breakdown: 1 black friend whose Dad died when he was 3. Two white friends both of which lost Dads (1 at 22, 1 at 24). Three white friends who lost Moms (1 at 17, 1 at 26, 1 at 28) a forth's mom is dying now, 1 chinese friend who mother is dying (he is 24). Bush should figure THAT into his statistics. He is SO ignorant - he puts politics into everything and everything into politics. Religion, Race....yadda yadda yadda...the man is just dumb; there is no way around it.

[theyeti]

I don't really know what to think about social security, I'm not really an economics person. One side says this and the other that and who I supposed to believe? I can tell though, that when we have to change the name of something to make it sound better (privatization --> personal accounts), it's probably not the best idea in the world to begin with.

I listened to Bush's press conference on the radio this morning and he sounded much more coherent than usual. Still didn't answer questions directly, and still managed to insult (http://americablog.blogspot.com/2005/01/transcript-of-bushs-senior-slur-is-now.html)an entire class of citizens, but coherent.

[jamesglewisf]

What JacMac?

Don't let your hatred of the man make you ignore the facts.

If the average life expectancy of a black person is 10 years less than a white person, then as a group, blacks will get less benefit. He wasn't talking about individual people. He was talking about millions of people. Bush was right.

[theyeti]

I think the problem with the race issue is the label we're assigning to it. African-Americans don't live (on average) less years because they're black; - as far as I know - a more likely explanation is socioeconomic factors like living in poverty, having larger families and higher stress levels, not receiving as good of an education, and so on. The way it sounds by just labeling it all as "black" makes it sound, well, racist, even though that's not the intention.

[jamesglewisf]

One more thing.

You don't have a Social Security account. There is no money tucked away with your name on it. It is a pay as you go system. That means that people who are paying now are paying for current retirees. The taxes collected when your mother worked paid for the benefits of people who were reitired when she was working. The SS taxes you are paying now are used to fund current retirees, not your retirement.

Social Security is a program that pays benefits to people who reach a certain age. If you don't reach that age, then you don't get any benefits. It is a benefit for living people.

[jamesglewisf]

I agree that it can sound racist, theyeti, but like you said, that is not the intent.

There was an article a few years back about the fact that even among people of the same socio-economic group, blacks had a higher mortality rate. The reason was because they were not as active users of medical care. This guy was leading a movement to counter that lack of use. The problem wasn't access to medical care but use of it.

Whatever the reason, the goal should be to improve the lot of our fellow man. If we see trends that can be addressed in particular groups, we should do it and not worry whether or not it sounds good.

[Justawoman]

We watched MadTv the other night and the black comedian on there was making a point with humor that he should not worry about SS because African Americans won't live long enough to collect especially the men. It was not a knock on the fact that this is a wrong statistic but something that is occurring.

And Jim is right about there not being an account somewhere with our name on it. We are not guaranteed Social Security. My mother gets 13 dollars a month. What a joke. She was better off setting up her own retirement account. She taught for 23 years and all she gets is 13 dollars because the system made a mistake and overpaid her and the SS department wants their money back. The whole social security system is a joke. You are better off investing in a 401K or putting your money somewhere else that will work for you.

And when my mother went the legal route to fight this ruling on her benefits they made the whole process so unbearable that she gave up. My husband and I are not banking on drawing Social Security. We are making plans for our retirement to come from somewhere else.

[JacMac]

One more thing.

You don't have a Social Security account. There is no money tucked away with your name on it. It is a pay as you go system. That means that people who are paying now are paying for current retirees. The taxes collected when your mother worked paid for the benefits of people who were reitired when she was working. The SS taxes you are paying now are used to fund current retirees, not your retirement.

Social Security is a program that pays benefits to people who reach a certain age. If you don't reach that age, then you don't get any benefits. It is a benefit for living people.


I completely understand that - that is why I'm saying she didn't even get to reap the benefits of a system she was forced to use. I just don't think that life span should be an issue. Yes I let my hatred of Bush get in the way of a lot of things and yes I am not well-read on the situation...but I don't think that the amount of money we receive should be based on an "average" life span. That to me, is just silly. I think the whole system should be redone and I completely agree that 401k/money markets/etc. are the way to go. I always have. I don't know the intricate details of how to change it, and I am simply speaking from my small little affected world....I see the "average" lifespan changing as time goes on. The environment is trashed and cancer is killing 1/3 of the people I know. I guess using past numbers as a foundation somewhat makes sense, but...well...I guess coming from a girl who had 1 grandmother and lost her and my mom in one year...I don't see many people reaching ages to receive retirement benefits so I don't have much to base it on. I don't care if they do away with social security so we can invest for ourselves, but who is going to care for those ON social security now since all of their prior investments were for the ones before them and not themselves?

[jamesglewisf]

Lifespans are increasing. Insurance companies went from using tables that topped out at 100 in 1980 to tables that top out at 120 now. The group of people you know is too small a sample to reflect reality. A person down the street might have a totally different experience. That's called anecdotal evidence.

If they made the decision today that no one 40 years old or younger would receive any SS benefits, then they would still have to keep taxing all current and future workers until the last person allowed to receive benefits was dead. That's how the program is paid for. So in other words, there is no way to allow people to opt out of SS taxes if they agree to opt out of future benefits. The best thing to do is to save your own money and count on taking care of yourself.

The people who figure all of this kind of stuff out are called actuaries. After completing college, usually a math or statistics degree, they spend an average of 7-10 years in self-study taking exams. There are basically 10 five-hour exams. It's like taking the CPA exam 10 times. It's all very scientific and complicated. My dad is an actuary.

[JacMac]

oh...I was an english major who knows nothing of math and finances. I planned on investing in my own retirement fund as soon as I can put food on my table and pay my bills (hopefully with the start of the business in 3 months). I don't know enough about it. I truly can't believe that lifespans are increasing! Although there is question of the area I live in as unhealthy environment due to Otis Airforce Base and the fact that Cape Cod sticks out and catches all the smog from NY as the winds carry it straight across us out to sea....I don't know...It baffles me to think that everywhere else on the planet lives are longer and where I live everyone dies before 70...strange. But I'll take your analytical word for it.

[Justawoman]

You ever watch the Today show? Willard Scott does that 100th birthday thing. There are always quite a few people who reach that mark and go beyond.

[JacMac]

Y'know...I've heard of it. But no, I never watch. I think the only time I've seen any of those shows I was home sick and truthfully, knock on wood, it doesn't happen very frequently. Basically since living here, I've usually had no less than two jobs; at one point last year I had 3 jobs and 2 volunteer jobs. Right now, it's only 2 and school.

I know the oldest person is like 120 or something but I thought that was on a farm in China where they eat all naturally, live away from smog and environmental hazards, and meditate everyday...If I did that I'm sure I'd live a long time too. Unfortunately, the stress of my everyday life causes me to lose years off my life, I'm sure! I wonder why my small group of people is so different. I am not kidding when I say that I know fewer people with alive parents and grandparents than I do vice versa. Bizarre, huh?

[jamesglewisf]

In 2001, life insurance companies began using new tables that go to age 120. The 80, 58, and 41 tables all stopped at age 100.

[JacMac]

I saw that in your original post. It's just boggling to me. Why doesn't anyone I know even make their 90's and other people are living to 120?

[jamesglewisf]

Sorry. I forgot I had already posted that. I thought I deleted it out. I wasn't being a smart alec.

[JacMac]

Is Alec really all that smart?


JUST KIDDING!!!

Hee hee hee...

[jamesglewisf]

Don't encourage him.

[ladyserenity]

I haven't posted here in awhile, but this just caught my eye. Like others, I admit I do let my hatred of Bush color my opinions. But then, he has lied to the American people so often it's easy to do.
As for social security.....I don't see it as being in a crisis at all. I see Bush's proposal as being just another way to benefit his big business cronies. If EVERYONE in the USA paid their fair share we wouldn't be having this conversation. There should not be an upper limit on income taxation for paying into the system, and ALL elected officials should have their income taxed for social security just as everyone else. But we know that isn't going to happen.