John Boehner Steps On The Third Rail

The House GOP Leader is proposing that we get serious about Social Security reform.

House Minority Leader John Boehner suggested in an interview today that the Social Security retirement age should be raised:

He said he’d favor increasing the Social Security retirement age to 70 for people who have at least 20 years until retirement, tying cost-of-living increases to the consumer price index rather than wage inflation and limiting payments to those who need them.

“We need to look at the American people and explain to them that we’re broke,” Boehner said. “If you have substantial non-Social Security income while you’re retired, why are we paying you at a time when we’re broke? We just need to be honest with people.”

Boehner also proposed other changes to the Social Security System in this video:

Raising the retirement age and means testing are perhaps the two most controversial reform ideas that have been circulated in recent years, with the possibly exception of the private accounts that President Bush proposed, and then abandoned in the face of the first signs of political opposition, something that has happened to nearly every attempt to reform Social Security since it’s inception. Politically, it’s long been known as the third rail of American politics.

While I would personally prefer a move toward private accounts for younger workers, these both good ideas, for a start It will be interesting to see how they’re received, and whether Boehner and the Republicans will attempt to follow through on them should they regain the majority in November, and how quickly it will take the Democrats to start accusing Boehner of targeting the elderly. Oh wait, not long at all.

FILED UNDER: Economics and Business, Social Security, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. john personna says:

    I think all our oxen would be gored by this one.

    But my main concern was the implication that “private accounts for younger workers” would somehow take government off the hook. All the stats I’ve seen show that Americans both under-save and invest their funds appallingly. If we institute private accounts, it just means that some large number of private accounts will come up empty by retirement age. Then, government will need to step in, with a form of welfare as last resort. It’s not a pretty picture.

    “Nearly half, or 47 percent, of those on the verge of retirement are predicted to run out of money,” said Jack VanDerhei, research director for the Washington-based Employee Benefit Research Institute. “They won’t be able to cover their basic expenses and uninsured health care costs.” EBRI has a database of 24 million 401(k) participants and 20 million IRA accounts.

    http://www.businessweek.com/news/2010-06-11/lawmakers-seek-to-prevent-americans-outliving-savings-update1-.html

  2. Franklin says:

    Boehner’s showing some backbone.

    With some exceptions for hard laborers, I completely agree with raising the retirement age. I’ll withhold judgment on the other ideas for now.

  3. john personna says:

    More data:

    For the twenty years ending 12/31/2008 the S&P 500 Index averaged 8.35% a year. A pretty attractive historical return. The average equity fund investor earned a market return of only 1.87%.

    http://moneyover55.about.com/od/howtoinvest/a/averageinvestor.htm

  4. Pete says:

    Let’s all put our heads in the sand and hope Hollywood has an answer. There is pain to come and adults accept it now rather than later.

  5. Brummagem Joe says:

    Good luck with this one. And of course the Dems now have a lovely trove of material for their ads in the fall. I think Republicans deeply underestimate how many hostages to fortune like this one they have delivered to camera. The list is endless and believe me they are going to provide 90% of the raw material for that intense burst of advertising that starts in late August and runs for the next 80-90 days when everyone is focussed on the election and Dems ask “do you really want to turn the govt over to these guys”.

  6. Brummagem Joe says:

    “While I would personally prefer a move toward private accounts for younger workers, these both good ideas,”

    ……with all due respect Doug, you have to be joking. The whole 401k program has been a bit of a disaster because most ordinary people don’t have a clue of how to manage a portfolio and if you had the misfortune to retire in 2009 or 2002 as many had to involuntarily you were screwed. When the social security privatization campaign was at it’s height there were some incredible numbers floating around showing just how dependant Americans are on SS. As best I recall for 80% of SS recipients their SS payments represented half or more of their income, for 50% of SS recipients it was 100% if their income. There’s a reason it’s the third rail and the notion that younger Americans are more financially literate than their parents is baloney.

  7. Michael Reynolds says:

    Good for Boehner at least discussing a rise in retirement age. It’s a start. Private accounts is not a start, it’s planting the seeds for the great government bailout of the future. But I admire anyone who is willing to broach the subject publicly, so (words I never thought I’d type) kudos to John I-Am-Curious-Orange Boehner.

  8. tom p says:

    ***But I admire anyone who is willing to broach the subject publicly, so (words I never thought I’d type) kudos to John I-Am-Curious-Orange Boehner.***

    There is nothing I like about John Boehner (least of al his lies about what a deficit hawk he is) but this is a curious turn of honesty for him and I will give credit where credit is due:

    A hat tip JB.

  9. tom p says:

    PS

    ***It will be interesting to see how they’re received, and whether Boehner and the Republicans will attempt to follow through on them should they regain the majority in November,***

    Why should they wait until they get a majority? Push it now, push it after the elections, push it always.

    When is the time for the truth?

  10. Private accounts will never happen. I’ll repeat what I said in Google Reader earlier today:

    If they would just tie it to the CPI rather than real wages (what they called “wage inflation”) it would save tons of money over the long run. As currently designed it gets more expensive with each generation to help raise the elderly out of poverty. Now that they’re the richest demographic in the country, it’s past time to do this.

  11. anjin-san says:

    I can live with 70 as a retirement age when one can begin to collect benefits. One condition, same thing goes for every government employee, including members of congress.

  12. Michael says:

    Fine just give me my money back from the “trust fund” and I’ll be fine in retirement.

  13. john personna says:

    I’d believe you more, Michael, if you said “DON’T give me back my money … and I’ll be fine.”

    That would tell me that you’d done the prudent thing, and already built an external retirement “fund” for the SS that might not be there.

  14. wr says:

    Boehner is “getting serious” about the one thing Republicans really care about — gutting the social safety net so that the rich can pay even less taxes. All these “deficit hawks,” and not one of them can bring themselves to change the absurdity in the tax code that allows multi-billionaires to pay half the tax rate of school teachers. But as long as old folks suffer in poverty, that’s a good thing.

  15. Brummagem Joe says:

    Michael says:
    Wednesday, June 30, 2010 at 10:15
    “Fine just give me my money back from the “trust fund” and I’ll be fine in retirement”

    …….actually you almost certainly wouldn’t unless you’re in the top 20% of income earners….sit down figure out how much you’ve contributed and/or will contribute and add up how much you’ll collect assuming you live to 80…..then add up how much you will have in any private sources of income by the time you’re 65…..sure if you’re in the top 10-20% of income earners you’re probably going to be ok but otherwise you will be completely dependant on SS just as 80% of Americans are today.