President Bush has released more details about how his plan to privatize Social Security would work. It is now clear that his plan would make deep cuts in Social Security benefits for everyone making more than $20,000 a year while working - affecting 70 percent or more of all future retirees.
Specifically, Bush's privatization proposal would slash Social Security benefits for all middle and higher income workers by switching from wage to price indexing in the way benefits are calculated. In addition, Bush's proposal would also impose a privatization tax on all workers who elect private accounts, reducing their Social Security benefits by an additional amount equal to the monies contributed to their private account plus interest.
The net result of this double whammy is that most workers would see an enormous reduction in their Social Security benefits.
--Ron Gettelfinger, President
UAW International
30