RE: Doesn't Kolbe-Stenholm cut benefits 45%?

[National Dialogue Moderator <moderator>]

A couple of quick points in response to Mr. Johnson's comments.

1. Comparing the benefits under any reform plan to the unfunded
benefit promises int the current system that is extremely misleading.
The current system cannot afford to meet the promises under current
law, that is the root of the problem.  Mr. Johnson's own numbers
point that out.  The current system will cost more than 19% at the
end of the 75 year period.  How does Mr. Johnson expect a system
that is collecting revenues equal to 12.4% of payroll to pay benefits
equal to 19% of payroll? That is a tremendous shortfall -- 
approximately $250 billion in current dollars -- that will have 
to come from somewhere.  Unless Mr. Johnson can tell us where 
he would propose to come up with the money to make up the difference
between the revenues going into the system and the costs of 
funding the promised benefits, it is not a fair to compare the
benefits that we can fund under our plan with the unfunded promises
of current law.

2. The Social Security Administration Actuaries and the non-partisan
Congressional Research Service have analyzed our plan under
conservative assumptions about the returns of individual accounts
and found that virtually all future retirees will have greater 
total retirement income under our plan that current law can
actually deliver.

3. The reductions in traditional Social Security benefits are 
targeted at higher income workers who will benefit more from 
individual accounts and are in a better position to provide
additional savings for their own retirement.  As I have mentioned
earlier, lower income workers would actually recieve a higher
Social Security benefit under our plan than they would under 
current law because of our minimum benefit provision, with any
income from their individual account being icing on the cake.

4. Finally, I would also point out that we have revised our plan 
from the proposal we put forward last year to soften some of the 
tougher provisions of our bill, so the information cited by 
Mr. Johnson is somewhat outdated.

Congressman Charlie Stenholm