Republicans and lobbyists close to President  Bush have reported that the White House will propose changing the formula for establishing initial Social Security benefit levels in order to cut guaranteed expenditures on future retirees, according to today's ''Washington Post'' . The Social Security Administration would no longer use the increase in wages over a worker’s lifetime to calculate retirees’ first-year benefits but would use inflation rates instead. The new “price indexing” formula will reduce individual benefits and overall Social Security outlays because the inflation rate typically is much lower than the rise in wages. The full impact of the change will be felt in the middle of the century. Rother points out that Social Security benefits, which currently equal 42 percent of the earnings of an average worker retiring at age 65, would be reduced to 20\% of pre-retirement earnings for future retirees, thus potentially freezing retirees into today’s standard of living. However, Rother says that price indexing has to be linked to Bush’s private investment accounts as income from the accounts give retirees the chance to make up the shortfalls. References Category:January 4, 2005 Category:Politics and conflicts Category:United States
Republicans and lobbyists close to President George W. Bush have reported that the White House will propose changing the formula for establishing initial Social Security benefit levels in order to cut guaranteed expenditures on future retirees, according to today's Washington Post . The Social Security Administration would no longer use the increase in wages over a worker’s lifetime to calculate retirees’ first-year benefits but would use inflation rates instead. The new “price indexing” formula will reduce individual benefits and overall Social Security outlays because the inflation rate typically is much lower than the rise in wages. The full impact of the change will be felt in the middle of the century. Rother points out that Social Security benefits, which currently equal 42 percent of the earnings of an average worker retiring at age 65, would be reduced to 20\% of pre-retirement earnings for future retirees, thus potentially freezing retirees into today’s standard of living. However, Rother says that price indexing has to be linked to Bush’s private investment accounts as income from the accounts give retirees the chance to make up the shortfalls. 
A
George W.
R
''Washington Post''
Washington Post
D
References
D
Category:January 4, 2005 Category:Politics and conflicts Category:United States