BUSH’S SOCIAL SECURITY PLAN….So it turns out that the Social Security plan George Bush talked about last night was based on a proposal called the “Pozen Plan,” named after Bob Pozen, who first suggested it. CBPP has a detailed breakdown of the plan, but for those of you with short attention spans I’ve cut it down to a single chart.
Basically, low income earners ($16K/year) currently get about 49% of their income replaced by Social Security. Under the Pozen plan, this would stay the same. Medium income workers ($36K/year), however, would see their replacement rate fall from 36% to 23% by the year 2100. The replacement rate for higher income workers ($58K/year) would fall to 14% and for maximum income workers ($90K/year) to 9%.
That’s a pretty substantial cut in benefits. I think you can decide for yourself whether you like this plan or not.
UPDATE: As Judd Legum points out, Pozen’s plan cuts benefits for anyone making over $20,000 per year. This is Bush’s definition of “people who are better off.” Needless to say, this is a slightly different definition than he used when he was selling his tax cuts.