From 'Social Security' to 'Personal Security'
Byline: THE WASHINGTON TIMES
As the debate about Social Security heats up, I have to agree with the point of view presented by Richard Rahn in his Thursday Commentary column ("Right questions in right order"). Here are some additional suggestions:
First, with the current system, high-wage earners see their FICA deduction end once they have met their annual obligation. I think these people should have the option of continuing to have the deduction taken from their wages but have this money go into personal accounts. It could be the employer's 401(k) plan or an IRA-type plan.
The existing 401(k) and IRA caps would not apply to these additional deposits if the amount contributed did not exceed the regular FICA payroll deduction. Employers would not be obligated to match the employee contributions, but the government could sweeten the pot by offering an employer tax credit for matching. The program would be optional for the employees and the employers.
Second, President Bush's plan for private accounts should provide all employees with the option of increasing their FICA payroll deductions, with the extra amount going directly into a private account. Again, 401(k) and IRA caps would not apply, and employer deductions also would be optional.
The important thing to consider with both of these ideas is that they could be implemented today without affecting the existing system. The movement toward "personal security" from "social security" could begin now, and the arguments from the naysayers could be sidestepped. …