Tuesday, March 15, 2011;
Regarding Charles Krauthammer's March 11 op-ed column "Et tu, Jack Lew?":
By law, income to the Social Security trust fund must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the federal government. All securities held by the trust funds are "special issues" of the U.S. Treasury. Such securities are available only to the trust funds.
Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U.S. government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. savings bonds or other financial instruments of the federal government.
I don't know about Mr. Krauthammer, but when I buy guaranteed Treasury securities, I expect my government to honor them.
Don McDaniel, Lanham
Charles Krauthammer cited a "back-of-the-envelope solvable" Social Security entitlement problem: "Raise the retirement age, tweak the indexing formula (from wage inflation to price inflation) and means-test so that Warren Buffett's check gets redirected to a senior in need." While this easy-as-pie solution may not concern Mr. Buffett, it should concern the millions of baby boomers who have scrimped and sacrificed all their working lives to accumulate a retirement nest egg, put their children through college, pay off a mortgage, etc.
Means-test based on what? On 401(k) retirement fund balances, on income from defined-benefit pensions, on assessed property values, on the previous year's adjusted gross income? Most substantial 401(k), IRA or 403(b) savings fund balances reflect disciplined savings over decades. Does Mr. Krauthammer think the industrious and frugal should be penalized for the rest of their lives to support both the needy and the spendthrift?
Let's clarify whether the means-testing will be progressive, whether it will be done every year and whether unearned income, inherited wealth, real estate, derivatives, futures options and insurance policies will be included. Let's test corporations as well as individuals.
Back-of-the-envelope solvable? Not likely, not after 35 years of saving for a comfortable retirement.
William E. Fallon, Gaithersburg