US President George Bush has unveiled new proposals for his revision of the US retirement system.
Like Europe, the US faces a financial crisis in the future with not enough workers paying taxes to cover the cost of retirement pensions. Bush wants to divert some of the money Americans pay as social security contributions into stock market investments. In response to criticism of that idea, he is proposing different rates of index linked pension rises for poorer people and for richer retirees, based on the fact that wages go up at a higher rate than inflation. Bush said: “If you’re a low income worker, your benefits ought to rise with wage increases and if you are an upper income worker, your benefits ought to rise with inflation. It seems fair to me, seems like a noble calling for the United States of America.” Members of the US Congress have to approve the changes. Many, from both Mr Bush’s Republican party and his opponents, the Democrats, remain unconvinced. Some Republicans are worried about the President’s latest proposal, which they say will move the US towards a welfare state system. Many democrats have accused Bush of trying to privatise and eliminate guaranteed retirement pensions. The Republicans control Congress and are predicting that the plan to overhaul pensions will be voted through later this year.