This thread is getting long enough that I'll admit not reading all the details. I don't like to post without seeing it all, but my scan didn't indicate that anyone caught a couple of things.

According to the Social Security web pages, members of Congress do pay into Social Security. I believe it's since about 1994. Most Federal employees have also been switched to "subparagraph of FICA" plans, although to some extent their "contributions to Social Security" may be sequestered separately. That does, perhaps, affect a couple of arguments previously posted; although not by a lot. You can check it out with the FICA website.

If Social Security is to provide a "minimum secure income" then the Fed should assure that income. Letting people go out and shoot craps with the basic needs level of support does nothing to help provide a "safety net."

There are already multiple methods by which people who want more than the minimum can invest some of their own money, under extremely favorable terms. Independant Retirement Accounts (IRA), Roth Accounts, and 401k and 403x plans are only the surface. (I forget what the x is, but I think 403b is a common one.)

The ONLY reason I can see for Mr Bush's plan (using "plan" loosely) is that the heavy hitters (and heavy campaign donors) see a lot of money going into FICA withholding that they can't get their hands on.

Under current law, it is illegal for the government to invest in capital ventures. While the Fed, as in everything else, is into deficit financing for Social Security, (call it cash flow basis) so there really isn't any money that the Fed could let them play with, the "private investment" scheme takes some of the Federal "inflow" and lets them get their hands on it. If it's to be a "social security" program, losses that would put an individuals "security" income below some level would have to be made up (guaranteed) or it isn't a security program.

Perhaps we need a regulation requiring people to pay their FICA taxes to a minimum sustainable benefit level, with an additional requirement that they must have a private retirement plan and put a specific amount into it each year?

As to the "cap" on the amount of income on which FICA taxes are paid, the logic is that there is also a "cap" on the maximum benefit. Currently, no single individual can get more than a couple of thousand dollars per month, regardless of how much was paid in. The retirement benefit is based entirely on how much "covered income" you had in the most recent few years, and the current maximum benefit level isn't going to break the system if it's paid to the few "who could pay more." It does seem fair that those who won't get any more - regardless of how much they pay - might be excused from "contributing" an excessive amount to this one program. We should stick it to them on their income tax so that all programs can benefit.

John