Would Kerry cut Social Security 80%?

• Position: Your Life - U.S. presidential candidate John F. Kerry - Brief Article

Although Democratic presidential nominee John Kerry has not laid out a plan to reform Social Security or to solve its fiscal problems, he has said he would consider "making sure that high-income beneficiaries don't get more out than they pay in." In practice, the Kerry plan would mean cutting Social Security benefits by about 80% for those whose benefits are reduced, warns Martin Feldstein, chairman of the Council of Economic Advisers under Pres. Ronald Reagan.

Here's why:

Anyone who turns 65 this year and always has paid the maximum Social Security tax would have paid a total of $82,066 from age 21 to 65. Such a new retiree now would be entitled to annual benefits of about $22,000, an amount that would rise with inflation.

With a remaining life expectancy of 17 years and a two percent inflation rate, this retiree would receive $440,000 by age 82; to limit the expected benefit to the $82,066 paid in lifetime taxes, the Kerry...