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8th case of mad cow disease found in Canada

Friday, August 25, 2006

An 8th case of mad cow disease was found in a cow in the province of Alberta. The Canadian Food Inspection Agency did a test and found BSE. The agency found no part of the beef cow’s carcass entered either the human or animal feed chains. The CFIA said that, “the cow could have likely lived another 6 months or so, but died of complications of mastitis”.

“The animal’s age is between eight and 10 years”, said the Canadian Food Inspection Agency.

The CFIA also traced 172 animals would likely ate feed out of that load.

“The cow’s exposure to BSE likely occurred before or during the introduction of new feed regulations in 1997 prohibiting use of cattle parts susceptible to the disease in certain animal feeds”, A release said yesterday.

An investigation is already underway to find the animal’s birth farm and potential sources of contaminated feed.

The United States has delayed lifting a ban on older cattle imports from Canada, pending investigation.

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Myron Cope, Pittsburgh Steelers color commentator, retires after a 35 year career

Wednesday, June 22, 2005

Myron Cope, a locally famous sports announcer for the Pittsburgh Steelers, a National Football League team, has announced his retirement from the booth, effective immediately. Cope had a 35 year career announcing Steelers games with his familiar scratchy voice, often punctuated with unique Yiddish expressions, such as “Feh” and “Yoi”, which brought delight to fans.

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Denny’s Super Bowl free ‘Grand Slam Breakfast’ brings 2 million diners

Friday, February 6, 2009

Denny’s 1,600 chain restaurants across North America, Puerto Rico and Canada, were slammed for eight hours Tuesday with hungry patrons standing on sidewalks for nearly two hours to take advantage of the $5.99 “Grand Slam Breakfast” giveaway.

Denny’s, a dining chain with annual revenue of about $900 million, has advertised in a TV commercial Sunday during the Super Bowl XLIII that it would give away its signature breakfast from 6 a.m. until 2 p.m. local time Tuesday, at all its restaurants in the U.S., Canada and Puerto Rico, while supplies lasted.

Denny’s Diner has promoted the iconic dish giveaway heavily, with a bold 30-second appeal ad that aired during the third quarter of the Super Bowl 43 on Sunday, plus another 15-second ad during the post-game show, offering a free breakfast to some 90 million viewers. In addition, it has placed a full-page ad in USA Today‘s Monday edition. The promotion was further announced on The Today Show and notices were also sent out to the chain’s “Denny’s Breakfast Club” members.

The NBC ad, which was bought to unveil a new promotion for customers squeezed by the recession, may have cost as much as $3 million, said Nelson Marchioli, CEO of Denny’s Corp. Super Bowl XLIII’s 30-second commercial time slot costs $2.4 million–$3 million for the airtime alone, excluding production and talent costs.

The game was televised live by the US NBC Sunday Night Football and Canada’s CTV Television Network. BayTSP has reported that, “as of 10 a.m. Wednesday, commercials that initially aired during NBC’s Super Bowl XLIII broadcast subsequently had been watched online more than 28 million times.”

“The promotion has a total cost of $5 million U.S., which includes $3 million for the commercial on NBC,” said a Denny’s spokesman, noting also that the company received about $50 million in news coverage, most of which was positive. According to a Denny’s representative, two million people walked through the restaurant chains’ doors Tuesday, and each Denny’s restaurant served an average of 130 Grand Slams per hour.

With the “Denny’s Feeds America” promotion, the company has reported 14 million hits on its Web site between Sunday night and Monday morning. Denny’s shares rose 6 cents, or 3.1 percent, to $1.98 in afternoon trading. The stock has traded in a range of $1.18 to $4.10 over the past 52 weeks.

“Denny’s free Grand Slam” has ranked in the top 10 Google searches early Tuesday and fell to No. 18 by the end of the promotion, while “denny s locations” was #9 on Google Trends, which tracks fast-rising searches. It has also held spots No. 1 (Denny’s) and 7 (Grand Slam) on Twitter‘s trending topics. It has generated much chat on Twitter, garnering 1,700 tweets on Tuesday, compared with its average of 59. Doritos, winner of the USA TODAY survey for best Super Bowl spot ad, had 933 mentions after reaching a peak of almost 3,300.

The idea of the TV ad was to get people to come in and re-evaluate Denny’s Diner. “A lot of people have forgotten what Denny’s is, or they think they know, while we’ve come out with a whole lot of new products. We felt like we needed to jump start the brand,” Denny’s Chief Marketing and Innovation Officer Mark Chmiel said.

“We’re celebrating the Grand Slam this year,” Chmiel said. According to the company’s financial data, on January 15 Denny’s reported systemwide comparable-store sales for the fourth quarter were down 6.1 percent, compared to a 0.2 percent decline from the same period in 2007.

According to Robert Gonzalez, public relations company Hill & Knowlton spokesman, Denny’s has expected at least 2 million people to eat a free Grand Slam by the end of the promotion. “Every restaurant is packed with people and lines,” Gonzalez said. “Everything today is about fast. People are on the go, and they’re eating fast food. It’s cutting into sit-down dining,” he added.

“Each of the more than 1,500 Denny’s were planning to make about 100 Grand Slams an hour,” Denny’s spokeswoman Cori Rice said. It had predicted it will have served about 1,400 people per location, more than five times the normal volume. “Grand Slam Breakfast” is a four-item option on its menu, consisting of two pancakes, two eggs, two strips of bacon and two sausage links. It weighs in at 44 grams of fat, 56 carbohydrates and 770 calories.

Nationwide, Denny’s expected to sell about 2 million Grand Slams — about 15 percent of the annual tally. According to Mark Chmiel, chief marketing operator and executive vice president, the diner chain has reported approximately 2 million meals worth more than $12 million were given away nationwide and each Denny’s restaurant served an average of 130 Grand Slams per hour. It estimated it has earned about $50 million worth of public relations following the free Grand Slam campaign, Chmiel said.

The company is also experimenting with a Grand Slam Burrito and also has introduced for this year, a Grand Slamwich, which includes eggs, bacon, sausage and cheese between two slices of bread, with a teaspoon serving. “It already has shown strong consumer appeal,” said Chmiel. The company has received flood of e-mails and letters proving the positive impact of the Grand Slam campaign and commercials on its customers.

Chmiel also announced he’s planning a third major promotion in this year’s third quarter, which happens to include another major sporting event, the World Series. “That’s one we’re definitely looking at,” he said.

Jobless Paris Winslow of downtown San Francisco, California has joined the long line which stretched from the front door on Mission Street, between Fourth and Fifth streets, to the corner of Fourth and up the block. “The economy is getting kind of scary. This line looks like those pictures of soup kitchen lines during the 1929 Great Depression,” Winslow said.

“I came all the way from San Francisco for a free $6 meal, Isn’t that pathetic? A year ago, I never would have done this. These days I’m willing to put my ego on the back burner,” said Stephen Weller, a jobless contractor who waited with his dog, Emmett. California Denny’s restaurant managers have issued rain checks (for free chilled meals, as security backed by actual bacon) to anyone who failed to get in by the 2 p.m. deadline.

A big eater could also “Slam It Up” by adding any two additional items for 99 cents each to their meal. Customers on Tuesday were also handed “bounceback” coupon books that include offers for additional free menu items with purchases. Chicago Tribune reporter Kevin Pang has eaten five free Grand Slams on Tuesday at five different Denny’s Diners in four hours. He claims to have consumed 4,100 calories at Harwood Heights, 5:36 a.m, at Schiller Park, 6:22 a.m., at Franklin Park, 7:08 a.m., at Melrose Park, 7:41 a.m. and at Grand Slam No. 5 Oak Park, 8:57 a.m.

“The Grand Slam has always been a Denny’s favorite. This free offer is our way of reacquainting America with Denny’s real breakfast and with the Denny’s brand,” Denny’s CEO Nelson Marchioli said in a statement. In 1977s, the Grand Slam started as a baseball-related promotion in Atlanta, Georgia. Its normal price averages around $5.99. Marchioli said the event was also a way to kick-off its “Year of the Grand Slam” promotion. Denny’s claimed it has sold 12.5 million Grand Slams a year.

“The economy’s tough and people are jumping all the way to fast food to try to figure it out. We all use fast food, whether it’s for time or convenience or for money. But you can go to Denny’s and you don’t have to give up a real breakfast and that was the whole focus of our commercial,” Marchioli explained. McDonald’s (MCD, Fortune 500) has done well during this economic meltdown since the global recession pushes people toward less expensive dining options.

McDonald’s has announced plans Wednesday to open 175 new restaurants in China this year despite the global economic crisis, thereby increasing the number of outlets in China by 17 percent, from 1,050 currently. Last month, McDonald’s 2008 net profit has risen 80 percent from 2007 to 4.3 billion dollars.

Marchioli has also introduced Denny’s $4 Weekday Express Slam, which is a streamlined version of the Grand Slam. “I want to take back share. For too long, we have allowed others to take share, whether it was Starbucks or McDonald’s. They’re fine competitors and I don’t expect to take all their business from them, but I’d like a little bit back,” Marchioli noted.

According to Rafi Mohammed, author of “The Art of Pricing,” people love free. “It triggers a Pavlovian response in people,” said Mohammed. If Pavlov’s dogs salivate when a bell rings, Denny’s free Grand Slam breakfast has attracted 2 million hungry customers. “I believe free maximizes trial and doesn’t devalue a product as long as it is a rare event. Aside from the cost, the major downside is that it attracts customers who truly have no intention of coming back,” he added.

According to University of Portland consumer psychology professor Deana Julka, people flock to free promotions amid just a few dollars saving because there’s nothing in life for free. “So when there’s something out there that costs nothing, it creates a psychological rush. Especially in these times when people feel overtaxed or overburden, there’s an internal reward people feel by getting something for free,” she said. “It’s being thrifty and feeling like you beat the system. Free really hits the spot for a lot of people,” Julka added.

“Free is an emotional hot button. When free is concerned, there is no downside – or, at least, we don’t see the downside immediately. So we overvalue everything that is free. People love free stuff, particularly when money’s tight,” said Dan Ariely, a business professor at Duke University, author of “Predictably Irrational: The Hidden Forces That Shape Our Decisions.”

Experts, however, explained these moves need to be done sparingly, since giveaways can teeter in the balance between desperation and a well designed marketing ploy. “Giving your product away for free is not worth it because it undermines your brand value,” said branding expert Rob Frankel, saying people are attached to the idea of it being free, than the actual product itself.

Free giveaways are not anything new in the food industry. “It just feels good when you can get something for free and not have to worry about it coming out of your wallet,” Frankel noted. Dunkin’ Donuts and Panera Bread all have had free coffee and food promos last year. “In November, Starbucks gave away free cup of coffee to anyone who came in on Election Day. Have you taken a look at how Starbucks is doing now?” Last week it has announced it would shut down 300 stores, in addition to the 600 it already planned to close.

On February 24, IHOP will be offering a free shortstack to every customer to encourage donations (in place of the cost) for Childrens Miracle Network. The International House of Pancakes (IHOP) is a United States-based restaurant chain that specializes in breakfast foods and is owned by DineEquity. The chain had more than 1950 restaurants in all 50 states, the U.S. Virgin Islands, Canada and Mexico. Since 2006, IHOP’s National Pancake Day celebration has raised over $1.85 million. In 2008, over 1.5 million pancakes (12 miles high if they were stacked) were given to customers for donations.

Denny’s (“Denny’s Diner”) is a full-service diner/family restaurant chain in the United States. It operates over 2,500 restaurants in the United States (including Puerto Rico), Canada, Curaçao, Costa Rica, El Salvador, Jamaica, Japan, Mexico, and New Zealand). The resto chain is known for always being open, serving breakfast, lunch, dinner, and dessert around the clock.

Today, Denny’s operates about 1,600 restaurants in all 50 U.S. states, Canada and Mexico. There are also about 578 Denny’s restaurants in Japan operated under a license by a subsidiary of Seven & I Holdings, seven Denny’s locations in New Zealand, and approximately 38 Denny’s diners in the United States. Denny’s headquarters is now located in Spartanburg, South Carolina, headquarters of the parent company Trans World Corporation that acquired Denny’s in 1987.

Denny’s was historically notable for offering a free meal to anyone on their birthday. The offer included a limited number of meal options from a special birthday menu. The promotional ritual ceased in 1993, though occasionally individual franchises will continue the tradition.

In 2008, Denny’s has ceased to be in the ranks among the top diner chains in the $83 billion breakfast market, whose top five firms — McDonald’s, Starbucks, Dunkin’ Donuts, Burger King and IHOP — accounted for 22 percent of the volume. “A lot of consumers have written Denny’s off their let’s-go-there list,” said Ron Paul, president of Technomic, a consulting firm.

Super Bowl XLIII was an American football game between the American Football Conference champion Pittsburgh Steelers (15–4) and the National Football Conference champion Arizona Cardinals (12–8) to decide the National Football League (NFL) champion for the 2008 NFL season. It was played on February 1, 2009, at Raymond James Stadiumin Tampa, Florida. It has an attendance of 70,774 and 98.7 million viewers. Pittsburgh earned its sixth Super Bowl win, thus securing sole possession of the record for most Super Bowl wins.

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Wikinews interviews William Pomerantz, Senior Director of Space Prizes at the X PRIZE Foundation
Regardless of who wins the prize, people all around the world will be able to experience the mission through high-def video-streams.
Saturday, August 28, 2010

Andreas Hornig, Wikinews contributor and team member of Synergy Moon, competitor in the Google Lunar X Prize, managed to interview Senior Director of Space Prizes William Pomerantz of the X PRIZE Foundation about the competitions, goals, and impacts via e-mail for HDTVTotal.com and Wikinews.

By Wikinews,

the free news source

Other stories: Science and technology
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This exclusive interview features first-hand journalism by a Wikinews reporter. See the collaboration page for more details.


This article is part of a page redesign trial on Wikinews. Please leave comments or bug reports on this redesign.This interview originally appeared on HDTVTotal.com, released under the Creative Commons Attribution 3.0 license. Credit for this interview goes to HDTVTotal.com and Andreas -horn- Hornig.

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2008 Taipei International Book Exibition: United Daily News makes good promotion on e-books launch

Saturday, February 23, 2008

In the Hall 1 of 2008 Taipei International Book Exhibition, the public often think this hall as a collective from general books. But this year, United Daily News Group (????) not only participated in this show with major brands on Economic Daily News (????), Linking Publishing (?????), and United Daily News Online (????), but also announced two interactive e-books with Old Master Q and Wan-Wan (??) on Saturday (Feb. 16). With two major announcements, the General Book Hall conjoined with a fashion of comic.

The “Old Master Q” became a fashion in not only Taiwan but also Chinese-language world because readers in Chinese-language world wanted to collect whole series and recommended its series as “Must Buy Series”, its humor style attracted readers to read. After several arrangements with music and flash movies, the “Old Master Q” series will be more interactive than a simple comic book.

Joseph Chak Wong (??) ever replied a question to local media about its characteristic and said:

The characteristic from main and sub characters can be varied, even though it (the series) is filled with male characters more than females, but I will try to neutralize the story structure and characteristic with character designs.

In the afternoon, a Taiwanese famous blogger drawer “Wan-Wan” Chia-wei Hu participated the E-book launch of “Can’t I go to work? A drawing diary by Wan-Wan.”. The original author, Wan-Wan said to media and fans:

Since my published works were famous and steadily, I will do a optimization from my past drawing and try to create a significant brand to market my works into the world.

After her words, the possibility of brand establishment on Wan-Wan’s work may be increased in the future for the global marketing in comic world.

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February

20

Pfizer and Microsoft team up against Viagra spam

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Pfizer and Microsoft team up against Viagra spam
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Sunday, February 13, 2005

New York –”Buy cheap Viagra through us – no prescription required!” Anyone with an active email account will recognize lines like this one. According to some reports, unsolicited advertisements (spam) for Viagra and similar drugs account for one in four spam messages.

BACKGROUND

Spamming remains one of the biggest problems facing email users today. While users and systems administrators have improved their defenses against unsolicited email, many spammers now insert random words or characters into their letters in order to bypass filters. The Wikipedia article Stopping email abuse provides an overview of the various strategies employed by companies, Internet users and systems administrators to deal with the issue.

Ever since pharmaceutical giant Pfizer promised to cure erectile dysfunction once and for all with its blue pills containing the drug sildenafil citrate, spammers have tried to tap into male anxiety by offering prescription-free sales of unapproved “generic” Viagra and clones such as Cialis soft tabs. Legislation like the U.S. CAN-SPAM act has done little to stem the tide of email advertising the products.

Now Pfizer has entered a pledge with Microsoft Corporation, the world’s largest software company, to address the problem. The joint effort will focus on lawsuits against spammers as well as the companies they advertise. “Pfizer is joining with Microsoft on these actions as part of our shared pledge to reduce the sale of these products and to fight the senders of unsolicited e-mail that overwhelms people’s inboxes,” said Jeff Kindler, executive vice president at Pfizer.

Microsoft has filed civil actions against spammers advertising the websites CanadianPharmacy and E-Pharmacy Direct. Pfizer has filed lawsuits against the two companies, and has taken actions against websites which use the word “Viagra” in their domain names. Sales of controlled drugs from Canadian pharmacies to the United States are illegal, but most drugs sold in Canada have nevertheless undergone testing by the U.S. Food and Drug Administration. This is not the case for many of the Viagra clones sold by Internet companies and manufactured in countries like China and India. While it was not clear that CanadianPharmacy was actually shipping drugs from Canada, Pfizer’s general counsel, Beth Levine, claimed that the company filled orders using a call center in Montreal, reported the Toronto Star.

For Microsoft’s part, they allege that the joint effort with Pfizer is part of their “multi-pronged attack on the barrage of spam.” As the creator of the popular email program Outlook, Microsoft has been criticized in the past for the product’s spam filtering process. Recently, Microsoft added anti-spam measures to its popular Exchange server. Exchange 2003 now includes support for accessing so-called real-time block lists, or RTBLs. An RTBL is a list of the IP addresses maintained by a third party; the addresses on the list are those of mailservers thought to have sent spam recently. Exchange 2003 can query the list for each message it receives.

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February

19

St. Anthony Foundation provides hope

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St. Anthony Foundation provides hope
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Friday, September 23, 2005

On the corner of Golden Gate Ave. and Jones St. in the Tenderloin, San Francisco, right next to the Civic Center you can see a throng of low-income and homeless people lining up outside of St. Anthony’s Dining Room hall which opens up it’s doors everyday at 11:30 a.m. Volunteers dressed in St. Anthony Foundation shirts help keep the lines moving as hundreds of homeless and low income people shuffle their way towards the dining hall underneath the watchful eyes of a small statue of St. Francis of Assisi.

“There’s a lot of people who go hungry out here and it ain’t right.” says Jimmy Scott, a slightly brawny 44-year-old black man who has been living homeless in San Francisco for the past three years. “There are families out here with kids and everything and they have to walk around all night just to stay awake so they don’t get hurt or killed…Right here in the U.S. this is going on…it ain’t right.”

The dining hall, which has been open for the past 54 years, is owned by the St. Anthony Foundation which helps low income and homeless people and families in the Civic Center, Tenderloin, and SOMA areas with clothing, shelter, food, drug rehabilitation, and many other services. St. Anthony’s administrative offices are found at 121 Golden Gate Ave. with the majority of the foundation’s buildings on Golden Gate Ave. and Jones St.

“We are right in the heart of the homeless population of San Francisco,” says Barry Stenger, 55, who’s been working for the St. Anthony Foundation for one year, and is the Director of Development and Communications, “and people are pushed here because of the economic forces of San Francisco because it’s hard to be upper middle class in San Francisco.”

According to the San Francisco Chamber of Commerce, “San Francisco’s cost of living remains one of the highest in the country” with the average household income in San Francisco being around $76,400 and the average price of housing being $543,000. Average household income for the United States in 2002, according to the U.S. Census Bureau, was $42,409 and the average price of housing for the United States according to the National Association of Realtors was $185,200 in 2004.

“We served our 32 millionth meal on Tuesday,” said Stenger, “and we serve 2,500 meals a day. Some of our people who work here actually get served [food] here because they spend all their money towards rent and medical costs.”

The St. Anthony Foundation was started by Fr. Alfred Boeddeker in 1950 one year after Fr. Boeddeker became pastor of St. Boniface church on Golden Gate St. where he was baptized as a child. During his lifetime, according to the foundation’s website, he was referred to as the “Patron St. of the Tenderloin” and had Boeddeker park named after him because of his, and his foundation’s, achievements with helping out the homeless and low income community.

“[St. Anthony’s] is a good thing,” said Jimmy Scott, “they provide a good service and they feed people and they clothe them and provide furniture when you get housing and give you groceries when you have AIDS. It’s a good little organization.”

“Our dining room is open 365 days a year.” Said Stenger. “Our other facilities are open seven days a week. We have a residence for senior women and our [free medical] clinic is open five days a week and we also have a furniture and clothing store. We have 12 programs all together.”

Some of those programs are the Father Alfred Center which provides 61 men two programs for getting out of drug and alcohol abuse, the Employment Program/Learning Center which helps participants in educational and employment opportunities and provides each one with a personal staff advisor, and a Senior Outreach and Support Services center which states its mission is to “promote independence, self determination, and alleviate isolation” for seniors who are 60 and older.

A few homeless people who were interviewed complained that St. Anthony’s had some staff who were rude and that they were kicked out of the dining hall; other homeless within the area refuted those claims saying St. Anthony’s has nice staff and only kicks people out who cause trouble.

“It’s a good place and good people. Everybody is so kind and so respectful and everything is under control.” Said John Henderson, a tall and skinny 57-year-old homeless black man who has only been living in San Francisco for close to two months because he recently moved there from Phoenix, Arizona. “It’s pretty cool because they’re under control because yesterday I saw at Glide [Memorial Church which also has services for the poor and low income] and they were handing out food boxes and people were just rushing in and the woman in charge there was freaking out and so she just sat down. That would never happen at St. Anthony’s.”

“And they clean too!” Henderson said laughing with a grin on his face referring to the fact that there are no drugs allowed in the premises. “Not that Glide ain’t clean if you know what I mean.”

“We [also] have a whole division that deals with justice education and advocacy to change the system that brings people to our doorstep.” Said Stenger. “We hear a lot of appreciation from the people we serve. We get a lot of testimony from our clients who have become clean and sober. Sometimes we have to push them a little to get them out the door because they love the [foundation] so much because it has changed their lives.”

This article features first-hand journalism by Wikinews members. See the collaboration page for more details.
This article features first-hand journalism by Wikinews members. See the collaboration page for more details.
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February

18

New method of displaying time patented

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New method of displaying time patented
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Saturday, October 14, 2006

An American inventor has patented a pair of new time formats with a footprint less than 50% of that of conventional four-digit time. The more unusual of the two new formats, called “TWELV”, dispenses with numerals altogether. In place of clock hands or digits, the new clock uses color to convey the hour and a moon image to convey the minute, which moon slowly grows throughout the course of an hour from a narrow crescent to a full-fledged circle.

The second and more approachable of the new formats retains numerical digits to indicate the minute but uses colors to convey the hour.

Early critics question whether the aesthetic benefits of the moon-clock will be sufficient to encourage users to learn the color-based time-telling system. However, the size advantages of the new system may make it particularly suitable for mobile applications, particularly cell phones, wearable computers, and head-mounted displays.

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February

14

Microsoft extends warranty for all Xbox 360s

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Microsoft extends warranty for all Xbox 360s
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Saturday, December 23, 2006

On December 22, 2006 Microsoft has announced that it has extended its warranty for all Xbox 360 video game consoles to one year in the United States. While this one year warranty applies to all Xbox 360 software as well, Xbox 360 accessories will still carry their original 90 day warranty.

According to a statement by Microsoft:

“Customers that experience hardware issues with their Xbox 360 within one year of purchase will have their consoles repaired at no cost. Moreover, the new warranty policy is retroactive, so consumers that may have already paid for out-of-warranty Xbox 360 repair within one year of the console’s purchase will be eligible for reimbursement of their console repair charges.”

This extension should help ease customers’ minds who have been concerned with the Xbox 360’s reputation for hardware failures. A partial list of hardware issues can be found here: http://en.wikipedia.org/wiki/Xbox_360_technical_problems

People who have paid for Xbox 360 repair will be automatically distributed a reimbursement check in about 10 weeks from the present date.

Previously in September, 2006, Microsoft had waived the cost for repairs on all Xbox 360 consoles made before January 1, 2006, and refunded any fees already paid.

A full description of the updated warranty can be found here: http://www.xbox.com/en-US/support/systemsetup/xbox360/resources/warranty.htm

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February

13

Bush to Propose Major Overhaul of Social Security Benefits

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Bush to Propose Major Overhaul of Social Security Benefits
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Tuesday, January 4, 2005

Republicans and lobbyists close to President George W. Bush have reported that the White House will propose changing the formula for establishing initial Social Security benefit levels in order to cut guaranteed expenditures on future retirees, according to today’s Washington Post. The Social Security Administration would no longer use the increase in wages over a worker’s lifetime to calculate retirees’ first-year benefits but would use inflation rates instead. The new “price indexing” formula will reduce individual benefits and overall Social Security outlays because the inflation rate typically is much lower than the rise in wages. The full impact of the change will be felt in the middle of the century.

The Bush Administration proposal, which will be offered to Congress in February or March 2005, is part of an overall Social Security reform package that also would create “personal investment accounts” into which individual taxpayers could divert part of their payroll taxes. The White House believes that the shortfall in benefits created by the adoption of price indexing would be made up by capital gains from the stocks and bonds held by individual taxpayers in their personal investment accounts.

The move is akin to the private sector’s migration from defined benefit retirement plans to defined contribution benefit plans such as 401(k)s as almost half of a worker’s benefits will not be guaranteed by the year 2075. President Bush will support the move to price indexing for calculating initial benefits by pointing out that it was the approach recommended by his 2001 Commission to Strengthen Social Security.

Benefits currently are calculated by averaging a worker’s earnings in their 35 highest-paid years and adjusting earnings to factor in cost of living standards at the worker’s retirement age. Under the Bush proposal, rather than adjusting benefits on the basis of earnings growth, the calculation would be based on the increase in the consumer price index over those years.

The implementation of “price indexing” would cut future Social Security costs by trillions of dollars. However, the cuts in guaranteed benefits for middle-class and some high-income workers would be substantial: 9.9% for workers retiring in 2022, over 25% for workers retiring in 2042, and 46% for workers retiring in 2075.

Opponents of the price-indexing proposal point out that inflation-based calculations of benefits, by linking benefits to prices but not wage levels, would cut retirees out from future increases in living standards since it is wages and not prices that determine standards of living. While American Association of Retired Persons (AARP) Policy Director John Rother concedes that many of the arguments of opponents are valid, price indexing is inevitable and must be viewed in the context of President Bush’s total reform package.

Rother points out that Social Security benefits, which currently equal 42 percent of the earnings of an average worker retiring at age 65, would be reduced to 20% of pre-retirement earnings for future retirees, thus potentially freezing retirees into today’s standard of living. However, Rother says that price indexing has to be linked to Bush’s private investment accounts as income from the accounts give retirees the chance to make up the shortfalls.

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