THE DEMOCRATS VS. SOCIAL SECURITY:

Competing Visions For Social Security (Jonathan Weisman, February 24, 2005, Washington Post)

[O]ut of political pragmatism, those who hope to preserve a basic structure established by Franklin D. Roosevelt -- mainly Democrats -- have obscured both tax increases and benefit cuts, using a variety of mechanisms that make the proposals remarkably complex. [...]

Democrats and liberal economists have focused on bringing Social Security's finances into line without fundamentally altering the system. But their formal proposals would not simply raise taxes and reduce benefits. One prominent Democratic plan, proposed by Massachusetts Institute of Technology economist Peter A. Diamond and Brookings Institution economist Peter R. Orszag, would use a nine-stage battery of revenue-raisers and benefit reductions to produce a Social Security system that would be both in balance and more generous for poor workers, widows, the disabled and children who survive the death of their parents.

"It was designed by looking at particular sources of imbalance that seemed to us worth addressing," Diamond said.

Under the plan, all new state and local government workers would be brought into the Social Security system, effectively expanding the Social Security tax base to cover the 25 percent of government workers who now are exempt. Diamond and Orszag would also raise the cap on wages subject to payroll taxes to about $105,000 for now.

To raise more revenue, they would impose a 3 percent tax on all earnings above the cap. They would also slowly raise the current 12.4 percent Social Security tax rate to 14.2 percent in 2055.

Benefits would be cut, on a scale that starts with trims of only 0.6 percent for a worker currently 45 years old but rising to 8.6 percent for a future retiree who is now 25. And under a complex formula, cuts would hit more affluent retirees the hardest, while benefits for low-wage workers would rise.

Dean Speaks to Cornell Community: Party leader introduces Democrats' new strategy (Julie Geng, 2/24/05, Cornell Sun)

Dean began by speaking on what he thought was the most important issue today: the proposed privatization of Social Security. He said that President George W. Bush was trying to appeal to 20- and 30-year-olds through privatization, but claimed that in fact that generation would end up having to pay the $2 trillion bill for it.

"I think that privatizing Social Security has much more to do with the enormous amount of money that corporate Wall Street poured into the President of the United States's campaign than [helping] senior citizens," Dean said. "[Social Security] was a response toward [overcoming] abject poverty...it is not meant as a retirement program...it was meant as a social safety net for people who had reached the end of their working careers and did not deserve, after a long lifetime of dignified work, to live in poverty. ... It's not supposed to be a pension."

Dean pointed out that, while he would not endorse this, if Social Security were left alone for 30 years, its benefits would be reduced to 80 percent of what it is now. He acknowledged that while there were indeed problems with the program, turning to Wall Street was not the answer.

The President needs to just start beating Democrats with the fact that their position on SS requires benefit cuts and/or tax hikes.

Posted by Orrin Judd at February 25, 2005 12:00 AM