February 8, 2006
HE WAS ELECTED ON IT TWICE, WHY WOULD HE DITCH IT?:
Sleight of Hand: Bush buried detailed Social Security privatization proposals in his budget. Can the surprise move jump-start bipartisan reform? (Allan Sloan, Feb. 8, 2006, Newsweek)
[A]nyone who thought that Bush would wait for bipartisanship to deal with Social Security was wrong. Instead, he stuck his own privatization proposals into his proposed budget."The Democrats were laughing all the way to the funeral of Social Security modernization," White House spokesman Trent Duffy told me in an interview Tuesday, but "the president still cares deeply about this." Duffy asserted that Bush would have been remiss not to include in the budget the cost of something that he feels so strongly about, and he seemed surprised at my surprise that Social Security privatization had been written into the budget without any advance fanfare. [...]
Unlike Bush's generalized privatization talk of last year, we're now talking detailed numbers. On page 321 of the budget proposal, you see the privatization costs: $24.182 billion in fiscal 2010, $57.429 billion in fiscal 2011 and another $630.533 billion for the five years after that, for a seven-year total of $712.144 billion.
In the first year of private accounts, people would be allowed to divert up to 4 percent of their wages covered by Social Security into what Bush called "voluntary private accounts." The maximum contribution to such accounts would start at $1,100 annually and rise by $100 a year through 2016.
It's not clear how big a reduction in the basic benefit Social Security recipients would have to take in return for being able to set up these accounts, or precisely how the accounts would work.
Bush also wants to change the way Social Security benefits are calculated for most people by adopting so-called progressive indexing. Lower-income people would continue to have their Social Security benefits tied to wages, but the benefits paid to higher-paid people would be tied to inflation.
Wages have typically risen 1.1 percent a year more than inflation, so over time, that disparity would give lower-paid and higher-paid people essentially the same benefit. However, higher-paid workers would be paying substantially more into the system than lower-paid people would.
This means that although progressive indexing is an attractive idea from a social-justice point of view, it would reduce Social Security's political support by making it seem more like welfare than an earned benefit.
Posted by Orrin Judd at February 8, 2006 12:57 PM
Are these Democrats INSANE? Don't they realize anyone with a brain under the age of 35 is watching this broken record skip and spin, mouths agape? We're never going to vote for you guys, get it? We want private accounts. We want HSA's? Who out there with a functioning brain stem wouldn't? Geeze! Already!
Posted by: Joy at February 8, 2006 1:12 PMIt's good to be the king.
"...higher-paid workers would be paying substantially more into the system than lower-paid people would" It is unfair to those who had paid more into the system. But when is a social policy ever 'fair'. The rich derive their incomes from various 'investments'. They don't pay medicare or soc. sec. or income tax on these investments. That is why the rich Democrats, such as Kerry, Kennedy, and Clinton, don't mind raising income tax to "soak the rich". (Heinze-Kerry paid an average of 12% on their substantial 2003 income.) The poor may receive welfare. The middle income earners derive their earnings from employment, they can neither hide their incomes from the tax men, nor receive welfare. It is only fair for this group of people to keep part of the soc. sec. for their old age. As a matter of fact, I wonder if the measly sum is enough to pay for a funeral.
Dittos Jim. No wonder he smirks all the time.
Posted by: Bruno at February 8, 2006 2:29 PMFDR has been dead for almost 61 years. The Democrats seem to want to join him. And quickly.
They are marginalizing themselves more and more, every day. Their staunchest supporters (aside from the black community) the public unions, don't care about SS, because they just force local officials to raise their pensions (and cut their retirement age). That is another problem, but the public unions are more opposed to SS reform than just about any other group. They know their pensions (paid by tax dollars) are next.
Posted by: jim hamlen at February 8, 2006 4:20 PM"Sleight of Hand"
Funny how, for Newsweek, everytime Bush does what he said he would it's either trickery or a lie.
Posted by: John Resnick at February 8, 2006 5:03 PMWhat do they mean that social security SEEMS like welfare? What is it called when the money of working people is used to make payments to people who are not working?
Posted by: GER at February 9, 2006 11:55 AM