Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Friday, April 29, 2005

Bush Lies Again on Social Security

Bush says:
"I propose a Social Security system in the future where benefits for low income workers will grow faster than benefits for people who are better off,"

He means:
For the top 70% of wage earners, benefits will be cut. For the bottom 30%, they will stay as they are now.

See how he makes it sound like he is proposing an increase? I am so angry, I can hardly speak (thus, I blog). The Washington Times says he is proposing an increase. They are liars. CNN and Washington Post talk of "fixing" the problem. Only the NY Times is accurate in reporting: "Bush proposes cut in Social Security benefits."

Fox News reports the truth 2/3 of the way through its article, but adds "currently, all retirees face a reduction of benefits to 73% of current levels when the trust fund goes broke in 2041." That is another lie. The law as it stands does not mandate cuts. In fact the reverse is true: the law reuires current benefits must be paid! Bush wants to break the law rather than add funding from the general fund. Or just borrowing the $$ as he does for everything else!!!!!!

The Bush administration projects the trust fund will hit zero in 2041. Unless funds are increased from some source, they project a need to cut benefits which could be done at 27% across the board... if projections are accurate 35 years out. Remember the projections of $5 trillion surpluses just 5 years ago. The fact is that by raising the "cap" we can resolve all problems. The "cap": currently, the payroll tax is 6.5% of income up to $90,000 - beyond that, no tax!. Why, exactly, should professionals like me stop paying Social Security taxes midway through the year? I would gladly pay SS taxes on more of my income if that would guarantee retirement benefits for all, rather than raising the retirement age or cutting benefits. I mean, I like the extra money in my pocket, but to take that money at the expense of others is wrong. I don't think any Republican has ever uttered that phrase. Take what you can get, right? That's the difference between us. What a ridiculous idea to suggest that those of us in our 30s pay so that boomers can get full benefits, while we get benefits that will be dramatically less (do the math: increase a theoretical benefit of $30K/year by 3% over time in one column, 2% in another -- see the difference it makes over 40 years).

That's what I mean when I say I vote on moral values.

7 comments:

Anonymous said...

What I find so rediculous is the Republican assumption that current demographic trends in the ratio between workers and retirees will continue in the same direction and at the same pace!

Social Security is looking like its trouble now because there are so many more Boomers than Gen X'ers (people in their 30s). But what the Republicans fail to mention is that the Boomers' kids will be well established in the work force by 2041 while many of the Boomers will have died (unless the Republicans pass a law forcing them to go on permanant life support).

The result will be that when Gen X'ers retire we'll have that great mass of Boomer-kids (aka Tidal Wave II, aka Boomer Echo) to pay for our social security.

Frankly, like LTG, I'm not at risk regardless of what Bush does to social security. My life time earning levels are high enough that I'll be able to assure my own retirement without government assistance (and despite a reasonable amount of government intervention against my interests). But like LTG I recognize that social security is not about me. Its about my neighborhood bus driver or the women who clean my office at night.

We could solve the whole problem with a modest tax increase or means testing but that doesn't sound like a radical enough sounding response to this fake crisis that Bush is trying to whip up. 

// posted by Raised By Republicans

Anonymous said...

I'm reminded of yet another Dilbert cartoon. The boss announces at a board meeting: "We're poised for success -- we expect huge earnings and increased market share. Next on the agenda: There will be no raises because it will be a difficult year ... Carol, I thought I told you to put the United Way update between those two agenda items."

So we can repeal the estate tax and pass a new budget that allows for $106 billion in tax cuts  but we have to cut Medicaid because we can't afford it and social security is out the window too.

Oh, and also, you don't have to worry about private accounts because you can put the money in US Treasury bonds ... but that's what's in the Trust Fund, and they're just worthless IOUs.

Oopsie. 

// posted by Bell Curve

Anonymous said...

Explain this from your side of the world:
http://bronxpundit.blog-city.com/read/1236339.htm  

// posted by BronxPundit

Dr. Strangelove said...
This comment has been removed by a blog administrator.
Anonymous said...

BronxPundit is correct that the web-based "calculator" on some of the Democratic Party's official sites is very misleading. I have been unhappy with it for months. How can one possibly calculate the outcome of a plan to alter Social Security when Bush has not actually proposed a specific plan? The only part of Bush's plan that we knew about until recently--the privatization part--was poorly defined and anyhow, as we all know, privatization would not affect the solvency of the Social Security program.

The only way to increase funds in the Social Security system without introducing risk is to raise the payroll tax or draw from the general fund. That's basic economics. Since the general fund has been leeching hundreds of billions of dollars a year from the payroll tax over the past few decades, the repaying the favor seems quite reasonable. Repealing a portion of the Bush tax cut would more than do the trick.

It is embarrasing when Democrats feel they must resort to distortion of the facts to get their point across--the bad news that such Republican schemes have in store for ordinary Americans requires no magnification. Now, however, Bush is advocating specific, cuts in promised benefits  for all but the lowest-income workers. Now we can calculate the losses directly. 

// posted by Dr. Strangelove

Anonymous said...

The DNC didn't lose two elections by having good communications skills. Sheesh. 

// posted by LTG

Anonymous said...

From what I've heard Bush is proposing something very akin to means testing which I've always thought should be given serious consideration.

Privatization however would be merely a side show to the means testing. As reducing benefits to higher income people is what would be fixing the solvency problem. (I've posted before about how I think privatization overlooks the fact that higher rates of return are actually just risk premia - that is the higher return on a given dollar when the investment is cashed out is compensating for a higher probability of getting nothing back at all, as Dr. Strangelove said, basic economics). 

// posted by Raised By Republicans