Bush slipped Social Security privatization into his budget proposal
The Green-Dog Democrat Alert* "Once a government is committed to the principle of silencing the voice of opposition, it has only one way to go, and that is down the path of increasingly repressive measures, until it becomes a source of terror to all its citizens and creates a country where everyone lives in fear." Harry S. Truman
February 8, 2006
Bush slipped Social Security privatization into his budget proposal
Hello from the Green Dog --
Here are some observations and a question based upon information in the February 8, 2006 Newsweek article below:
From the article --
"His (Bush's SS privatization) plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years."
Observation/Question --
It would seem safe to assume that the $700 billion would be money lost to meeting obligations to current retirees (who are paid from current SS contributions). Would that result in those retirees -- who would not have private accounts -- receiving lower benefits to help pay for those private accounts?
From the article --
"(In his SOTU address) he seemed to be kicking the Social Security problem a few years down the road in typical Washington fashion when he asked Congress 'to join me in creating a commission to examine the full impact of baby-boom retirements on Social Security, Medicare and Medicaid,' adding that the commission would be bipartisan 'and offer bipartisan solutions.'
"But anyone 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."
Observation --
It appears that George Bush is still playing shell games with the American public and still determined to meet the political right's objective of overturning Social Security instead of fixing it.
From the article --
"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."
Observation --
Last year it was determined that privatization won't fix the problem that Social Security faces way down the road. And it still won't. (Be sure to read the Green Dogs on Social Security that are linked in the postscript that follows the article below.)
Please be sure to delete the to/from/date block when you forward this to EVERYONE in your e-mail address book. This ALERT is for everyone, including those who may not care too much for it. They need to read it, anyway. Thanks.
The Green-Dog Democrat
Slight of hand Bush buried detailed Social Security privatization proposals in his budget. Can the surprise move jump-start bipartisan reform?
By Allan Sloan Newsweek February 8, 2006
IF YOU READ enough numbers, you never know what you'll find. Take George Bush and private Social Security accounts.
Last year, even though Bush talked endlessly about the supposed joys of private accounts, he never proposed a specific plan to Congress and never put privatization costs in the budget. But this year, with no fanfare whatsoever, Bush stuck a big Social Security privatization plan in the federal budget proposal, which he sent to Congress on Monday.
His plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years.
If this comes as a surprise to you, have no fear. You're not alone. Bush didn't pitch private Social Security accounts in his State of the Union Message last week.
First, he drew a mocking standing ovation from Democrats by saying that "Congress did not act last year on my proposal to save Social Security," even though, as I said, he'd never submitted specific legislation.
Bipartisan Solutions?
Then he seemed to be kicking the Social Security problem a few years down the road in typical Washington fashion when he asked Congress "to join me in creating a commission to examine the full impact of baby-boom retirements on Social Security, Medicare and Medicaid," adding that the commission would be bipartisan "and offer bipartisan solutions."
But anyone 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.
Duffy said privatization costs were included in the midyear budget update that the Office of Management and Budget released last July 30, so it was logical for them to be in the 2007 budget proposals. But I sure didn't see this coming—and I wonder how many people outside of the White House did.
Nevertheless, it's here. 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.
Size of Reductions?
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.
Bush is right, of course, when he says in his budget proposal that Social Security in its current form is unsustainable. But there are plenty of ways to fix it besides offering private accounts as a substitute for part of the basic benefit.
Bush's 2001 Social Security commission had members of both parties, but they had to agree in advance to support private accounts. Their report, which had some interesting ideas, went essentially nowhere.
What remains to be seen is whether this time around Bush follows through on forming a bipartisan commission and whether he can get credible Democrats to join it. Dropping numbers onto your opponents is a great way to stick your finger in their eye. But will it get the Social Security job done? That, my friends, is a whole other story.
Sloan is NEWSWEEK's Wall Street editor. His e-mail is sloan@panix.com. http://www.msnbc.msn.com/id/11235990/site/newsweek/
Postscript
The Green Dog has visited the Social Security issue in past "issues" that contain many articles and commentaries and links to other articles and important data. They are posted at http://www.eurolegal.org/greendogdem/greendogdem.htm --
October 4, 2004 -- REDUX: On Social Security, Al Gore was right December 8, 2004 -- A faux crisis and Social (In)Security for Baby Boomers and others December 22, 2004 -- More on Bush's and the "conservatives'" Social (In)Security January 9, 2005 -- Are greed and ideology behind the bum's rush on Social Security "reform"? January 10, 2005 -- Addendum to "Are greed and ideology behind the bum's rush on Social Security 'reform'?" January 22, 2005 -- Lies, damned lies, and anti-truths about SS, WMDs & ETC. January 30, 2005 -- Bush's Social Security: Reduced benefits, unfixed shortfall February 17, 2005 -- Them Social Security numbers just don't cipher right, George February 28, 2005 -- American moral, civic, civil, and religious values and Social Security April 26, 2005 -- Britain's bloody "social security" mess May 31, 2005 -- Social Security plan that is financially devastating for women (and kids)
Past "issues" of The Green-Dog Democrat from June, 2004 through recent are posted at the highly informative website Eurolegal Services at http://www.eurolegal.org/greendogdem/greendogdem.htm. From the site's home page, one can explore much information posted on British, American, and other international politics and public affairs; international terrorism; and more.
PAY ATTENTION: A Eurolegal Services page has many articles and literally dozens of links to thoughtful articles, essays, and commentaries on the constitutional crisis that the U.S. faces because of Bush's "imperial-presidency" actions and plans -- and on the growing opinion that Bush's imperiousness is impeachable. It's at http://www.eurolegal.org/useur/prerogativeabuse.htm
© Virginia Metze
February 8, 2006
Bush slipped Social Security privatization into his budget proposal
Hello from the Green Dog --
Here are some observations and a question based upon information in the February 8, 2006 Newsweek article below:
From the article --
"His (Bush's SS privatization) plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years."
Observation/Question --
It would seem safe to assume that the $700 billion would be money lost to meeting obligations to current retirees (who are paid from current SS contributions). Would that result in those retirees -- who would not have private accounts -- receiving lower benefits to help pay for those private accounts?
From the article --
"(In his SOTU address) he seemed to be kicking the Social Security problem a few years down the road in typical Washington fashion when he asked Congress 'to join me in creating a commission to examine the full impact of baby-boom retirements on Social Security, Medicare and Medicaid,' adding that the commission would be bipartisan 'and offer bipartisan solutions.'
"But anyone 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."
Observation --
It appears that George Bush is still playing shell games with the American public and still determined to meet the political right's objective of overturning Social Security instead of fixing it.
From the article --
"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."
Observation --
Last year it was determined that privatization won't fix the problem that Social Security faces way down the road. And it still won't. (Be sure to read the Green Dogs on Social Security that are linked in the postscript that follows the article below.)
Please be sure to delete the to/from/date block when you forward this to EVERYONE in your e-mail address book. This ALERT is for everyone, including those who may not care too much for it. They need to read it, anyway. Thanks.
The Green-Dog Democrat
Slight of hand Bush buried detailed Social Security privatization proposals in his budget. Can the surprise move jump-start bipartisan reform?
By Allan Sloan Newsweek February 8, 2006
IF YOU READ enough numbers, you never know what you'll find. Take George Bush and private Social Security accounts.
Last year, even though Bush talked endlessly about the supposed joys of private accounts, he never proposed a specific plan to Congress and never put privatization costs in the budget. But this year, with no fanfare whatsoever, Bush stuck a big Social Security privatization plan in the federal budget proposal, which he sent to Congress on Monday.
His plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years.
If this comes as a surprise to you, have no fear. You're not alone. Bush didn't pitch private Social Security accounts in his State of the Union Message last week.
First, he drew a mocking standing ovation from Democrats by saying that "Congress did not act last year on my proposal to save Social Security," even though, as I said, he'd never submitted specific legislation.
Bipartisan Solutions?
Then he seemed to be kicking the Social Security problem a few years down the road in typical Washington fashion when he asked Congress "to join me in creating a commission to examine the full impact of baby-boom retirements on Social Security, Medicare and Medicaid," adding that the commission would be bipartisan "and offer bipartisan solutions."
But anyone 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.
Duffy said privatization costs were included in the midyear budget update that the Office of Management and Budget released last July 30, so it was logical for them to be in the 2007 budget proposals. But I sure didn't see this coming—and I wonder how many people outside of the White House did.
Nevertheless, it's here. 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.
Size of Reductions?
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.
Bush is right, of course, when he says in his budget proposal that Social Security in its current form is unsustainable. But there are plenty of ways to fix it besides offering private accounts as a substitute for part of the basic benefit.
Bush's 2001 Social Security commission had members of both parties, but they had to agree in advance to support private accounts. Their report, which had some interesting ideas, went essentially nowhere.
What remains to be seen is whether this time around Bush follows through on forming a bipartisan commission and whether he can get credible Democrats to join it. Dropping numbers onto your opponents is a great way to stick your finger in their eye. But will it get the Social Security job done? That, my friends, is a whole other story.
Sloan is NEWSWEEK's Wall Street editor. His e-mail is sloan@panix.com. http://www.msnbc.msn.com/id/11235990/site/newsweek/
Postscript
The Green Dog has visited the Social Security issue in past "issues" that contain many articles and commentaries and links to other articles and important data. They are posted at http://www.eurolegal.org/greendogdem/greendogdem.htm --
October 4, 2004 -- REDUX: On Social Security, Al Gore was right December 8, 2004 -- A faux crisis and Social (In)Security for Baby Boomers and others December 22, 2004 -- More on Bush's and the "conservatives'" Social (In)Security January 9, 2005 -- Are greed and ideology behind the bum's rush on Social Security "reform"? January 10, 2005 -- Addendum to "Are greed and ideology behind the bum's rush on Social Security 'reform'?" January 22, 2005 -- Lies, damned lies, and anti-truths about SS, WMDs & ETC. January 30, 2005 -- Bush's Social Security: Reduced benefits, unfixed shortfall February 17, 2005 -- Them Social Security numbers just don't cipher right, George February 28, 2005 -- American moral, civic, civil, and religious values and Social Security April 26, 2005 -- Britain's bloody "social security" mess May 31, 2005 -- Social Security plan that is financially devastating for women (and kids)
Past "issues" of The Green-Dog Democrat from June, 2004 through recent are posted at the highly informative website Eurolegal Services at http://www.eurolegal.org/greendogdem/greendogdem.htm. From the site's home page, one can explore much information posted on British, American, and other international politics and public affairs; international terrorism; and more.
PAY ATTENTION: A Eurolegal Services page has many articles and literally dozens of links to thoughtful articles, essays, and commentaries on the constitutional crisis that the U.S. faces because of Bush's "imperial-presidency" actions and plans -- and on the growing opinion that Bush's imperiousness is impeachable. It's at http://www.eurolegal.org/useur/prerogativeabuse.htm
© Virginia Metze
rudkla - 9. Feb, 10:51
