Bush's Big Gamble

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The President took to TV this week to try to shore up his and the GOP Congress' poll numbers damaged by his privatizing of Social Security plan. He proposed a plan to save Social Security by cutting benefits. And why is cutting benefits necessary? So that taxes could be cut, yet again. The goal has not changed. The President is still intent on dismantling Social Security. This is just another approach to do so piecemeal, which permits him to lie through his teeth using the words, "Our duty to save Social Security begins with making the system permanently solvent..."

I must however applaud the President for the appearance of his approach. What he proposes is means testing benefits. This means wealthier Americans won't receive as much benefits while poorer Americans will receive full benefits. I agree with means testing benefits as a method toward keeping S.S. solvent. But the President's proposal is a half measure. If means testing benefits paid out is a good thing, then do it all the way. Those who don't need Social Security checks to retire comfortably should not get any benefit payments. Why this half way measure of reducing benefits for the well off? Save the damn program and reject retirement benefits for the well off entirely, Mr. President.

I must also applaud the President for getting some facts right this time. He said: "In 2017, the system will start paying out more in benefits than it collects in payroll taxes. Every year after that, the shortfall will get worse, and by 2041 Social Security will be bankrupt." Well, 2/3 of it is right anyway. Yes, around 2017 the government will start paying out more than it takes for the S.S. program. And yes, around 2041, the surpluses will be used up. However, the President still wants to play that panic card by saying the system will be bankrupt in 2041. That is simply not true. On and after 2041, the program will still be taking in sufficient revenue to pay out about 3/4 of the benefits it now does to each qualified person. Therefore, the worst case scenario is NOT bankruptcy; it is simply a reduction in benefits.

This brings us to the fatal flaw in the President's proposal. His committment to reducing taxes stands in the way of actually saving the Social Security program, (all his words to the contrary). What he is really doing is nothing more than an offset. He will reduce benefits for the wealthy while giving them a tax cut in return. This does nothing to save the Social Security insolvency, which is really nothing more than the government not having enough revenues to keep the system afloat. So how does cutting taxes help? It doesn't.

Then of course, the President's hand was revealed when he said a goal of Social Security reform must include privatized accounts. That single statement of intent spells the death knell for the entire Social Security program which was, and is, the President's intent all along. Pressured by his anti-social program conservatives, he will deliver the end of the Social Security program by bankrupting it and the US government. Privatizing any part of Social Security means revenues needed to support the program will be diverted elsewhere - to Wall Street, specifically. It also means the Social Security program runs out of money for full benefit payments, even as benefits are reduced and cut, even sooner than the 2041 year if all is left alone. So the facts speak volumes of the President's real intent. He wants to bankrupt the Social Security system and end it altogether which his proposals will accomplish.

In a nutshell, you can't take a program that is going to one day run short of money, and propose to fix it by diverting the revenues coming into the program to another program. That is what privatizing a part of Social Security does. It diverts revenues needed by Social Security to another program called private savings accounts. Either the Social Security program goes belly up sooner or the US government has to raise taxes significantly to make up the shortfall. Now we know the President does not intend to raise taxes. So the the picture could not be clearer as to the President's true intent.

His big gamble is that the American voters will not revolt against Republicans in the 2006 elections as a result of their plan to end the Social Security and Medicare/Medicaid programs through fiscal mismanagement of these programs. It is a gamble that will cost him nothing, he can't be reelected. The gamble is that the American people will listen to his rhetoric instead of the facts. He says he wants to save the program. But, his actions say he wants to end it. Which will the majority of Americans believe? If the recent polls are any indication, (see links in 1st paragrapah of my previous article), the American people are smarter than the President gives them credit for.

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This page contains a single entry by David R. Remer published on April 29, 2005 1:58 PM.

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