Favorite

Bush's attack on Social Security 

People who said President Bush was out to scrap Social Security, not save it, were prophetic. When Bush last week finally offered a few details about his plan to prevent Social Security’s future insolvency, as he calls it, the historic compact among American workers began to disappear before our eyes. The president made it sound like a bonanza for young people and an even greater bargain for the working poor, but his rhetoric was just piffle. He misled in about every way that he could or else he did not grasp what the reformulation of benefits that he was embracing would actually do. Take your choice. For the first time, Bush came out for the progressive indexing of benefits, which means better-off retirees would see dramatic cuts in their regular Social Security pensions — a 21 percent reduction for medium-income earners (those taking in $36,000 today) and 31 percent for those with incomes greater than $59,000. If the workers opted for private accounts, their regular benefits would be cut even further — by a total of 66 percent for medium earners and 87 percent for the higher-income retirees. One little matter that the president did not explain very well — not at all really — was that when people diverted payroll taxes into private accounts they would have their defined benefits cut again by one dollar for each dollar transferred into the account plus an interest charge of 3 percent. But low-income workers would not have their benefits cut, unless they took one of the private account options the president offers. Bush made it sound like the poor would get higher benefits under his plan although they wouldn’t. John Tierney of The New York Times, an apologist for Bush, rhapsodized about it in a column reprinted in the Democrat-Gazette Tuesday. He praised Bush as a modern Robin Hood who wanted to “improve benefits for the poor” while cutting them for others. It was untrue. The poor just wouldn’t face the cuts others would. What Bush proposes is a two-tiered system, the traditional Social Security program and separate stock accounts that workers could opt to put a big chunk of their payroll taxes in (once in, they would be stuck in it for life). It would be designed so that the stock accounts would look more and more appealing, that is if the markets should ever shake the anemia of the George W. Bush economy, while traditional Social Security would look more and more like a bad deal. People over time would want to opt out of it entirely, and politically Social Security’s social insurance functions could not be sustained. Regular Social Security would look increasingly like a bad deal because the trust fund would bear the whole cost of paying for disabled workers and survivors of workers who died before retirement, which is a third of the Social Security payout. Social Security is a compact between workers of all classes and across generations that they will pay for each other’s unexpected life reverses. I said the president misled. Here’s an example. He started his news conference by announcing, “As a matter of fairness I propose that future generations receive benefits equal to or greater than the benefits today’s seniors get.” He was talking about inflation-adjusted benefits. Big deal! If absolutely nothing is done about Social Security, future generations will still get benefits equal to or greater than the benefits today’s seniors get. They won’t get what they’re promised now, but those benefits would be better than today’s benefits adjusted for inflation after the trust fund is exhausted, whether it is in 2041 or 2051. Bush said his private accounts would be merely what members of Congress have provided for themselves. That was a lie. “You’ve heard me say, I like to say this,” Bush said, “if it’s good enough for the Congress it is — it ought to be good enough for the workers, to give them that option.” But Congress and other federal employees can open private accounts in addition to Social Security, not in place of it. President Clinton and Democrats proposed that for other workers, but Bush rejects it. What was he thinking? Finally, Bush said that for young workers who were worried about the risks of investing their Social Security money in stocks — if they’ve followed the market since he has been president they should be worried — his plan would allow them to invest all the money instead in U.S. treasury bonds so that they would be guaranteed never to lose money. But they would be guaranteed to lose money that way. See, if they opt for private accounts their regular benefits would be reduced by a dollar for every dollar they put into private accounts, and they would be assessed an interest charge of 3 percent above the inflation rate. But 3 percent above inflation is all that Social Security actuaries project that treasury bonds will earn. Many analysts believe they will earn considerably less. So a worker investing in treasury bonds would be almost certain to lose his retirement benefits, not protect them. Would you leave your family’s future in this man’s hands?
Favorite

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

More by Ernest Dumas

  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • A little hope

    It may not be nearly as bad as you expect.
    • Nov 17, 2016
  • More »

Readers also liked…

  • Religion as excuse upends Constitution

    Tirades over religious liberty since the U.S. Supreme Court legalized same-sex marriages nationwide have awakened the ghost of James Madison, the author of the constitutional doctrine on the matter, and it isn't happy that his effort to protect religious inquiry in America is being corrupted.
    • Jul 9, 2015
  • Guns, God and gays

    Many more mass shootings like the one last week in Roseburg, Ore., will stain the future and no law will pass that might reduce the carnage. That is not a prediction but a fact of life that is immune even to Hillary Clinton.
    • Oct 8, 2015
  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015

Most Shared

  • Labor department director inappropriately expensed out-of-state trips, audit finds

    Jones was "Minority Outreach Coordinator" for Hutchinson's 2014 gubernatorial campaign. The governor first named him as policy director before placing him over the labor department instead in Jan. 2015, soon after taking office.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.

Latest in Ernest Dumas

  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • A little hope

    It may not be nearly as bad as you expect.
    • Nov 17, 2016
  • More »

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Recent Comments

  • Re: Worth it

    • And loyal, to a fault.

    • on December 6, 2016
  • Re: Worth it

    • Alas, Gene's memory ain't what it used to be. He wrote a column some time…

    • on December 5, 2016
  • Re: Forget identity politics

    • Hillarys 'Stronger Together' nonsense failed because she failed to make it a reality. As Gene…

    • on December 5, 2016
 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation