Bush Gets Real On Social Security Reform
By Vincent Fiore (05/05/05)
When President Bush hit the podium on Thursday night for this, his fourth-ever prime-time news conference, the long-knives of the establishment press and the Democratic Party were lying-in-wait for his plans for Social Security.
Brushing aside his critics, Bush fleshed out his vision of reforming Social Security by calling for a concept labeled “progressive indexing,” the brainchild of Democratic economist Robert Pozen.
In short, current benefits are indexed to keep pace with real-time wage growth, while Pozen’s plan calls for future benefits to essentially be indexed somewhere between a cost of living increase and inflation. The benefit result to individual retirees will depend upon the wages one earned throughout his or her working life. Pozen’s plan would not cut current benefits, but after the year 2012, it will cut the rate of future growth for benefits.
For low-wage earners, under $25,000, benefits will not be cut in growth at all. This accounts for 30% of the working public. For medium earners, around $36,000, the loss of benefits would be 28%. For the highest earners, the loss of benefits would be from 42% to 49%. That equates to 70% of future Social Security recipients receiving modest to little growth, with the burden falling upon the largest earners.
(www.latimes.com/news/printedition/asection/la-na-social30apr30,1,5975599.story?coll=la-news-a_section)
If Pozen’s plan of progressive indexing is adopted, some 70% of Social Security’s 12 trillion dollar, 75-year total future liability needs would be covered. That would still leave the program nearly 4 trillion dollars short of solvency; a hole that many economists feel can be made up through the second Bush staple of the reform package, personal accounts. (www.investors.com/editorial/issues.asp?v=5/1)
While there are still questions that need to be addressed in what some are calling a “means-tested” solution, it cannot be said that Bush lacks in political courage on this issue. Bush has answered his critics and detractors with a plan that cannot be pleasing to all, but a plan that nevertheless addresses both the solvency and reform aspects of Social Security.
No matter what you may think or hear regarding Social Security, the one maxim to remember is that the program is--with certainty--headed for insolvency sooner rather than later.
For there is no longer a debate on whether Social Security is on solid ground or not; Bush won that debate. The next debate is whether congressional Democrats will continue to politicize and pulverize any attempts by Bush to mend Social Security, all the while presenting nothing in the way of ideas and solutions.
By all reckoning, Democrats have dug in for a fight of epic proportions. But for all the heated talk coming from Democratic Party leaders and their surrogates, like the AARP and MoveOn.org, it was not always this way.
Indeed, it was not so long ago that this same Democratic Party, who now angrily lashes itself to the mast of the sinking Social Security Act of 1935, was loudly proclaiming the need for reform:
-“What should we do with the projected surplus? I have a simple, four-word answer: Save Social Security first.”-President Bill Clinton, State of the Union address, January 27, 1998.
-“Social Security faces a serious fiscal crisis…Save Social Security first.”-Vice President Al Gore, along with Senators Ted Kennedy (D, MA), Barbara Boxer (D, CA), House minority leader Dick Gephardt (D, MO), on the steps of Capitol Hill, September 25, 1998.
-“I am the one Democrat that truly believes that Democrats will not benefit by doing nothing on Social Security.” Rep. Charles Rangel (D, NY), January 21, 1999.
-“Fixing Social Security is an urgent priority” Sen. Byron Dorgan (D, ND), Roll Call magazine, December 6, 1999.
Democrats even called for the creation of private accounts through the introduction of the “Social Security Solvency Act of 1998,” by Senators Daniel Patrick Moynihan (D, NY) and Robert Kerrey (D, NE). This would have created personal savings accounts by diverting 2% of current payroll taxes into private accounts.
But, as the seers are wont to say, that was then, and this is now:
-“Social Security is secure for nearly 50 years, without any changes whatsoever.” House minority leader Nancy Pelosi (D, CA), December 20, 2004.
-“We have no crises.” Senate minority leader Harry Reid (D, NV), on ABC’s “This Week,” January 16, 2005.
-“Now we have the crises in terms of the funding of Social Security that is non-existent” Senator Ted Kennedy (D, MA), on CBS’s “Face The Nation,” January 16, 2005.
-“Social Security is not in crises, is not bankrupt, and is not collapsing.” Senator Barbara Boxer (D, CA), San Francisco Chronicle, February 11, 2005.
One doubts that Democrats will experience an epiphany--as they did in the late nineties--within the next four years in regard to solving the impending Social Security train wreck. That will have to wait until a Democrat occupies the White House. For as sure as green is to grass, the party on the left side of the aisle wants only the issue, and not the solution; any solution.
President Bush has put forward the skeleton of his plan, a skeleton that will be fleshed out as Rep. Bill Thomas (R, CA), chairmen of the House Ways and Means Committee, prepares for meetings in early May, while his counterpart in the Senate, Charles Grassley (R, IA), has already started his.
Democrats, as in 2002 and 2004, are content to play the role of obstructionist’ extraordinaire, a role that requires nothing in the way of thought, but everything in the way of process.
Social Security, judges, tax reform, or an energy bill, the strategy for the left since 2000 has always been one of anger-inspired delay, and--if they can bring themselves to it--pray for victory in the election.
For Democrats, it matters not that the scales of Social Security are balanced. No.
As long as a Republican resides at 1600 Pennsylvania Avenue, Democrats will be intractable in their resistance, and dense in their desire for needed change; 75 million future retirees be damned.
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