Slice:
...you have to carefully check out any scheme coming from the White House. You can't just accept the administration's version of what it's doing. Remember, these are the people who named a big giveaway to logging interests "Healthy Forests."
Sure enough, a close look at President Bush's proposal for "progressive price indexing" of Social Security puts the lie to claims that it's a plan to increase benefits for the poor and cut them for the wealthy. In fact, it's a plan to slash middle-class benefits; the wealthy would barely feel a thing.
Under current law, low-wage workers receive Social Security benefits equal to 49 percent of their wages before retirement. Under the Bush scheme, that wouldn't change. So benefits for the poor would be maintained, not increased.
The administration and its apologists emphasize the fact that under the Bush plan, workers earning higher wages would face cuts, and they talk as if that makes it a plan that takes from the rich and gives to the poor. But the rich wouldn't feel any pain, because people with high incomes don't depend on Social Security benefits.
Cut an average worker's benefits, and you're imposing real hardship. Cut or even eliminate Dick Cheney's benefits, and only his accountants will notice.
...In short, this would be a gut punch to the middle class, but a fleabite for the truly wealthy.Beyond that, it's a good bet that benefits for the poor would eventually be cut, too.
...If the Bush scheme goes through, the same thing will eventually happen to Social Security. As Mr. Furman points out, the Bush plan wouldn't just cut benefits. Workers would be encouraged to divert a large fraction of their payroll taxes into private accounts - but this would in effect amount to borrowing against their future benefits, which would be reduced accordingly.As a result, Social Security as we know it would be phased out for the middle class.
"For millions of workers," Mr. Furman writes, "the amount of the monthly Social Security check would be at or near zero."
2 comments:
I can't agree with you more!
Please take a look at my post on Private accounts. I propose that Bush's private accounts are part of a two step process to eliminate Social Security. First step is to get people to agree to put money into Social Security. Step 2 is to tell the American People that they are stupid for having the government handle their money. The means testing adds an additional way to kill the program. By doing this they begin to make Social security into just another welfare program, and they will loose the political support of the middle and upper classes.
http://drforbush.blogspot.com/2005/04/private-accounts.html
Social Security: ''Time to Leave the Table''
By E. J. Dionne Jr.
Washington Post, Tuesday, May 3, 2005
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The real costs of progressive indexing as currently conceived would be paid by middle-income earners -- those with incomes in the range of $35,000 to $60,000 a year.
Eventually, such earners would face benefit cuts of 20 to 30 percent from what they are promised under the current program. And it gets worse: Rising Medicare premiums are eating up an increasing share of middle-class Social Security checks. Even without the cuts, Social Security payments will, over time, barely cover an individual's Medicare costs.
Last, there are the trillions of dollars that Bush would have us borrow to cover the transition to the private accounts he wants to set up. It's far from clear that cutting future Social Security benefits for younger members of the middle class and saddling them with mounds of new indebtedness would make either them or the country better off. Anyone who is truly conservative might have a question or two about whether this "solution" is worse than the problem it is purportedly addressing.
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