Bush's Latest Social Security Gambit: The Largest Benefit Cut in History

What has happened to the Democratic Party?

The President proposes a progressive benefits system for Social Security.  A system he got from a liberal economist.  A system that does not cut benefits for anyone, but slows their rate of growth for Americans with more money, and increases the rate of growth for Americans with less money.  Of all the things he has said regarding Social Security, this is by far the most consonant with the alleged philosophy of the Democratic Party.  After all, yours is the party that makes class warfare demagoguery routine. 

What is the response? Negative.  Are there any other ideas coming from Dems on Capitol Hill? No.  As the previous poster said, there are three things that can be done about Social Security -- cut benefits, raise taxes, or try to get a better return.  The President has offered a plan that does two of these three. (Only it doesn't really "cut" benefits, but slows the rate of increase.  If I offer you $1000 this year, and $1100 next year, have I cut your benefit?)  The only Democratic response is no, we won't talk until private accounts are off the table.

Since it is obvious that I came from this from a different perspective than many of the kool-aid drinkers that frequent this website, I want to ask a question.  What is so scary about letting poor Americans make financial decisions for themselves?  SSI reform doesn't help rich Americans, who already have alternative investment vehicles to fund their retirement.  Why do Jay Nixon, Jean Carnahan, and Roy Temple get the freedom to invest in the stock market to provide for their retirement but not the poorest among us who are instead forced to pay 12% of their income into a system that doesn't give them any tangible assets?  What happens if they die?  Their spouse gets little.  Their kids get nothing.  The cycle of poverty continues.  They never pull their way out.  But, if they're lucky to live long enough, the government will send them a piddling check every month to get by on.

I know, I know, we can't trust the stock market you say.  But let's do a thought experiment.  Imagine a Social Security system with only two workers per beneficiary.  If those beneficiaries are going to have any decent standard of living, the payroll taxes are going to have to be significantly higher than what they are right now.  Now imagine in that same scenario if the stock market goes bust.  What happens? People lose jobs at an enormous rate.  Now, instead of 2 to 1, we have 1.7 to 1.  What happens? We raise payroll taxes or cut benefits. 

The truth is that the party of the people is playing a shell game with the American public.  The goal is to get the President to propose raising taxes and cutting benefits without promising the carrot of personal accounts.  As soon as he does that, and he has Republican congressmen supporting him, the Democratic party will run on the "we told you so" ticket.  We told you he was gonna cut Social Security, we told you he would have to raise taxes.  Meanwhile, the Demos will stay not have a substantive plan for Social Security. 

The President was right last night when he said this should be something that is above politics as usual.  The stakes are too high for America's youth.  Your own political deity, Pres. Clinton, told us long ago that there were only three ways to get there from here.  The very idea of private accounts was tentatively suggested by Mr. Clinton himself, and supported fully by Democratic icon Sen. Moynihan, yet the current party is so wrapped up in Bush-hatred that it won't cooperate to solve one of the biggest problems this country has ever faced.

Please, WAKE UP DEMOCRATS! MAKE YOUR LEADERS PROPOSE SOMETHING SO SOMETHING CAN GET DONE!

Here's what gets me about all this SSI stuff.  For decades, Congress has been spending the surplus Social Security revenue collected each year to fund existing govt. operations.  It's a bad addiction.  If you stripped out this source of revenue from the current US Govt operating budget, the deficit would be much larger than it currently is and we never would have seen the balanced budget that we saw at the end of the Clinton years.  On the flip side, if Congress would allow the Social Security Administration to take those surplus FICA tax dollars and invest them in high grade debt or tax-free munis or U.S. treasuries, we wouldn't even be talking about a Social Security crisis given the current yields on those vehicles.  The problem is Congress is addicted to spending the surplus FICA revenues (because it's easy money) and they just keep writing IOUs.  There is no lockbox.  Maybe they should ask themselves "Is it good for the children?" because the status quo is not.

I don't see this as a Dem vs. Rep. issue.  I see this as a Gen X / Gen Y vs. Baby Boomer issue.  As Bill Clinton said back in 1996 when asked what the federal govt should do about preserving Social Security, "We have 3 choices.  Raise payroll taxes, cut benefits, or employ better performing investment vehicles to preserve the program."  I vote for the last choice.  Because if we don't select it, you can kiss any benefit (probably more than a 31% cut cited in the article) goodbye if you under the age of 40.

Why not give every citizen the option (strictly voluntary) to invest in a program like the Federal TSP Roy,  that I assume and hope you invested pre-tax dollars in when you were a Federal employee? 

All in all, we are headed for a train wreck and the more we delay on this with inaction, the more damage there will be.