Phase-Out: In Prime Time!
We
finally saw a live press conference dealing with the issue of Social
Security, amongst other things. (The highlight of watching it on
NBC was seeing the Q&A session being cut off to make sure The Apprentice aired on time!)
Of
course, the post mortem analysis is being pored over today –
paricularly over the language of “progressive price indexing,” which
has been promoted over the last 60 days as a “gentle” benefit cut for
nearly all Social Security recipients, while maintaining that the
poorest of Americans would see no cuts.
That's
fine – but it gets to the root of what the GOP is trying to sell:
that Social Security is “just another government entitlement.” As
we've been stating here (and others have elsewhere), Social Security is
not
an entitlement – it's a genuine risk mitigation tool for the vast
majority of Americans who don't have trust funds or large assets to
fall back on.
Josh Marshall's take on the situation:
Social
Security's support of the poorest Americans is a critical part of what
it accomplishes. But Social Security is not poor relief. That is only
what Bush wants to make it – in part because, once it is, it
is far easier to cut further, since it has no organized political
constituency.
Social
Security is the sheet anchor of the modern American middle class. It's
why working Americans can approach retirement with an assurance of
security and a modicum of leisure. It stimulates economic vitality by
creating a floor of security that facilitates economic risk-taking in
investment and business. It's why parents don't have to shortchange
investment in children's education by supporting parents in their old
age. It provides economic security to families hit by catastrophe and
misfortune in mid-life. As I said, it's the sheet anchor of what we've
come to know in the last century as middle class life.
Kevin Drum also points out a CBPP analysis of the progressive indexing (“Pozen”) plan, as well as a chart showing what kind of benefit cuts are really being proposed:
Basically,
low income earners ($16K/year) currently get about 49% of their income
replaced by Social Security. Under the Pozen plan, this would stay the
same. Medium income workers ($36K/year), however, would see their
replacement rate fall from 36% to 23% by the year 2100. The replacement
rate for higher income workers ($58K/year) would fall to 14% and for
maximum income workers ($90K/year) to 9%.
That's
pretty substantial – even if it is projected far out into the
future. (It's probably a fairly safe bet that not many alive
today will be collecting Social Security in 2100.)
Of course, missing from the entire conversation was a discussion of how
to pay back the Treasury Bonds held by the SSA – except for vauge
notions that Treasury Bonds held by the SSA are just “pieces of paper
in a filing cabinet”, while privately held Treasury Bonds are a safe
investment.
The entire topic of deficit management – which is driving the need to dismiss Treasury Bonds as “IOUs” – was also missing.
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