Social Security Reform
The GOP PR machine has been working this issue for months, but
the American people aren't buying it. The more Bush talks
about private accounts and the "crisis in Social
Security, the more Americans turn against his proposal. The
fact is that private accounts will actually make the funding
problem worse. Not even the GOP propaganda machine can
overcome this simple mathematic fact.
Bush has been trying to convince
Americans that Social Security is in crisis, and that private
accounts are the only solution. Laura Tyson points out in Business Week
that this is nonsense.
Sure, the system needs to be adjusted, but the problem is not
nearly as extreme as Bush would have you believe. Money quote:
"[A]ccording to the most recent report by the Trustees of Social Security, even under the cautious assumption that the U.S. economy grows at the anemic rate of 1.6% a year, the revenues into Social Security from the current level of payroll taxes will cover promised benefits for another 38 years and will be enough to finance about 70% of benefits through 2078. The net present value of the shortfall in revenues over the next 75 years is $3.7 trillion, only about one-third of the net present value of the Bush tax cuts of 2001 and 2003 and about 0.7% of gross domestic product projected for the same period. An immediate payroll tax increase of about 2% would eliminate this gap. So would paring the Bush tax cuts of 2001 and 2003 back by less than 50%, and transferring the added revenues to Social Security."
The key here is that the system can be fixed with minor
adjustments. Many Republicans are starting to express doubts
about Bush's plans. That said, we can't underestimate
Bush's political skills. He and Karl Rove love to take on
conventional wisdom. Democrats need to stay united on this
issue. (Updated 4/24/05 by G. Orlando)
Some of the best reporting on this subject from the left
is at TalkingPointsMemo.com.
Josh Michael has been dissecting the "proposals"
coming from the Bush Administration and pointing out how
private accounts will gut the trust fund.
Commentary:
E. J. Dionne, Jr. ridicules
Bush's new "progressive indexing" plan by calling it
a "cut
and privatization project," pointing out that Bush is
rigging the game by not putting his own tax cuts on the table.
Dionne explains how the Social Security shortfall is dwarfed
by the revenue losses caused by the tax cuts. He argues that
the Dems are correct in walking away from this game.
Jonathan Alter explains
how Bush's proposals will undermine
Roosevelt's vision of Social Security.
Brit Hume gets in hot water after distorting
an FDR quote to imply that FDR would have supported Bush's
current proposals on Social Security.
Around the Web:
Jonathan Weisman
reports on some of the alternative
proposals floating around on Social Security reform.
News:
In
GOP, resistance to Social Security reform
(WP)
Comments, questions and suggestions can be sent to Gerardo
Orlando at editor@orlandoreport.com.
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