Wednesday, April 27, 2005

Bush Social Security Road Show a Failure

Remember...there is no crisis in Social Security.
From the Center for American Progress....

President Bush's two-month road trip to sell his Social Security privatization plan has been a dramatic failure. Rather than unifying the public around his ideas, Americans are far more skeptical of his privatization plans than before and senior members of his own party are raising significant doubts about the proposal.

Speaking at the Senate Finance Committee's first day of hearings on Social Security privatization, Sen. Olympia Snowe (R-ME) stated that she didn't want to change "the foundation for our seniors," and Sen. Craig Thomas (R-WY) expressed concern about the record debt required to finance the president's proposal.

Senators are right to challenge Bush's assumptions: his proposal for private accounts would worsen Social Security's solvency; it requires massive new government debt; and it would force deep cuts in guaranteed benefits.

Privatization requires trillions of dollars in new debt, worsening Social Security's solvency and placing huge burdens on future generations. The hearings on different options to privatize Social Security showcase the underlying irresponsibility of these proposals. Each plan would require trillions of dollars in transfer from general revenue to Social Security without ever specifying where the money would come from. In the extreme, Social Security's currently shortfall would be doubled.

Privatization means cuts in guaranteed benefits and less wealth for retirees. Any attempt to reign in runaway deficits required to create private accounts under Social Security results in massive benefit cuts. Each successive generation of retirees would see larger cuts. Even the Congressional Budget Office estimates that workers would be better off under an unchanged Social Security system than under a privatized one.

There are better ways to help Americans achieve a secure retirement. Progressive solutions to retirement security offer much better options for America's seniors. To improve Social Security's solvency, the earnings cap (above which wages are not subject to the Social Security tax) could be raised. Social Security could receive fully funded general revenue transfers.

Massive tax cuts for the wealthy could be repealed and committed to Social Security. To create real wealth, savings options outside of Social Security could be made simpler, with more tax incentives for middle class families, at lower costs, and at reduced risks than is currently the case.

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