Hunting for an agenda, Bush has Social Security in his sights

By MARIANNE MEANS
SYNDICATED COLUMNIST
http://seattlepi.nwsource.com/opinio...2_means24.html


WASHINGTON -- In urgent need of some fresh ideas for a second term to present at the Republican Convention, President Bush is framing an economic message called "the ownership society."

That sounds swell. Who doesn't want to own the personally important things that make life comfortable?

But what exactly does the slogan mean? How do we get to this ideal society? The major policy incentives that advisers are saying the president should tout aren't really new. Unless some secret surprise is pending, it's old wine in a new bottle.

Despite a shaky economy and towering federal deficits, Bush hasn't yet had his fill of tax cuts to drain the federal treasury. Nor has he abandoned his theme of shrinking the size of federal government programs and services, even though such spending has vastly escalated during his watch.

A proposal to overhaul the tax code to achieve lower rates is also reportedly in the works. The shadow of Steve Forbes and his demand to kill the Internal Revenue Service still hovers. Bush isn't yet finished pandering to the rich.

Bush might propose a raft of tax credits to reward people for buying property, investing in stocks and bonds and putting their money in private health insurance or job retraining. The trouble with this, however, is that you have to have the money to do those things. If you don't, then you don't get a tax credit.

The pressure to spend now on current needs is compounded by the fact that the costs of most purchases are steadily going up but bank-account interest is bogged down at little more than 1 percent.

Bush is pushing for individually funded, tax-sheltered savings accounts that would compete with 401(k) plans and other employee accounts to which employers now contribute.

The centerpiece of this patchwork tax catchall, astonishingly, seems to be a revival of his 2000 campaign proposal to partially privatize Social Security. When the stock market went into a swoon, Bush stopped talking about the idea. But he raised the subject again in this year's State of the Union address and in his economic report to Congress in February.

Now he calls the concept "personal retirement accounts." He claims this Social Security "reform" would give individuals "control" over their own future -- as in control to blow it as well as protect one's retirement.

The plan would encourage workers to set up their own retirement accounts as vehicles to siphon off some of their payroll taxes that would normally go to support Social Security. Bush says that in the long run it could reduce the growth of Social Security and cut the benefits it provides.

He thinks that is a good idea. He's wrong. Reducing benefits is a terrible idea. Social Security is the bedrock of stability on which millions of retirees rely. And future retirees should have that security.

It is not irrelevant that these private accounts would also benefit the banks and financial institutions that contribute generously to Republicans.

Cast out of the federally guaranteed system, workers would pay fees to those industries for their investment advice and fund maintenance. And their investments would be subject to the ups and downs of the private marketplace, which has never promised the accountability that Social Security offers.

The Bushies claim that undermining Social Security would actually strengthen it and would neither change benefits for those "now in or near retirement" nor raise payroll taxes.

But the president's own handpicked 2001 Social Security commission couldn't agree on how to achieve those mutually contradictory goals. That's because it's impossible except through what Bush once called "fuzzy math."

Former GOP vice-presidential nominee Jack Kemp contends that Sen. John Kerry has an "economic vision deficit" -- apparently meaning he doesn't like Kerry's plan to eliminate much of the president's tax breaks for the very rich.

Kemp's solution, and that of other conservatives, is to urge Bush toward both bigger tax cuts and personal retirement accounts as a substitute for reliance on the Social Security system.

The devotion to tax cuts as the all-purpose answer to everything is as dangerous as it is shortsighted. A recent Congressional Budget Office study concluded that Bush's cuts had shifted more of the tax burden from the nation's rich to the middle class. And the big tax cut bears some responsibility for the federal budget deficit, now more than $400 billion this year and growing.

Vice President Dick Cheney once said deficits don't matter, but those hefty interest payments the government must pay suggests they do.

I may just vote for Bush.

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I wasn't born with enough middle fingers.

Sounds fine to me. We're all adults; we don't need the government running a piggy bank for us.

The line about the "right to blow it" was actually funny. Big Nanny Government at its finest. So, according to the Nanny theory I don't have the right to blow MY OWN MONEY! Gosh, what would I do without Nanny? Just die in the gutter, I guess. The fact is, the only way to save SS in the long run is to give everyone their own account. It seems stupid for me to pay benefits to others. Why can't they receive benefits from their own money? What kind of moron thought of that? The only way to make the system viable (if you must have it at all) is to make everyone pay into an account that belongs to them. If some people feel they are so stupid that they cannot handle their own money, let Nanny invest it. But at least make her invest your money for you, not mine.

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I wasn't born with enough middle fingers.

I disagree. When it comes to long range planning for retirement, the KNOWLEDGE required to successfully invest your savings, the DISCIPLINE required to create an adequate retirement, and the FUNDS available to the individual in order to actually contribute to this plan, a significant percentage of the population is NOT "adult" enough to succeed. What a plan like this would do is to create a brand new indigent class of Seniors. And these indigents would then fall to the government to rescue.
The stock market and other investment avenues are much too volatile and complex for the average waitress, or construction worker, or truck driver to maneuver successfully. And these folks don't have the extra cash to squirrel away in the first place. Most of them are just getting by from paycheck to paycheck.
I used to believe that having the freedom to dictate how Social Security finds would be invested was a great idea. And for me and many others, it might well be. But for what I would guess is a MAJORITY of Americans, it would be a catastrophe. I have changed my opinions considerably over time.

Under my plan you could have Nanny invest it if you wanted to. But if you were more savvy and actually wanted more than a 2% return you could invest it yourself.

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I wasn't born with enough middle fingers.

This is my reason for posting this article. Basically I agree with EuP that people should be allowed to control how much money is taken out of checks for retirement and where it should go, etc, but I think that the market has turned into a casino over the past 5-10 years where the house tends to gobble up those who don't understand the fluctuations and trends. I have an IRA that has been doing fine over the past 10 years, increasing quite steadily with some bumps here and there, but I've heard that a lot of folks that just invest into it without paying attention have lost their shirts. They don't even have what they put in let alone an increase in funds. This would be compounded if this were the only way to save for retirement. We have to remember that most Americans don't have the same understanding of the dollar as you do, especially those who need to worry about it most. Those who can't afford a financial advisor, ect.

Stekim, I agree that there should be a base plan that allows everyone to have the government invest their money for at least a 2-5% return no matter what. There has to be a plan that guarantees results for people who can't understand the way the market works. But like you said there should also continue to be plans for those who want to invest it themselves to try and get a better return on investements.

p.s. where are they going to draw the line at ending SS...at what age I mean?

Ok. I'm and adult, and I don't need the government running a piggy bank for me.

In reality I don't think it would ever end (unless it collapses under its own weight). But if they wanted to end it I think it's only fair to allow people who have paid into it to keep their benefits.

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I wasn't born with enough middle fingers.