Monday, May 23, 2005

I was wrong about Bush

Recently I thought Bush might have accidentally done the right thing in his Social Security pitch. Unfortunately, I was wrong, as A Gut Punch to the Middle gently reminds us:
Sure enough, a close look at President Bush's proposal for "progressive price indexing" of Social Security puts the lie to claims that it's a plan to increase benefits for the poor and cut them for the wealthy. In fact, it's a plan to slash middle-class benefits; the wealthy would barely feel a thing.

The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000 today, would see benefit cuts equal to almost 13 percent of their income before retirement.

But above that level, the cuts would become less and less significant. Workers earning three times the average wage would face cuts equal to only 9 percent of their income before retirement. Someone earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement income.

In short, this would be a gut punch to the middle class, but a fleabite for the truly wealthy.

If the Bush scheme goes through, the same thing will eventually happen to Social Security. As Mr. Furman points out, the Bush plan wouldn't just cut benefits. Workers would be encouraged to divert a large fraction of their payroll taxes into private accounts - but this would in effect amount to borrowing against their future benefits, which would be reduced accordingly.

As a result, Social Security as we know it would be phased out for the middle class.

No, this is about ideology: Mr. Bush comes to bury Social Security, not to save it. His goal is to turn F.D.R.'s most durable achievement into an unpopular welfare program, so some future president will be able to attack it with tall tales about Social Security queens driving Cadillacs.

I guess it's my own fault. I should know by now that when the Bush administration talks about inconveniencing the wealthy and helping the poor, they really mean hitting the upper middle class and hands-off the poor. Actually hindering the truly wealthy, in any way at all, is so ideologically inconceivable that it never enters consideration.

2 comments:

  1. Chris5:30 PM

    I thought I should post a comment, just because it's the right thing to do. I will say, Eric, that to believe, still, the Bush Administration's lies, is sorta frightening.

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  2. It won't happen again. I thought maybe they'd stumbled on something advantageous to the working class, or an honest statement of intent. You know, like even a stopped clock being right twice a day? Consider me duly shamed.

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