Tuesday, May 03, 2005

Social In-security

Recognizing that Shrub’s plan to rape our Social Security system is going nowhere, his snake oil advisors have come up another plan which, can you believe it, claims to preserve social security benefits for the poor while soaking the rich. Remember, this is the same man who gave us the tax cuts for the wealthy while cutting federal funding for programs which aid the poor. It would be laughable if it weren’t so serious.

Bush’s proposal is a Social Security benefits scheme called “progressive price indexing.” A close examination of it reveals it is nothing more than a plan to slash middle-class benefits while hardly touching the wealthy and to eventually make it just another welfare program for the conservative ax to cut. Under this scheme, the benefits for the low-wage earner would remain at the current 49 percent of their wages before retirement. However, the average wage earner would feel real pain under his plan.

Jason Furman, of the Center on Budget and Policy Priorities has calculated the benefit cuts under Bush’s scheme as a percentage of pre-retirement income. An average worker making $37,000 who retires in 2075 would be cut 10% of his pre-retirement income. Workers earning $58,000 today would see their benefits cut to almost 13 percent of their incomes before retirement. Incomes above that would see less and less significant cuts. Workers earning three times the national average would face cuts of only 9 percent and someone making of the equivalent of $1 million today would see only a 1 percent cut of pre-retirement income.

Once again, the middle class would bear the major burden while the rich bear almost none. It’s also a good bet that the benefits for the poor would eventually be cut. It’s an old adage that programs for the poor always become poor programs: Programs defined as welfare become a prime target for budget cuts.

But that’s only half the story. Should the Bush scheme become law, it wouldn’t just cut benefits. Workers would also be encouraged to put a big portion of their payroll taxes into private accounts. In effect, this would be borrowing against their future benefits which would be reduced accordingly: Social Security for the middle class would gradually disappear. “For millions of workers, Mr. Furman writes, “the amount of the monthly Social Security check would be at or near zero.” Without middle class support, it’s very likely Social Security would loose its appeal and be looked at as just another welfare program.

The important point is to remember the neo-cons have an overriding agenda: Slash and burn every social welfare program. Republicans have never liked Social Security, none voted for it when it was first implemented, and this is the opening shot to destroy it. To paraphrase Shakespeare: Bush has come to bury Social Security; not to save it.