Thursday, January 13, 2005

The Politics of Social Security

A good article about the Social Security by U.S. Senator Tim Johnson appeared yesterday. He writes a number of the main points that everyone should know.
...The central component of the program has always been that seniors would know exactly how much money they could expect every month. There would be no guessing game or fear of market crashes. Social Security was to remain a secure, guaranteed benefit.
...While the Social Security Trust Fund has a very long-term problem, it is not an immediate risk. According to the Congressional Budget Office, the Trust Fund remains solvent for nearly half a century, until 2052; and even after that, all recipients would continue to receive roughly 80 percent of today's Social Security buying power. This means we must work together on the best plan possible for future beneficiaries and not rubber-stamp the first plan floated.
...The [President's] scheme adjusts benefit levels based on consumer price indexing rather than wage indexing. This would leave beneficiaries with a smaller annual cost of living adjustment, or COLA, at a time when Medicare premiums are skyrocketing at nearly 17 percent per year.
...These changes and the resulting benefit cuts would apply to everyone, even people who chose not to set up a private account. Such a plan essentially results in a steep "retirement tax" on all seniors. Such a plan is not "reform" and it will not "strengthen" Social Security.
...Further, the privatization component of the plan doesn't fix the basic solvency problem for the Social Security Trust Fund. Rather, private accounts would throw the Trust Fund up to $2 trillion deeper in the red. Future generations would be tied down with this debt -- a debt we would likely be forced to borrow from countries like China and Japan.
...I believe that we must honor our promise to those who have worked hard and earned the right to a secure retirement that is safe and protected in their late years.
This has just the right mix of reasons based on facts and non-cognitive rhetoric used so effectively by Republican politicians.

On a related note, this issue of "defending the security of Social Security" could become a source of great advantage to Democrats (and all who oppose privatization) in some districts where (a) the incumbent is a Republican supporter of privatization and (b) the demographics of the district lean toward senior citizens, i.e., recipients of Social Security benefits. The Left Coaster has the details.


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