Bush as Robin Hood

NYT editorialized Democrats have good reason to be aghast at President Bush's new proposal for Social Security. Someone has finally called their bluff.

Ha Ha

They tried yesterday to portray him as just another cruel, rich Republican for suggesting any cuts in future benefits, but that's not what the prime-time audience saw on Thursday night. By proposing to shore up the system while protecting low-income workers, Mr. Bush raised a supremely awkward question for Democrats: which party really cares about the poor? For decades Democrats have pointed to Social Security as a triumph of communal generosity, proof that Americans (or at least non-Republican Americans) will work together to make sure that no widow is reduced to eating cat food. The program has been wonderful for liberals' self-esteem. What it has actually done for the poor is another matter.

It has kept them in poverty; depending on the government, with nothing to encourage them to try to better themselves.

It's true, as Democrats love to point out, that the poverty rate among the elderly has declined from 35 percent a half-century ago to 10 percent today. But when you consider how much money is being taken out of Americans' paychecks - most workers now pay more to Social Security than to the I.R.S. - you're entitled to wonder why there are any poor widows remaining. As a poverty-fighting program, Social Security is woefully inefficient because most of the money goes to people who aren't poor. It would take just 20 percent of what Social Security dispenses to move every elderly American out of poverty, according to June O'Neill, the former director of the Congressional Budget Office.

If the rich don't need Social Security, why give it to them?

Social Security has an image as a progressive program because low-income workers get back bigger monthly checks, relative to their salaries, than high-income workers do. They're also more likely to get disability benefits. But they lose out in other ways. They tend to start working and paying taxes at a relatively young age because they don't go to college, but then end up collecting benefits for fewer years because their life expectancy is shorter. They're more likely to be unmarried, making them ineligible for benefits earned by a spouse.

And if a portion of what they paid in taxes had gone to a personal account, that they could not draw from until they reached retirement age, they would have something they could leave to someone in their estate when they die.

"The amount of income-related redistribution in Social Security is a lot less than people think," said Jeffrey Liebman, a Harvard economist and a former official in the Clinton administration. "If you get the details right, you can design a personal-account retirement system in which groups with high risks of poverty in old age come out at least as well as with the current system."

So why are his fellow Democrats so dead set against it? Their usual answer has been that any move to privatization would doom the poor along with the whole Social Security program. If you let the middle and upper classes opt out and finance their own retirement, the argument has gone, there will be no political support for even the modest subsidies that Social Security now provides to low-income workers - just look at what Republicans did to welfare and public housing programs.

They turned them into programs that encouraged work, and thus helped people realize they could both gain self-respect and earn as much as they were willing to work for.

But the elderly poor are different from the younger poor. For one thing, they're more likely to vote, a fact not lost on even the most hardhearted Republican. They also arouse much more public sympathy. Kicking 25-year-olds off welfare was popular because it was thought to be good for them. Nobody claims that forcing that widow to eat cat food will build character. That's why even the most ardent free-marketeers are not trying to eliminate the safety net for the elderly. The libertarians at the Cato Institute are trying to strengthen it with a proposal that has been introduced by Republicans in Congress. If your individual account left you with a paltry pension, their plan would guarantee you a subsidy to lift you above the poverty line - and well above what many retirees are now getting from Social Security.

And Bush said from the very start that everyone that was currently retired, or who were close to retirement, would seen NO CHANGE in what they had been expecting

Democrats like to portray Mr. Bush as King George or Marie Antoinette. But on Thursday night, when he promised to improve benefits for the poor while limiting them for everyone else, he sounded more like Robin Hood, especially when he rhapsodized about poor people getting a chance to build up assets that they could pass along to their children.

It was the kind of talk you might expect to hear from a Democrat, except that Democrats don't talk about much these days except the glories of the New Deal. They know that Social Security doesn't even have the money to sustain a program that leaves millions of elderly people in poverty. But it's their system, and they're sticking to it.

Betsy Newmark blogged John Tierney thinks that Democrats are at risk of abandoning their self-image as the protectors of the poor.

John blogged President Bush can be his own best spokesman. For whatever reasons, he doesn't like doing press conferences. But if I were advising him, I would tell him to do a press conference every thirty days. He stands head and shoulders above his Democratic rivals, intellectually, politically, and morally. What I don't know is, was anyone watching?

Some will be upset about his suggestion that Social Security could be means tested, and understandably so, since if that proposal were enacted, the people who pay the most into the Social Security program will get the least out of it. Frankly, however, I think some kind of means test is inevitable. More than twenty years ago, I began retirement planning on the assumption that all of my Social Security payments have been a complete waste, and I will never get a nickel out of the program. I'm willing to accept that outcome, in exchange for a system in which everyone, not just upper-income workers, can save money and accumulate wealth instead of relying on checks from the government.

Kevin Drum blogged Bush didn't promise to improve benefits for the poor, he promised to keep them exactly the same as they are under current law while reducing them for everyone else. Cut the crap, John.

He did say "Seniors and people with disabilities will get their checks; all Americans born before 1950 will receive the full benefits.... benefits for low-income workers will grow faster than benefits for people who are better off... If you work hard and pay into Social Security your entire life, you will not retire into poverty."

pblsh commented Bush didn't promise to improve benefits for the poor, he promised to keep them exactly the same as they are under current law while reducing them for everyone else.

No, his proposal makes the poor worse off than they would. He wants to price index their benefits instead of wage indexing them.

Both statements are false. Current law has benefits increasing over time for all recipients. He said Current Law would prevail for poor retirees, which means they will continue to improve based on wage indexing (current law), and that for others they would increase, but just not as much (i.e. indexed on prices (inflation) not wages).

af commented Don't let the Republicans confuse you with their misguided interpretation of Democratic ideas. This idea that Bush's proposal on Social Security is progressive is about as accurate as the "rewriting" Congress is doing of Democratic amendments. It is true that we like the progressive income tax. There, everyone who can afford to give, gives something--according to their means. And while the rich give more, they also get more.

"From each according to his abilities, to each according to his needs." That is what Karl Marx said

But we don't like so-called "progressive Social Security plan," where the poor and the middle class give everything and the rich can opt out and give nothing at all.

That is not what Bush proposed. He proposed that a percentage of everyone's SSI tax (poor, middle class, and wealthy) would go into a personal account that the government could not touch, and that what a person received when they retired would be means tested, i.e. those better off would not receive as many increases as the poor would receive.

Duh. Democrats think some programs should be universal as well as progressive. I haven't heard anyone suggest lately that the poor should pay to have their garbage collected while the rich could "opt out." (In towns where garbage collection is a public responsibility, what would they do? Skip every other house in a neighborhood?)

If such a town existed, I would presume the rich would have to pay for a private hauler, but if they did, and were not having their trash picked up by the city, why should they pay to have other trash picked up. In point of fact, I believe many cities charge for trash pickup along with the water bill, so it is either a fixed amount for everyone, or if it is tied to water consumption, those that use more water (like to fill their swimming pools) would pay more

On second thought, maybe if Republicans really understood Democratic plans, they'd like them better.

I doubt it.

W. Kiernan commented Listen. There is a "Democrat plan" for Social Security. It's real simple and compact too, so simple even a halfwit like yourself can probably wrap his mind around it, and it goes like this: for the next three years do absolutely nothing to Social Security. Because, given both the breathtaking fiscal incompetence of this Administration and their nakedly obvious motivation-to-wreck, anything, anything, that these thieving gutter trash inflict upon the Social Security system will make it worse.

That is a foolish plan, because if you scream for 3 years it does not need fixing, with the hope you will get a Dem in the White House, even if that happened he/she would not be able to do a thing, because anything he/she tried would find the tapes of "it does not need fixing" bounced right back.