Thursday, February 03, 2005

Don't Fear The Reaper

That's the name of a Blue Oyster Cult Song (covered recently by the Beautiful South). In President Bush's case that might be translated "Don't Fear the Potential Problems Huge Deficits might Cause down the Road." President Bush gave the State of the Union last night and, as you might expect, he put his Social Security plan front and center.
Fixing Social Security permanently will require an open, candid review of the options. . . .

I will work with members of Congress to find the most effective combination of reforms. I will listen to anyone who has a good idea to offer. (Applause.) We must, however, be guided by some basic principles. We must make Social Security permanently sound, not leave that task for another day. We must not jeopardize our economic strength by increasing payroll taxes. We must ensure that lower-income Americans get the help they need to have dignity and peace of mind in their retirement. We must guarantee there is no change for those now retired or nearing retirement. And we must take care that any changes in the system are gradual, so younger workers have years to prepare and plan for their future.
So there's at least one option he's not going to leave on the table; that of increasing revenue. One has to assume that this would also include the suggestion that we raise the $90,000 cap on Social Security taxes.

Salon's war room takes on this facet of the Bush mentality with some very pointed comments.
So that's the problem. Beginning in 2053, Social Security will either need to supplement its income or cut its expenses. It would be easy -- mathematically, if not politically -- to do either. The government could supplement Social Security's income by raising taxes or diverting funds from other programs, or it could cut Social Security expenses by reducing benefits. But George Bush doesn't like those kinds of choices. Again and again over the last four years, he has cut taxes and increased spending. When Joe Biden and John Kerry suggested that Bush pay for the war in Iraq by rolling back some of his tax cuts, the White House refused. Bush wanted the war, and he wanted the tax cuts, and he got both.

His Social Security proposal is of a piece. Bush said all sorts of options for repairing the system are "on the table," but then he took one off: The idea of raising Social Security taxes is not one he'll consider. Bush wants to let younger workers divert some of their Social Security taxes to individual investment accounts, but to do that he would need to come up with a way to pay the current benefits those taxes cover. He won't raise other taxes to do that, so the "transition costs" will simply be added -- by the trillion -- to the massive budget deficit Bush has built up over the last four years.
This kind of reminds me of how old Rush Limbaugh was talking right after the last election, when President Bush was swept into office. He kept going on and on about how now the adults were in charge once more. I have to admit it doesn't sound very "adult" to call for an enormous new program without considering how to pay for it. It doesn't sound very "adult" to rack up huge debts and pass them on to our children. But maybe Rush Limbaugh and I have different ideas of what constitutes adult behavior.

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