2005-05-05
The Great Gamble: Bush Aims at Boomers' Benefits
It seems that George W. Bush is so desperate to revive his moribund effort to dismantle social security by privatizing it that he is willing to do or say almost anything in order to accomplish it. As the stunning failure of the propaganda campaign to scare Americans into accepting the destruction of social security became clear - the polls all showed the more people learned about the administration's plans for social security the less they approved of them - Bush's statements reached new levels of absurdity.
A few weeks ago, as part of the fear campaign, the president said that US Treasury bonds, backed by "the full faith and confidence of the United States government," were nothing but "worthless IOU'S." The good news is that no one believed him. Billions of dollars worth of these bonds are held by Americans and by foreign governments and individuals. Had these investors taken the president seriously and sold their Treasury bonds, the result would have been catastrophic for the U.S. and world economies. The bad news is that we have a president so willing to distort reality - grotesquely - in order to advance his policies that no one takes him seriously.
Last week, in order to sell his social security scheme, the president said something even more unthinkable than asserting that the full faith and confidence of the United States is worth nothing; he said that he wanted to cut the poor a break. Had the conservative Republicans who run the country now, and who for the last four years have waged a relentless class war on behalf of the rich and against the poor and the middle class, experienced a conversion? Have Karl Rove and the other "people of faith" who lead or follow this administration stumbled upon the "eye of the needle" passage while scouring the Bible for messages about sex and sin?
Not at all: as usual with this administration, it's all smoke and mirrors, spin and sleight of hand. The president's proposal does not benefit the poor at all. Under the administration's plan, the poorest workers would receive exactly what they are entitled to now. The ballyhooed progressive tilt of the President's social security proposal is fake, camouflage intended to hide the real thrust of this false reform: a massive cut in benefits that will affect 70 percent of future social security recipients.
It's a body blow to the middle class in the guise of compassion for the poor. The administration's magnanimity amounts to this: the poorest 30 percent of retirees will be spared the hurt to be inflicted on the other seven tenths.
The president's rhetoric about imposing greater sacrifices on wealthier retirees is grossly misleading. Bush's plan would hit the middle class hard while those who the president once described as "the haves and the have mores" and whom he called "my base" will hardly feel the pain. These folks don't depend on social security; they live from investment income. And, the Republicans are planning additional tax breaks on top of the fabulous fiscal benefits they have already provided for those whose money works for them.
This much is now clear: the intensity of the president's desire to take a gigantic leap toward the privatization of social security is such that he is willing to take a major bite out of the retirement of a huge constituency, namely middle class baby boomers. This is an enormous political gamble, one that probably can't be explained solely by the administration's very real desire to reward Wall Street for its unstinting financial and political support.
Bush's war on social security as we know it, his ploy to use the readjustment of the system - necessary to respond to the aging of the population - as a tool to undermine its philosophical foundations and political support reflect a fanatical ideological commitment to a seamlessly capitalist world as well as a burning hostility to any part of the welfare state that is still standing.
Ideological zealotry can lead to political disaster - when and if citizens finally wake up. The increasing resistance of the American people to Bush's intense and opportunistic arguments - the president has suggested social security is bad for blacks because they have lower life expectancy - and his plunging approval ratings may be an indicator this is happening. The president and his political wizard, spinner-in-chief Karl Rove, may have blundered badly this time. Because, if the American people disliked privatization, they are going to hate what the president is offering now.
What the Democrats have said all along and the Republicans have long denied has been revealed to be true. The president's plan is to cut benefits to pay for privatization. The administration's attempt to disguise a cut in benefits as an adjustment in the formula for indexing payments is unlikely to fool many people, even red state Republicans. It's one thing to manipulate people's fears in order to wage war against foreign demons; it's another to concoct crises in order to pick their pockets.
The president's attempted grab of middle class social security benefits is a golden opportunity that can't help but stiffen the spine of Congressional Democrats, who have been unusually united and vigorous in their defense of the program. What the Democrats lack is an alternative social security proposal to unite behind and to shield them from Republican accusations that they mere naysayers and obstructionists.
A Democratic reform to fix social security needs to be simple, fair, and permanent. Fortunately, an elegantly simple, fair and permanent alternative exists, a reform that would fund social security for the foreseeable and the unforeseeable future. In one stroke, merely by removing the regressive cap on the wages on which the social security tax is collected ($90,000), the system is made solvent and fair.
The Democrats need to combine their call to resistance - "don't mess with my social security" - with a message that proposes a solution: "Make it fair; make it flat." Financial studies have shown that removing the cap would eliminate the social security shortfall that is expected to emerge three or four decades from today. And, polls find that the idea of doing away with the cap is popular; indeed, it is the one proposal for fixing social security that the American people support.
Why are the Democrats not offering such a compelling and popular solution and instead insist on mucking around with complicated and incomplete fixes, such as a partial lifting of the cap or a surcharge on higher wages that would still leave such wages taxed at a lower rate? Is it that too many Democrats fear offending better-off taxpayers that finance their campaigns, albeit never as lavishly as they do those of the Republicans?
If the Democrats can demonstrate some of the backbone of an FDR, who once said he welcomed the hatred of the wealthy who despised his New Deal programs, they have a perfect opening. They can offer a positive, popular and fair solution to for issue that concerns most Americans, a move that would have the added benefit of pitting the majority of the American people against the Bush administration and ideologues in the Republican Party.
