Sources in a position to know say President Bush will not go along with any Social Security scheme that involves anything that remotely smacks of a tax increase. That may be the President’s mindset at the moment. Let’s hope it holds.
This is a difficult time for a president who surely remembers that when his father tried to “get along” with a Democrat-controlled Congress, he was stiffed ?big time.
Nonetheless, the National Taxpayers Union (NTU), the Wall Street Journal, and others believe President Bush is about to throw in the towel on private accounts for Social Security and go along with what the Democrats really want ?a hike in taxes. To “compromise” with the president, the Dems will agree to a cutback in benefits, on the dubious assumption that’s what the president wants. But they would “agree” to it so they can beat the Republicans over the head with the issue in future campaigns.
The NTU, in a letter to the current President Bush, refers to his 2004 pledge not to raise taxes to solve the Social Security problem. Then in a none too subtle reference to the elder President Bush’s “Read my lips” promise, the taxpayers group says, “Past presidents have made no-tax pledges and suffered greatly in breaking them.”
But informed sources say not so
It is nice to be told by a well-informed “insider” that this President Bush is not going to raise taxes to deal with Social Security’s coming shortfall ?or with any other problem, for that matter.
“Going back over the last 50 years [at least], George W. Bush is the only president who has not raised taxes” in some way or at some time in his tenure, the source reminded me, and added, “We might even say that includes the last hundred years, but there is some debate about Calvin Coolidge.”
Nonetheless, press reports persist that the White House plans to “work with [cave to?]” the incoming Democrat Congress on a Social Security “fix” that will smell like a welfare scheme, and likely involve a tax hike as well. The implication is that only “the rich” will be nicked for it. Not so. The middle class always gets caught in the squeeze.
For the Marxists in our own political system, nothing pays off so well for their pushing the class hatred card so much as the recurring Social Security debate. For them, this is the political “gift that keeps on giving.” Never mind that your grandchildren and/or your children will end up bankrupt. This remains FDR’s gift to today’s liberals, and some of us suspect the wiley old rascal knew what he was doing, notwithstanding his comments at the time about the deleterious effects of welfare dependency.
A pressure move against Bush
At the heart of all the speculation is that Mr. Bush will abandon once and for all his fight for personal Social Security retirement accounts. All during the last two years, Democrats refused even to discuss that issue with the White House. Either it was “off the table,” or they would not go so far as to sit down and negotiate. Nancy Pelosi just flat out said they would beat something with nothing. And they did. Now that the Dems will control Capitol Hill, we’ll find out what “nothing” tax-grabbing scheme they have in store for us.
Now that they’re finally willing to “talk,” Treasury Secretary Hank Paulson has assured them there will be “no preconditions” on the administration side. So in contrast to the Democrats’ hard-line conditions for negotiating, nothing is “off the table” at the Republican end. And people wonder why this column has opined that Democrats have in their DNA the barroom brawler, while the Republicans are hamstrung by country club etiquette.
The Wall Street Journal disapprovingly editorializes that “it is evident” that in a tradeoff for ditching personal Social Security accounts, the Democrats would graciously agree to “progressive indexing,” meaning that Social Security retirees at the higher end would see their benefits grow at a slower pace in a gradual way by changing the formula for payment. Lower income workers would see no change in their benefits.
Soak the rich? No, soak the middle class
What’s wrong with “means testing,” or taxing, or slowing the growth of benefits for middle and “higher income” retirees?
Here’s what’s wrong with it: Anyone who has spent years in the workforce under contract will tell you that when it’s time to bargain for a retirement package, your expected Social Security benefits are factored into the equation. If ?after you retire ?those benefits don’t add up to what was assumed, you can’t go back to your old boss and ask him to fill the gap. We are told that for those 55 and over, nothing will change. Try and sell that to a 45 or 50-year old worker who has been forced to sock away gobs of his hard-earned money to shore up the system that offers him a 1% return on his investment.
Even President Reagan ?in a rare misstep ?agreed in 1983 to a Social Security deal with the Democrats that enabled them to use it to knock off GOP lawmakers in the next three election cycles. Again, for the liberal socialist cabal, this is the gift that keeps on giving. How long do Republicans have to be hit over the head with this ploy before they wake up?
A real compromise?
Gene Sperling, a onetime adviser to President Clinton, thinks there is a way to get around the Democrats’ Saddam Hussein-style refusal (in the dictator’s heyday) even to talk unless personal accounts are “off the table”: Just don’t call them Social Security accounts. Make them a “Universal 401-K” and include those workers whose companies have no 401-K plan. That idea has some merit. But it would have nothing to do with Social Security. Heaven forbid that the Stalinists lose control of a system in favor of letting the great unwashed (Gasp!) control their own savings for the future.
“Universal” would not mean equal. Everyone would be eligible to contribute, but the most generous government match would go to low-income workers.
Of course, the liberal pundits are weighing in and figuring out ways to pay for a further redistribution of wealth.
Top 40% “the rich”?
Washington Post columnist Sebastian Mallaby, for example, writes that Sperling’s plan could be financed by pruning “the existing $150 billion patchwork of tax breaks for saving.” Mallaby then uses his Marxist-rigged calculator to charge that this “patchwork” is “scandalously regressive [because] 90 percent of the tax breaks go to [Gasp!] the richest 40 percent of taxpayers.”
There’s the old class hatred mantra again, the “gift that keeps on giving” not only for liberal politicians, but also for their media echo chamber. Forty percent of taxpayers? That takes in a lot of middle income people ?or simply a lot of people, period. We’re not just talking about Bill Gates here.
Paul Hewitt is Executive Director of Americans for Generational Equality (AGE). Unlike the political obstructionists in the entitlements debate, he and his organization are engaged in the novel task of actually trying to solve the problem, as opposed to generating hot air for the consumption of the booboisie.
In an e-mail to this writer, Hewitt says, “The top 40 percent together paid 84 percent of total revenues (including payroll excise taxes) in 2003, the last year for which data is available.” He goes on to say that in calling the most highly compensated wage earners the “richest” Americans, Mallaby “makes an egregious error.” The following table indicates just how egregious:
Percent of taxes paid by…
Lowest Quintile 1.0
Second Quintile 4.5
Middle Quintile 9.9
Fourth Quintile 18.6
Highest Quintile 65.7
The Wall Street Journal says odds are that “Democrats will pocket Mr. Bush’s concession on private [Social Security] accounts and then move the goal posts” and ultimately “demand that Mr. Bush agree ‘in the name of fairness’ to raise taxes too.”
Dumping private Social Security accounts in return for “means testing” the system is a “Heads I win, tails you lose” deal for the Democrats.
A “no-win” deal for Bush.
As for the long-term problem of entitlements, this column will attempt to deal with that later.
amp,big time,Novel,plo
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