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More Madness

I missed this the first time around. Same article as discussed below, second page. "Seeking to head off unhappiness among Republicans who want Mr. Bush to take the bolder route, White House officials have been emphasizing the importance of unifying behind whatever plan has the best chance of being signed into law." In other words, the White House doesn't actually give a damn what happens, as long as they can replace Social Security with something else. Anything else. The small matter of the multi-trillion dollar difference between the two plans discussed in the article is trivia. As if they had meant to fight weapons proliferation in North Korea and build democracy in Afghanistan, but then decided that invading Iraq focus grouped better and, hey, it's invasions either way so what's the difference. Or maybe that is what they did.

January 6, 2005 | Permalink

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Comments

Sounds like we have some focus group members to find and throw rotten eggs at . . .

Posted by: Saheli | Jan 6, 2005 1:03:59 AM

"In other words, the White House doesn't actually give a damn what happens, as long as they can replace Social Security with something else. Anything else. The small matter of the multi-trillion dollar difference between the two plans discussed in the article is trivia."

To repeat myself from the previous thread:

The crucial thing is the destruction of SS, not the details of the plan that replaces it. Once again, the goal is destruction, not creation. They don't need a replacement plan that works.

Posted by: Petey | Jan 6, 2005 1:30:54 AM

Every day, it gets harder to respect the people that support these crooks. They don't even pretend to give a shit anymore.

Just wait until Bush has a year left. I expect him to be actually holding public auctions: "Legislation fore sale! Get it while it's hot!"

And the headline will be "Bush strengthens US position with bold privatization of government" and his supporters, who aren't even getting a kiss with the f*ck they just got, will be cheering him as the greatest president ever.

I don't understand this country any more.

Posted by: Timothy Klein | Jan 6, 2005 1:40:23 AM

"In other words, the White House doesn't actually give a damn what happens, as long as they can replace Social Security with something else. Anything else."

Cool. In that case I want to submit my plan which doesn't involve the odd risks inherent in the privitization plan. Just admit that it isn't a pension plan and return Social Security to its core function as insurance against poverty--and like real insurance it only pays out if you actually experience the thing it guards against.

Posted by: Sebastian Holsclaw | Jan 6, 2005 2:28:59 AM

I don't know if S. Holsclaw's plan is ideal, but it is something I could live with. If only the people in charge had any interest in effecting substantive change, rather than helping out their egos and wallets.

And maybe it's just semantics, but the kind of plan that SH suggest is the kind of thing a conservative should be implementing, if one uses the normal definition of that word. The non-plans that have been floated recently are anything but conservative: they are radical changes in a decidedly gilded-age direction. I think it is time to start calling a spade a spade.

Don't let radicals meddle with your Social Security.

Posted by: Timothy Klein | Jan 6, 2005 2:51:45 AM

You know Sebastian, I'm not against means-testing in principle but in practice it's very problematic to means-test a program for people who are, you know, retired. Many of these people are asset-rich (mortgage free house!) but otherwise fairly poor, so an asset test is out. While some things, such as 401k disbursements, can be counted as "income," simply drawing down savings or other more liquid assets can't. Means testing it would be expensive to monitor and very problematic to implement, throwing in all kinds of perverse incentives for people to shuffle their wealth around in various forms.

Posted by: Atrios | Jan 6, 2005 9:06:15 AM

I've been saying this for a while, but...

This is Junior's chance at a legacy. He wants to be the "conservative FDR".

W envisions his likeness on the dime and his name over elementary schools.

His comments about 'he's the one making history' tell me all I need to know about his f'd up ego. He is probably daydreaming. right now* about how big his presidential library will be.

Social Security is just the beginning of a huge ego trip. Just you wait and see.....

Posted by: def | Jan 6, 2005 9:12:32 AM

wrt Atrios and SH, there is an interesting switching of positions where Atrios is arguing basically what I would call the conservative, non-distorting position (before atrios crushed me with, let me say I realize that non-distorting is not really a conservative position, but they seem to take it religiously), and SH is arguing for the government to get intimately involved in redistrubuting people's money according to complex beaurocratic rules. Interesting that.
My own position would be that it does not really matter because George W. Bush is president, and anything he tries to overhaul will turn to garbage so it should be opposed. Doesn't anyone remember accountability?

If we had a competent executive, IMO:
1. Eliminate the cap
2. Eliminate the Payroll tax and use general fund
3. via De Long set up a Fed-like governor's board

Posted by: theCoach | Jan 6, 2005 9:23:27 AM

1. Eliminate the cap
2. Eliminate the cap
3. Eliminate the cap

Posted by: Petey | Jan 6, 2005 9:28:49 AM

Unfortunately for me I was not mocking MY with my spelling of bureaucratic.

Posted by: theCoach | Jan 6, 2005 9:34:53 AM

MY (and others), can you do me a favor and always use the word "theft" to refer to whatever SS plan Bush and the GOP puts forward?

Posted by: dstein | Jan 6, 2005 9:44:34 AM

Sebastian, I don't doubt that this is a decent idea, though Atrios points out the obvious problems.

However, in 10 years after it's implemented, you (or your ilk) will start whining about how your plan is just a handout to senior citizen "social security queens" driving to pick up their checks in their new Ford Crown Victoria and how we need to eliminate this. The problem is that there is mass public resentment against the poor, whereas entitlements that benefit the middle class as much as the poor are considered sacrosanct.

Posted by: Constantine | Jan 6, 2005 11:38:21 AM

Petey,
Any numbers on how far out eliminating the cap (obviously on withholdings, not payouts) puts the projection?

Another thing I do not quite get; How is that increases in productivity could make the projections solvent if it is still tied to wages? Wouldn't wages rise in sync with productivity? I know there is something obvious I am missing, but I would appreciate the help.

Posted by: theCoach | Jan 6, 2005 12:12:23 PM

"Means testing it would be expensive to monitor and very problematic to implement, throwing in all kinds of perverse incentives for people to shuffle their wealth around in various forms."

Hey, I didn't say I worked out every last detail. I would love to have discussions about fair ways to implement such a thing. I used an income test because it A) excluded fewer people, B) was easier to implement, and C) it is difficult to be truly rich AND live a rich lifestyle without having at least noticeable amounts of income (trolls, I say DIFFICULT not impossible). If you want to help design a good wealth determination system I completely willing to participate. Also, even if it cost the entire budget of the IRS to implement (which I suspect is a ridiculous assumption) we would still save about $10 billion per year.

However, in 10 years after it's implemented, you (or your ilk) will start whining about how your plan is just a handout to senior citizen "social security queens" driving to pick up their checks in their new Ford Crown Victoria and how we need to eliminate this. The problem is that there is mass public resentment against the poor, whereas entitlements that benefit the middle class as much as the poor are considered sacrosanct.

This objection is so common and so tired. A) I think there is a pretty obvious difference between alleged demonization of 'welfare queens' who according to legend live their whole lives on welfare and retirees who, you know, worked most of their lives. B) That difference ought to be rhetorically useful for those on the left who worry about conservatives getting rid of safety net programs. C) the proposal doesn't cut out the middle class in any case. So unless you think you can't do without rich people getting paid, your objection doesn't make sense.

Sigh, and I didn't really mean to threadjack. Perhaps an in depth discussion on the topic on my site? (Yeah I know, I don't like self-promoters either)

Posted by: Sebastian Holsclaw | Jan 6, 2005 12:14:10 PM

"Any numbers on how far out eliminating the cap (obviously on withholdings, not payouts) puts the projection?"

I'm not an economist, although I play one on TV.

I'd guess completely lifting the caps would not only make the system solvent in perpetuity, but would also allow the payroll tax percentage to be reduced.

And if I were in charge of the Dem policy shop, I'd advise dedicating all revenue from the estate tax to the SS system...

Posted by: Petey | Jan 6, 2005 12:20:44 PM

Sebastian,

"Hey, I didn't say I worked out every last detail. I would love to have discussions about fair ways to implement such a thing. I used an income test because..."

I think we're going to win the SS fight, partly because of the structure of the program.

The fact that it has almost no overhead, the fact that it has almost no waste, fraud, and abuse, the fact that it has no aspects of being a welfare program - all those have been essential in creating a program with almost no weaknesses to attack.

The program was crafted and maintained to survive just the kind of attack it's about to undergo. And it's a sturdy ship.

Means testing, no matter how justifiable, would make the program harder to defend in these perilous times.

Posted by: Petey | Jan 6, 2005 12:28:18 PM

"I'd guess completely lifting the caps would not only make the system solvent in perpetuity, but would also allow the payroll tax percentage to be reduced."

The problem with lifting the caps under the current system is that the caps were justified under the stupid 'pension plan' rhetoric which neither side has been (as yet) willing to really abandon.

Posted by: Sebastian Holsclaw | Jan 6, 2005 12:35:32 PM

"The problem with lifting the caps under the current system is that the caps were justified under the stupid 'pension plan' rhetoric which neither side has been (as yet) willing to really abandon."

Sure. It would destroy some of the original intellectual integrity of the structure of the program.

However...

Unlike means testing, I think lifting the caps would make the program stronger politically, especially if it were paired with a decrease in the overall payroll tax rate.

Lifting the caps would leave payouts untouchable, which is an important political defense of the program I fear means testing would weaken.

At the heart of the matter, I don't think lifting the caps would have the psychological effect of casting SS in the light of a welfare-ish program in the same way I fear means testing would.

Posted by: Petey | Jan 6, 2005 12:45:14 PM

SH wrote: "I think there is a pretty obvious difference between alleged demonization of 'welfare queens' who according to legend live their whole lives on welfare and retirees who, you know, worked most of their lives. B) That difference ought to be rhetorically useful for those on the left who worry about conservatives getting rid of safety net programs.".

In a normal world, yes, those would be sufficient reasons. We are, though, not living in that world any longer.

Frank Luntz & Co. would have a multi-million dollar ad campaign that would make the point that this is an "entitlement" program, and it would be eagerly financed by those who would miss out if we went to a means-testing basis. They would use softer language, yes, but without any let-up in terms of ferocity. SH may be committed to the concept of SS but these guys aren't.

I don't mean to trash the commentator's idea, as it has merit. And yes, it is theoretically possible it could be enacted without repercussions.

But I think it is näive to believe that those who subscribe to the "we have to destory the village in order to save it" mode would not be prepared to attack it. Once the "Social Security is for everyone" theme is changed, all bets are off.


Posted by: Ed Tracey | Jan 6, 2005 12:52:55 PM

We all know that SS central is over at Josh Marshall's place, right?

Posted by: Petey | Jan 6, 2005 12:59:33 PM

"Frank Luntz & Co. would have a multi-million dollar ad campaign that would make the point that this is an "entitlement" program, and it would be eagerly financed by those who would miss out if we went to a means-testing basis. They would use softer language, yes, but without any let-up in terms of ferocity. SH may be committed to the concept of SS but these guys aren't."

Sheesh you guys are fatalistically impotent. You don't think that you could defend a program which would seem very fair to people--much fairer than the current system if you want to use the 'social insurance' rubric which is suddenly becoming fashionable--if you only had payouts to 3/4 of the population? Good heavens. How bad is your PR capability?

Posted by: Sebastian Holsclaw | Jan 6, 2005 1:08:54 PM

The President and his supporters are going to contend fighting the SS overhaul serves to weaken the stature of the Executive Office during a time of war. Congress and the public will be told to oppose Bush is to oppose all he stands for, including fighting terrorism and spreading democracy and liberating oppressed peoples. Therefore those disputing the need for SS change are traitors.

Posted by: steve duncan | Jan 6, 2005 1:31:30 PM

There is a reasonable way to "means test" old-age pensions...

A progressive consumption tax, negative for low amounts, positive for high amounts, and indexed by age.

(I'm not a big comsumption tax fan, just letting you know...)

Posted by: econotarian | Jan 6, 2005 3:32:27 PM

Well, okay, and they already are somewhat means-tested through the current tax code, which siphons money out of the trust fund and into the general fund.

Posted by: Atrios | Jan 6, 2005 3:38:57 PM

Here's my Social Security reform plan for the Democrats: Change the FICA tax structure, without changing the benefits paid out. Currently this is just about the most regressive tax in America. This, more than anything else, is what makes many young people skeptical about Social Security.

Make FICA a progressive tax, as follows:

Marginal income from $0 to $20,000: No FICA tax on the employee side. (Employer still pays the 6.2% for this income, since there is no way that it would be passed on to the employee if they didn't.)
Marginal income from $20,000 to $87,900: Existing rates (6.2% on each side) remain in force for both employer and employee taxes. This is unchanged from the present system.
Marginal income from $87,900 to $350,000:
No FICA taxes on either side of income. This is the same as the present system.
Marginal income from $350,000 upward: Employee pays 7.5% FICA, employer also pays 7.5%. This is a tax increase on this tiny fraction of the elite.

Under this system, the government takes in more income by tapping the pockets of the super-elite (who can easily afford this small hit) and the vast majority of Americans get a tax cut. The average American - anyone making more than $20,000 a year and less than $350,000 - will pay $1,240 LESS in FICA tax a year due to the elimination of FICA employee side taxes on the first $20,000 of income. This is a REAL middle class tax cut, not the phony BS the Bushies peddled.

Why did I propose leaving a gap between the current cap and $350,000? Simply because it would be too easy for the Republicans to demagogue if this wasn't done. Many middle-class Americans can envision themselves making $90,000 a year. Far fewer can envision themselves making $350,000.

This is a win-win situation. More tax income, but most Americans see their taxes go down. You won't see the DLC peddling this, but if the Democrats ignored those corporate shills and did what was right, this would be a winning proposal.

Posted by: Firebug | Jan 6, 2005 4:33:48 PM

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