A Big Push On Social Security

zimv20

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President Bush's political allies are raising millions of dollars for an election-style campaign to promote private Social Security accounts, as Democrats and Republicans prepare for what they predict will be the most expensive and extensive public policy debate since the 1993 fight over the Clinton administration's failed health care plan.

With Bush planning to unveil the details of his Social Security plan this month, several GOP groups close to the White House are asking the same donors who helped reelect Bush to fund an extensive campaign to convince Americans -- and skeptical lawmakers -- that Social Security is in crisis and that private accounts are the only cure.

Progress for America, an independent conservative group that backed Bush in the campaign, has set aside about $9 million to support the president's Social Security plan as well as other White House domestic priorities in the new year, said spokesman Brian McCabe. The group is asking its donors for much more, he said.

Stephen Moore, head of the conservative Club for Growth, has raised $1.5 million and hopes to hit a $15 million target when his fundraising drive ends.

But their contributions are likely to be dwarfed by those from corporate trade associations, spearheaded by the National Association of Manufacturers. Other likely contributors include the financial services and securities industries and other Fortune 500 companies, GOP officials say. White House officials, led by Karl Rove and Charles P. Blahous III, the president's policy point man on Social Security, are helping to shape the public relations campaign, said the officials, who talked about private discussions with the White House on the condition of anonymity.

"It could easily be a $50 million to $100 million cost to convince people this is legislation that needs to be enacted," Moore said. "It's going to be expensive" because "it's the most important public policy fight in 25 years," he said.

Republicans are expediting their fundraising plans after learning that AARP, the influential seniors group that supported Bush's Medicare program but opposes his Social Security designs, will spend $5 million in the first two weeks of this month attacking the president's plan to allow younger workers to invest part of their Social Security contributions in the stock market. AARP plans to run full-page ads in 50 large newspapers to coincide with the return of Congress next week. In one ad, a couple in their forties says, "If we feel like gambling, we'll play the slots."

AARP will be joined by a large number of Democratic groups, including the AFL-CIO, the NAACP and the National Organization for Women. They are coordinating their work with Democratic congressional leaders, all of whom oppose the private investment accounts.

Both sides say the fight could eventually become the most expensive lobbying campaign Washington has witnessed because the stakes are so high for businesses and taxpayers and the issue is so complex for most Americans.

(more)
 

Blue Velvet

Moderator emeritus
Jul 4, 2004
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Enron social security products, anyone?


One question that should be asked by every voter: who really stands to gain from this?
 

Thomas Veil

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Feb 14, 2004
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Banks, investment firms, etc., of course.

Though I don't think knowing that will cause anybody to be against it. We seem to be inured to that stuff by now.
 

Awimoway

macrumors 65816
Sep 13, 2002
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Sorry. I misread the title of this thread as "A Pig Bush on Social Security." That pretty much sums it up, I should think. :D
 

zimv20

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THE HONORABLE ROBERT T. MATSUI DIES AT AGE 63

link

Matsui was [...] the Ranking Member on the Social Security Subcommittee
how convenient for the bush administration. yes, i'm cynical.
 

kuyu

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Sep 16, 2003
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I'm back...

The ad described with the 40 something couple talking about gambling is silly. Everything I've heard/read about this thing makes it fairly obvious that the new plan will be optional. If you like your SS as it is now, then nothing will change for you.

What wrong with that? Choice is a good thing.

http://www.gop.com/GOPAgenda/AgendaPage.aspx?id=7

# The President favors voluntary personal accounts for younger workers. Personal accounts provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass on to their spouse or their children.
# Those who do not choose to have a personal account would continue to draw their benefits as they always have from the Federal Social Security program. President Bush believes that those who choose to have a personal account should have increased personal ownership and control of their nest egg within Social Security.
 

wordmunger

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Sep 3, 2003
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kuyu said:
I'm back...

The ad described with the 40 something couple talking about gambling is silly. Everything I've heard/read about this thing makes it fairly obvious that the new plan will be optional. If you like your SS as it is now, then nothing will change for you.

What wrong with that? Choice is a good thing.

http://www.gop.com/GOPAgenda/AgendaPage.aspx?id=7
If choice is such a good thing, why don't we let people choose whether or not to pay taxes? While we're at it, we could let them choose if they want to obey traffic laws. After all, we're just letting each individual choose to do what's in his or her best interest! Yippee! Choice for everyone!

And I'm sure, 40 years from now, when millions of Americans have "chosen" to make bad investments with their retirement money, they'll happily "choose" to starve to death, instead of voting in new benefits that will cost even more money than the "broken" Social Security system would have cost.
 

IJ Reilly

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Jul 16, 2002
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At the risk of sounding like I'm droning on endlessly about this, I am less concerned about people making bad investments with the privatized portion of their Social Security (which they can already do very nicely with their IRAs and 401(k)s plans) then I am with the added debt created by diverting trust fund income, and the probability that a lot of people will get screwed with lowered benefits to make up for the shortfall.

On the politics of the thing, I believe the opponents of privatization would be foolish to make the argument that people aren't capable of making investments on their own. Hardly anyone thinks the government can do this better than they can as individuals (rightly or wrongly). If Democrats make this basis of their opposition, then they are going to lose the debate and lose it big.
 

mactastic

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Apr 24, 2003
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My question is Why Now? Massive deficits, and a war on foreign soil with no near-term solution, coupled with the fact that the revised numbers for SS insolvency are being pushed back farther and farther would seem to indicate that we have some time to figure this out. It is not a crisis. It won't be a crisis for at least 2-3 decades.

So... Why Now instead of 10 years hence?
 

kuyu

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Sep 16, 2003
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mactastic said:
My question is Why Now? Massive deficits, and a war on foreign soil with no near-term solution, coupled with the fact that the revised numbers for SS insolvency are being pushed back farther and farther would seem to indicate that we have some time to figure this out. It is not a crisis. It won't be a crisis for at least 2-3 decades.

So... Why Now instead of 10 years hence?
This is a good point. With deficits as they are (huge), this could spell disaster.

They want to do this now because with each passing day the proportion of people paying in versus people drawing out is narrowing. Eventually even this system won't be able to save SS, which is doomed as it currently stands.
 

wordmunger

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mactastic said:
So... Why Now instead of 10 years hence?

I'm pretty sure you're asking this rhetorically, but of course the answer is that conservatives don't like social security and see this as a good way to kill it.
 

mactastic

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wordmunger said:
I'm pretty sure you're asking this rhetorically, but of course the answer is that conservatives don't like social security and see this as a good way to kill it.
That's my feeling as well. Same with the DoEd and the IRS as well.
 

zimv20

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kuyu said:
They want to do this now because with each passing day the proportion of people paying in versus people drawing out is narrowing. Eventually even this system won't be able to save SS, which is doomed as it currently stands.
from the krugman article, linked above:
What happens in 2018 or whenever, when benefits payments exceed payroll tax revenues?

The answer, very clearly, is nothing.

The Social Security system won't be in trouble: it will, in fact, still have a growing trust fund, because of the interest that the trust earns on its accumulated surplus. The only way Social Security gets in trouble is if Congress votes not to honor U.S. government bonds held by Social Security. That's not going to happen. So legally, mechanically, 2018 has no meaning.

Now it's true that rising benefit costs will be a drag on the federal budget. So will rising Medicare costs. So will the ongoing drain from tax cuts. So will whatever wars we get into. I can't find a story under which Social Security payments, as opposed to other things, become a crucial budgetary problem in 2018.

What we really have is a looming crisis in the General Fund. Social Security, with its own dedicated tax, has been run responsibly; the rest of the government has not. So why are we talking about a Social Security crisis?

It's interesting to ask what would have happened if the General Fund actually had been run responsibly - which is to say, if Social Security surpluses had been kept in a "lockbox", and the General Fund had been balanced on average. In that case, the accumulating trust fund would have been a very real contribution to the government as a whole's ability to pay future benefits.

As long as Social Security surpluses were being invested in government bonds, they would have reduced the government's debt to the public, and hence its interest bill.

We would, it's true, eventually have reached a point at which there was no more debt to buy, that is, a point at which the government's debt to the public had been more or less paid off. At that point, it would have been necessary to invest the growing trust fund in private-sector assets. This would have raised some management issues: to protect the investments from political influence, the trust fund would have had to be placed in a broad index. But the point is that the trust fund would have continued to make a real contribution to the government's ability to pay future benefits.

And if we are now much less optimistic about the government's ability to honor future obligations than we were four years ago, when Alan Greenspan urged Congress to cut taxes to avoid excessive surpluses, it's not because Social Security's finances have deteriorated - they have actually improved (the projected exhaustion date of the trust fund has moved back 5 years since that testimony.) It's because the General Fund has plunged into huge deficit, with Bush's tax cuts the biggest single cause.
the whole thing is worth the read.
 

mactastic

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All we have to do is raise the level of income subject to SS taxation to around $250,000 and the SS system is safe for much of the next century.
 

pseudobrit

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Jul 23, 2002
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All Bush is doing is expanding the financial disaster that is the federal budget to include Social Security, which he can't touch right now.
I'm not sure what his motives are. To destroy the middle class?

Anyone wonder why I'm leaving this sinking ship?
 

wordmunger

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Sep 3, 2003
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pseudobrit said:
Why cap it at all? It should include all income.
What Jane Galt asks is why have a separate payroll tax? Why not just pay for SS out of general revenues? That way we can use the existing progressive tax structure to pay for Social Security.
 

mactastic

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pseudobrit said:
Why cap it at all? It should include all income.
No question, but my point is that a small adjustment would put off the problem for the forseeable future, yet it's off the table.
 

solvs

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Jun 25, 2002
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Let's see, Republicans are against things like welfare and national healthcare. Now they want to cut social security like they cut Medicare, education, environmental programs, public housing, etc...

Cuz, you know, Christians aren't for things like helping the poor, the sick, the elderly, the children... After all, Jesus hates homosexuals, but he loves those guns and big business. Hypocrisy much? Anybody else think what Bush says and what he does are 2 different things?

No one seems to be able to answer the major questions. Like what happens to those who lose most of their benefits to places like Enron? There's a reason why Social Security is the way it is. If you want to invest, no ones stopping you. Go invest. If you win, great. If you lose your nest egg (to places like Enron), that's what Social Security is for.
 

kuyu

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Sep 16, 2003
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solvs said:
Let's see, Republicans are against things like welfare and national healthcare. Now they want to cut social security like they cut Medicare, education, environmental programs, public housing, etc...

Cuz, you know, Christians aren't for things like helping the poor, the sick, the elderly, the children... After all, Jesus hates homosexuals, but he loves those guns and big business. Hypocrisy much? Anybody else think what Bush says and what he does are 2 different things?
Most aren't eligible for SS until 65. The average black man lives to be 55.

As a proportion of what's put in versus what's paid out, black men pay the most and white women take the most. As it stands, SS is an unfair tax on minorities used to fund the lifestyles of old white women. If that's not systematic, government sponsored discrimination... I don't know what is.

Bush's plan allows black men (and everyone else for that matter) to give their private accounts to their families, even if they don't live to 65. Currently the kids get some money if they are under 18, and adult heirs get a few grand to help pay for a funeral.

I heard some liberal on TV say that SS was totally solvent until 2050. That's great, if you are over 40 right now. If you aren't... well, good luck. This issue trancends partisanship. SS is broken. We need to do something now, while we still can. If Bush's plan doesn't seem to work, that's fine, but please propose something that will work for all of us, not just old white people.
 

wordmunger

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Sep 3, 2003
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kuyu said:
Most aren't eligible for SS until 65. The average black man lives to be 55.

As a proportion of what's put in versus what's paid out, black men pay the most and white women take the most. As it stands, SS is an unfair tax on minorities used to fund the lifestyles of old white women. If that's not systematic, government sponsored discrimination... I don't know what is.

Bush's plan allows black men (and everyone else for that matter) to give their private accounts to their families, even if they don't live to 65. Currently the kids get some money if they are under 18, and adult heirs get a few grand to help pay for a funeral.

I heard some liberal on TV say that SS was totally solvent until 2050. That's great, if you are over 40 right now. If you aren't... well, good luck. This issue trancends partisanship. SS is broken. We need to do something now, while we still can. If Bush's plan doesn't seem to work, that's fine, but please propose something that will work for all of us, not just old white people.
The "black men live to 55" stat comes from averaging in all the teenagers killed in gang-related incidents, etc. I don't think they would have accumulated much in their private accounts. Middle class black men, the ones likely to have accumulated lots of money in a private account, will very likely live to a ripe old age.

The second question is what will happen in 2050, supposing we do nothing. The answer (assuming all the projections come true--a dubious assumption) is that Social Security will be unable to pay 25 percent of what it owes. So everyone will likely get their benefits cut by 25 percent. Guess what: people would still get more than they get today, even in inflation-adjusted dollars: about $19,000 compared to around $15,000 today. Under the Bush plan, many people would actually get less than they get under the current system.

Economist Max Sawicky has an excellent blog post about all this.
 

solvs

macrumors 603
Jun 25, 2002
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kuyu said:
If Bush's plan doesn't seem to work, that's fine, but please propose something that will work for all of us, not just old white people.
Please tell me you're kidding about the old white people thing, because that's just reaching.

Just because I don't have a solution, doesn't mean Bush's plan is good. I've heard that they could just raise the income level to $200,000 instead of $90,000. That's a start. Spending a trillion dollars to pay for people to potentially lose almost everything with nothing to fall back on, while Corporate America gets richer, is not my idea of an ideal solution. What do they do with those who get ripped off by people like Bush's buddy Kenny Lay?

And I think you quoted the wrong part of my post. The SS stuff was on the bottom. The part you quoted is about the hypocrites who claim to be Christian, yet do very unChristian things. I don't see what this has to do with ripping off black men. You know, white people die young too.