Wednesday :: Feb 25, 2004

Greenspan's Case For Bailing Bush Out By Cutting Social Security

by Steve

Alan Greenspan told Congress today to deal with the current budget deficits by reducing future Social Security benefits.

Huh? Why exactly should we cut Social Security for future retirees in order to lock in Bush's tax cuts for the well-off now, for people who didn't need them in the first place? Because of a newfound concern for long-term interest rates that the Chairman neglected to bring up and fight for at any time during his lack of concern about the three Bush tax cuts? Why Mr. Chairman are you confirming at this time that it should become the job of the lower and middle classes to reduce their retirements to subsidize upper-end tax cuts?

Amazing. Let’s say for the sake of argument that changes should be made to the Social Security system, as recommended in a bipartisan way for several years now. Toss out the recommendations and report from the Bush-appointed commission of corporate CEOs stacked with privatization gonzos. Accept the fact that Clinton and Gore had planned to lockbox future surpluses and pay off the country’s debt so that we would be in a great position at the end of the decade to handle increased debt necessary to finance the wave of retiring boomers.

Earlier efforts at studying Social Security fixes all seemed to agree that several reforms need to be pursued, such as changing how benefits are indexed for inflation, pushing up the retirement age for full benefits in a gradual manner, raising the income cap for FICA taxation, and even pursuing options that allow workers to self-direct a portion of their withholding if they choose (knowing that we would need the money to pay for such reductions in the amount going into the trust fund as a result.)

Let’s even stipulate that notwithstanding what Bush would say after the election if he is successful, his position right now of not doing anything that negatively affects the benefits of current or soon-to-be retirees is fair and laudable. Let’s also stipulate that Greenspan is right to warn that tax cuts should be paid for with spending cuts or other tax increases, although such clarity and guts would have been nice if he had the balls to say this during the debates over the last three Bush tax cuts.

What’s remarkable about Greenspan’s comments is that he ties our current deficit situation to future Social Security underfunding. They are not related. We are currently still running surpluses in Social Security as I understand it. Our current deficits are the result of Bush’s revenue-draining tax cuts, a sluggish post-recessionary economy, and a dramatic increase in defense and homeland security spending. Yet Greenspan is saying that we need to cut Social Security in the future to pay for current deficits. He does say that tax increases should be considered only as a last resort after outlays have been trimmed. But under that detached reasoning, which outlays exactly Mr. Chairman should be trimmed, since Social Security currently is not a contributor to the deficit? And how can you say this with a straight face when you are calling for Bush’s tax cuts to be made permanent? Actually, Mr. Chairman, after this performance and “analysis” of the problem, what credibility do you have left?

Steve :: 11:42 AM :: Comments (23) :: Digg It!