The basic problem with Bush's privatization scam is that it involves money. Most GOP rank and file are willing to go along with anything Bush cooks up, i.e. phony wars, fake elections, crooked energy policies, but start monkeying with their money and they won't like it. And pre-retirement boomers already know they've lost lots of savings in the stock markets over the Enron Years, and have had crappy CD returns every since Greenspan dropped the rates to 0 to save Bush's tax cut. People know that diverting money into stocks and calling it a retirement plan is a hustle. I don't think Boomers will buy it because it can only hurt them, not help them. You can trick idle brained GOP'ers into most anything, but I don't think Bush can trick them into giving their retirements to Wall Street. If the Dems really want to kill this stupid idea, they ought to be screaming "He'll steal your retirement" as loud as possible.

Posted by T2 at December 20, 2004 06:43 AM

Bush may have painted himself into a corner on this one. It appears his problem may be with the Republicans some of whom are less than enthusiastic about taking up the issue at all.

There's a third camp, those who would do nothing on Social Security because insolvency won't be a threat for a decade or more. House Majority Leader Tom DeLay has privately questioned whether it makes sense to tackle Social Security now. After all, Republicans worked for years to gain control of Congress. Why jeopardize that by provoking a fight over Social Security?

It's not going to happen without the Bugman.

Posted by Ron In Portland at December 20, 2004 06:49 AM

And point two: although the tax would hit the wealthy, it still doesn't impose on those who don't have earned income.

Of course, those who don't have earned income don't get to collect Social Security. You don't pay, you don't collect. Gonna also bring them into the pay-out pool as recipients?

Posted by Spanky at December 20, 2004 07:43 AM

Of course, those who don't have earned income don't get to collect Social Security. You don't pay, you don't collect. Gonna also bring them into the pay-out pool as recipients?

I think you missed the point. Unearned income is "all income except that from wages, salary, or self-employment (these types are earned income). It includes gifts, interest, inheritances, pension payments, disability insurance benefits and veterans payments."

The piece indicates that these are not taxed, and would remain untaxed.

Raising the cap has always been the best of both worlds. The limit should be exactly what the President's salary is. He should get to feel our pain. SocSer should also be means tested, with a dollar for dollar offset on incomes over the same level as the pension for a Congressman.

Posted by phidipides at December 20, 2004 07:54 AM

Just a note on the president's analogy to paying off a mortgage. It doesn't even work. If one has extra money to pay off a mortgage, they should, so that they don't have to keep paying interest rates on their home. However, if one is in debt (is there an analogy here?) they should pay off all their other debt outside of the mortgage first, as a mortgage charges the lowest interest rates of almost all debt. Some stock brokers even recomend that their clients take out a mortgage to invest in their retirement as the market sometimes outpreforms mortgage interest rates (I wouldn't recomend this). So if paying off SS is like paying off a mortgage, shouldn't we pay off all the other debt first?

Posted by chris65203 at December 20, 2004 09:57 AM

I never thought I'd ever say it, but: Go Tom Delay!

Eliminating the FICA cap would solve any future shortfall. But it should not be part of any quid pro quo on individual accounts. As much as it is a matter of equity to remove the cap, it is not worth any deal to privatize social security. In fact, the Democrats should not be engaging in any dealmaking period.

Posted by Paleo at December 20, 2004 12:08 PM

Congrats to President GW Bush for being TIMES man of the year again. What a great leader. Confirmation the majority of Americans voted for the right leader.
God Bless President GW Bush and his war on terror!!
Chevy

Posted by Chevy at December 20, 2004 01:21 PM

The problem with raising or eliminating the cap, is that many (if not most) of those in the upper-income brackets are self-employed. They pay both sides of the Social Security tax.

So lets say a self-employed person makes a ton of money in CA and now you want to eliminate the social security cap, adding another 13% tax on top of what they're paying. That'd have them paying around a 60% tax rate, adding the Federal rate, state of CA rate, and Medicare and Social Security.

Many would decide it just isn't worth it and would quit working and go fishin' or hit the links...

Posted by muckdog at December 20, 2004 02:16 PM

Oh, agree with the above comment. Congratulations to George Bush for making a second appearance as Time's Man of the Year. He joins former presidents Roosevelt, Reagan and Clinton as a repeat winner. Well done, Mr President! That's some great company to be with, and shows that history will regard Bush as one of this nation's great leaders.

Posted by muckdog at December 20, 2004 02:35 PM

JFK leaves 'em both behind.

Posted by chris65203 at December 20, 2004 04:44 PM