A Non-Starter?
The central feature of George Bush's plan to revamp social security - allowing younger workers to divert up to two-thirds of their contributions - may already be dead in the water. Several Republicans, including such notables as Pete Domenici, are expressing doubt that it can win Congressional approval, citing the complete lack of Democratic support.
From what I've read about it so far, however, it doesn't sound like such a horrible idea for workers, under two conditions. That workers have the choice to opt out completely and have their full benefit guaranteed, and that the only portion of the benefit that's not guaranteed is whatever amount is invested in private accounts. It's not clear just how much of the guaranteed benefit Bush would cut.
Yet, the central flaw in Bush's proposal is that private accounts alone would not save social security. More far-reaching changes are necessary. Also, in the short-run, taking money from the system would require huge amounts of borrowing in order to guarantee benefits for older workers.
Comments
From the way I understand it, the private (er, personal) accounts are a token gesture, a way of saying "There's a chance you might do better this way." But the real meat of the plan, hardly mentioned at all, are the planned reduction in benefits for people later on down the road.
The accounts are a distraction in many ways.
Its a little like getting mugged, but as the mugger is running off he flips you a token for a slot machine and says "Today's your lucky day!"
Posted by: bruce | February 4, 2005 06:19 PM
I couldn't agree more with Bruce. If Bush has his way about restructuring the way the Social Security benefit is calculated then Social Security will become meaningless down the road. There's no denying that something needs to be done about Social Security, but not under the siege of Bush's manufactured crisis. Is it too much to hope that reasonable people, on both sides of the aisle, can discuss less drastic alternatives in open debate? Maybe I'm too naive.
Posted by: SS | February 4, 2005 08:13 PM
I, for one, could agree more with Bruce, but that's just me.
Posted by: Jon | February 5, 2005 09:39 AM