It would seem to be a safe bet that Democrats won't be lured in by Bush's (ostensibly) new approach to Social Security reform -- so what's he trying to accomplish?
First of all, everyone seems to be laboring (!) under the illusion that Social Security doesn't have a strong welfare component now. Actually, the status quo benefit calculation is highly progressive -- workers with low lifetime earnings get a much higher percentage of their month-to-month income replaced than those with high lifetime earnings. There are monthly income brackets -- Social Security calls them bendpoints -- just like in the income tax code: the lowest lifetime earners see 90% of their average monthly income replaced, while the highest earners end up with about 35% of their marginal average monthly income dollar.
But the perception has never been that Social Security is a welfare program, probably because the architects of the program knew that a welfare program wouldn't have the same political longevity. So, and individual's Social Security taxes are refered to as contributions, and those contributions end at a certain point each year for high wage workers (so the diminishing returns aren't too conspicuous). This is also why the benefits are tied to a tax on wages instead of pulled from general revenue, even though the disctinction is blurred by a labyrinthine intra-government borrowing arrangement.
Bush's recent repositioning on this issue is provocative. By emphasizing the progressive configuration of the benefits cuts he proposes, Bush seems to be reaching out to Democrats. At the same time though, he's starting to unravel the rhetoric of contributions and accounts, so that the focus of the Social Security program becomes the welfare of the elderly poor. Eventually (ie if his new rubric catches on) this will stand in stark contrast to Bush's own plan for private accounts, which will end up having the same stated purpose as Social Security did at its inception. Essentially, it's an attempt by Bush to destroy Social Security in the long term by altering its rhetorical/ideological underpinnings.
Post a comment