Social Security & Medicare Notes

Democrats understand - Don't gamble in a fixed game

G. W. Bush for reasons of his own started an initiative in 2005 to "reform" Social Security by phasing it out and replacing it with private accounts. His "60-Days, 60-stops" tour was mostly an effort to reach his supporters and use the word "Bankruptcy" often enough that his supporters get behind his phase-out effort in solid phalanxes.

It brought a reaction from the Democrats. They won't touch the whole effort except to explain how his ideas are incomplete, misleading, and don't hold water. The unity among Democratic politicians on this has been amazing to everyone, but especially to Bush. He has kept telling the Democrats to present a plan, and the Democrats kept asking "Why? You haven't presented a plan yet." The result has been a sharp drop in Bush's political polls.

In response to this failure, last week G. W. Bush offered some more definitive ideas for Social Security phase-out. Not a plan, but some ideas, especially the Posner Plan that "saves" Social Security by eliminating higher benefits for higher-paying taxpayers.

This was a non-starter, but it was immediately followed over the weekend by pundits who claim that since Bush has placed his ideas on the table, now it is time for the Democrats to come to the table and begin negotiating. A good example is shown in my previous blog about this Washington Post Editorial where I explain why the Democrats should not at this time attempt negotiations.

Now E. J. Dionne provides further support for the Democrats not attempting to negotiate in his May 3rd editorial. He makes that same point that I do, that there is no single plan on the table from Bush and the Republicans. He then goes on to show that any effort by the Democrats to negotiate are doomed to failure by the way the Republican leadership of the House and Senate have "fixed" the game before anyone starts to play a hand. The process of negotiation of bills between the House and Senate is now designed to eliminate the results of any negotiation with Democrats

"The most basic corruption of the process is the way the Republican congressional leadership has transformed the bargaining that once took place between the House and the Senate.

"In the old days, when each house produced different versions of the same bill, a "conference" committee typically including members of both parties from both houses would thrash out the details and reach a compromise. Now the Republicans will concede whatever is necessary to get a bill out of the Senate, even as the lockstep-Republican House produces a right-wing version of the same proposal. In conferences, Republicans routinely freeze out all but the most pliable Democrats. The supposed "compromise" that emerges is not a compromise at all. Democrats who go along become enablers of a game being played with a stacked deck."

There is also the fact that even before any negotiation begins, Bush has placed his worst policies off the table.

"Bush has refused to put his own tax cuts on the table as part of a Social Security fix. Repealing Bush's tax cuts for those earning more than $350,000 a year could cover all or most of the 75-year Social Security shortfall. Keeping part of the estate tax in place could cover a quarter to half of the shortfall. Some of the hole could be filled in by a modest surtax on dividends or capital gains.

"But Bush is resolute about protecting the interests of the truly rich by making sure that any taxes on wealth are ruled out of the game from the beginning. The Social Security cuts he is proposing for the wealthy are a pittance compared with the benefits they get from his tax cuts. The president is keeping his eye on what really matters to him.

"The real costs of progressive indexing as currently conceived would be paid by middle-income earners -- those with incomes in the range of $35,000 to $60,000 a year."

In short, the Democrats properly read the situation and refuse to be drawn into false negotiations. Senators Lieberman and Biden do not seem to have fully recognized that they can't free-lance anymore, but Senator Reid seems to have gotten them on board. Senator Reid recognizes that the Republicans have removed negotiations from the table before they begin, even as the berate the Democrats for failing to attempt negotiations.

posted by Richard @ 3:57 PM