Sunday, May 01, 2005

NY Times rejects Bush's Social Security proposal

Here is what the New York Times had to say about Bush's Social Security proposals:

Under Mr. Bush's approach of "progressive indexation," a typical low-income worker who earns about $16,000 a year today would be entitled to retirement benefits equal to about 49 percent of his or her wages, the same amount that is promised today.

But those earning an average income, about $36,500 in today's dollars, would see big changes. Instead of replacing 36 percent of that person's working pay, as promised under today's system, benefits would cover only 26 percent of pay by 2075. And people who earn $90,000 a year in today's dollars would continue to pay as much as ever in taxes but would receive benefits equal to only 12 percent of their pay.

That essentially guts Social Security as a guaranteed source of retirement for the middle class. If you make $90,000 per year and your retirement funds are tied up in your business that goes bad or in the Enron of the future, you have nothing left except $900.00 per month.

From the beginning, Mr. Bush has adamantly opposed alternative plans that would restore Social Security's solvency by raising taxes. While Mr. Bush has not ruled out an increase in the ceiling on income that is subject to payroll taxes, now $90,000, the idea is anathema to him and most Republicans.

"I know some rich people, and if you ask them whether they would rather have a tax increase or their benefits cut, they'll immediately say, 'Cut the benefits,' " said Representative Bill Thomas of California, chairman of the House Ways and Means Committee.

I don't consider $36,500 per year as rich. In fact, I don't consider $90,000 as rich, although they are beginning to look well-to-do.

If this is the best the Republicans have to offer, then we need to sit on our hands and wait until a Democratic President comes in and makes some sense on the issue.


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