THIS IS IMPORTANT!

"The Hill" Tip Sheet for March 4, 2005:

Good,

We will start to see what someones plan looks like on paper and we can start debating a real document instead of a verbal proposal.

Is there a link for this article? Also, it might be a good idea to post it in the Social Security forum, or maybe in the Online Cafe. People are really eager to see what they are going to come out with.

I was in a meeting yesterday with our state's Vice-Chair of the Democratic Party. We were told the Republicans are going to war this weekend on Social Security. The first rounds have been mild..this time privatizing Social Security is going forward with a full court press.

We have to beat Bush on this one if we want any chance to take back the White House in 2008.

It's like I said a while back, I didn't expect Bush wanted the Privatization plan, he really didn't expect that to fly, it's what he will compromise for that we need to watch. You always go for the biggest prize but settle for what you wanted in the first place.

Excellent observation.

The Democrats and groups like Moveon.org, AARP, etc., were effective in convincing the public that Bush's talk about reforming SS was only talk --with no real plan.

Now, it appears that the Republicans are going to be out with their spin machines to sell the public that SS is in crisis and needs to be overhauled now.

I hope that the Democrats, AARP and others havent given up --and let the Republicans sail on without a fight.

We need to be very vigilant with letters to our Congressmen and the media.

I agree with this.

I think GWB wanted to do something with SS but did not know what exactly to do.

He stated some things he thought might work and asked people to come to him with ideas. WJC had some ideas in the late 90s but so far the only plans that are coming out are from repubs.

I guess if those plans are the only ones that go to conference then they will be what we get. Where are the Dem. plans?

BushCo hasn't even put out the details of their plan for the manufactured SS 'crisis'. The Dems have no reason to put forward a plan of any sort at this point, other than to oppose BushCo.

Like I said I do not think BushCo has a plan that is what he wants congress to come up with.


What was WJC talking about when he proposed his USAs?

How has the situation improved in SS since that time?

I assume that WJC refers to Clinton. But I don't know what you mean by 'USAs'.

I recall Clinton proposing that some Social Security funds might do well invested in the market, back when the market was booming. But he was not recommending siphoning off the money that is the basic funding for SS. Plus this was back when we had a surplus, before BushCo pillaged it. Remember the surplus?

WJC yes Clinton
USAs Universal Savings Accounts
Market is still doing well, last 10 years it has posted a gain of about 12%, this includes the down years of 2000, 2001, and 2002..

Yes I do remember the surplus. That is what my comment was about, things have not become any better since WJC was saying we have a SS problem.

Krugman's column about the problems with any such compromise may prove very helpful:

Just Say No
By PAUL KRUGMAN
Published: March 1, 2005

President Bush's effort to hustle the nation into dismantling Social Security as we know it seems to be faltering: the more voters hear about how privatization would work, the less they like it.

As a result, some Republicans are reported to be talking about a compromise in which they would agree to some kind of tax increase, probably a rise in the maximum level of earnings subject to the payroll tax. They would offer to use the revenue from that tax increase, rather than borrowed funds, to establish private accounts, thereby assuaging fears about the huge debt buildup that would take place under the administration's plan. They might even agree to make private accounts an add-on to traditional benefits, not a replacement.

But it would still be a bad deal. Creating private accounts in the current environment, no matter how they are financed, would be a mistake.

First, think about the fiscal implications. We have a huge budget deficit, largely caused by Mr. Bush's decision to cut taxes while waging war. Any realistic plan to bring the budget deficit under control will have to include tax increases, especially if we want to avoid the harsh cuts the administration is trying to impose on Medicaid and other essential programs.

There may be a place for a rise in the payroll tax maximum in such a plan: AARP, among other groups, has proposed such a rise as one way to improve the Social Security system's long-run finances. Devoting the extra revenue to the trust fund would also reduce the overall budget deficit.

But if the revenue from a rise in the payroll tax maximum was used to subsidize private accounts rather than to bolster the trust fund, it wouldn't address any urgent priorities: it wouldn't help the long-run finances of Social Security, it wouldn't reduce the budget deficit, and it wouldn't support crucial programs like Medicaid.

What it would do, instead, would be to get in the way of any return to fiscal sanity. After all, raising the maximum taxable income would be a fairly stiff tax increase for some taxpayers. For example, someone making $140,000 a year might owe an extra $6,000. And the taxpayers who would be hit hardest by this tax increase would, in many cases, be the same people who will face a growing burden from the alternative minimum tax.

As a result, an increase in the payroll tax maximum would make it much harder to pass other tax increases, frustrating efforts to do something about the deficit.

Furthermore, it's all too likely that any compromise that created private accounts would turn into a Trojan horse that let the enemies of Social Security inside the gates.

This might happen almost immediately, as a result of the legislative process. As you may have noticed, moderates don't run Congress. Suppose that a moderate senator thinks he has struck a deal for fully funded private accounts that don't directly undermine traditional Social Security. Almost surely, he would be kidding himself: by the time the conference committees were done with the legislation, the funding would be gone or greatly reduced, the accounts would be bigger, traditional benefits would have been cut, and the whole thing would have turned into a privatization wish list.

Even if that didn't happen, private accounts, once established, would be used as a tool to whittle down traditional guaranteed benefits. For example, conservatives would use the existence of private accounts, together with rosy scenarios about rates of return, to argue that guaranteed benefits could be cut without hurting retirees.

In short, anyone who wants to see the nation return to fiscal responsibility, wants to preserve Social Security as an institution or both should be opposed to any deal creating private accounts. And there is also, of course, the political question: Why should any Democrat act as a spoiler when his party is doing well by doing good, gaining political ground by opposing a really bad idea? (Hello, Senator Lieberman.)

The important thing to remember is why the right wants privatization. The drive to create private accounts isn't about finding a way to strengthen Social Security; it's about finding a way to phase out a system that conservatives have always regarded as illegitimate. And as long as that is what's at stake, there is no room for any genuine compromise. When it comes to privatization, just say no.

E-mail: krugman@nytimes.com

http://www.nytimes.com/2005/03/01/opinion/...Ed%2fColumnists

From the above Krugman piece:


Have the Dems gained ground (seats) anywhere?
Pres.
House
Senate
Gov.
State Govs.
Local Govs.

This is just a question if I understand Krugman's piece correctly

But BushCo has already admitted that private accounts won't fix the problem. And setting them up will require massive borrowing, on top of the deficit they've already piled on us.

The govt needs to stop spending money they don't have, stop cutting taxes while there is a deficit and a war going on, and stop spending social security money on things other than social security.