Republican Warns Bush on Social Security Reforms (Lindsey Graham)

[Khephra]

WASHINGTON (Reuters) - A Republican congressional proponent of Social Security reform warned President Bush on Sunday not to rely on a sharp increase in government borrowing to overhaul the federal retirement program.

U.S. Sen. Lindsey Graham of South Carolina said reliance on borrowing to finance an estimated $1 trillion to $2 trillion in transition costs would be irresponsible and could undermine Bush's tax- and deficit-cutting goals.

``What I'm asking of the president, when it comes to the transition costs, be flexible,'' said Graham, who has proposed a temporary rise in payroll tax contributions to finance Social Security's shift to partial privatization.

``I think it's irresponsible to borrow the whole trillion dollars,'' he told ``Fox News Sunday.''

http://www.nytimes.com/reuters/politics/politics-bush-socialsecurity.html

[byronm]

1. So if your going to raise my taxes...

Then put the money in the existing program to make it work.

Don't privatize anything unless its 100%.. get rid of the tax and increase my 401k payment allowances if you really want to let me manage my money.

Don't half ass on my behalf.

[unlawflcombatnt]

13. Social Security Reform

I agree about 401K usage. We already HAVE programs to defer taxes by putting them in private accounts -- 401Ks and IRAs. These are basically taxpayer-funded forms of corporate welfare. The taxpayer can either put the money in the stock market, or be taxed on it. It seems we could accomplish the exact same goals by raising limits on IRAs and 401Ks. That wouldn't remove any funds from social security. However, it would reduce total federal tax revenue. (That should appeal to the Bush administration. They love plans that they don't have to fund.)

In all fairness, the government is trying to accomplish 2 goals with IRAs and 401Ks. They are trying to provide for both retirement and to encourage stock market investment. (Maybe I should say "coerce" stock market investment.) It seems like that should be a sufficient amount of taxpayer subsidization of Wall Street. Bush apparently feels differently.

Social Security is designed to provide for retirement alone. Privatization of social security adds the stock market investment goal back in to the picture. Even more taxpayer income will be used to provide corporate welfare. Even more taxpayer money will go towards increasing the exorbitant salaries of CEOs. Taxpayers will be forced to take even bigger risks with their retirement.

As most of us know, social security is a very non-progressive tax system in the first place.The long-term effects of this less "progressive" taxation are important. At the risk of sounding repetitive, consumer spending accounts for 2/3 of economic activity. The economy desperately needs consumer spending at this point. Forcing taxpayers in to the stock market will increase investment capital (not consumer spending.) This will provide NO benefit to our current economic situation whatsoever. Investment capital is abundant at present.The Wall Street Journal states that the markets are "glutted with capital."

"Real" consumer income, however, IS decreasing. Our economy will not be benefitted by increased investment at the current time. It will be benefitted by increased consumer spending. Borrowing 1-2 trillion dollars to pay for privitization will increase inflation. Inflation will decrease the buying power of the consumer. It reduces the "real", or inflation-adjusted wage. Which, in effect, will decrease consumer spending. Decreased consumer spending means decreased demand for goods and services. And that means decreased demand for labor. This reduces wages and employment. So privatization plans will hurt our economy, not help it.

Privatization plans remove funding from a an already tenuously funded account. Putting less money into the social security account will not improve its solvency. It will decrease its solvency. The increased investment capital provided by this plan provides NO benefit to a market already glutted with capital. Combining this with the inflationary effects of borrowing, privatization will worsen our economy.

--unlawflcombatnt
http://www.unlawflcombatnt.blogspot.com/

[havocmom]

19. Masterfully said! Welcome to the DU, unlawflcombatnt.

Looking VERY forward to reading more from you! Bookmarked your blogspot too.

You have put it so very well. We need to print that up and mail it out!

DUers, the above remarks would be very helpful to have in hand when you call your Congress Critters on Social Security.

[TahitiNut]

26. FICA is the only 'investment' that's synergistic with labor compensation.

As the workforce expands (greater economic enfranchisement) and is compensated fairly for its labor, Social Security benefits by increased contributions, people work longer, and the economy benefits by having more buyers in the market. An increase in the minimum wage has an immediate impact in rising FICA contributions.

Social Security doesn't depend on the increasing enrichment of 'ownership,' it depends on a better and more fairly compensated workforce. As employment conditions improve, people don't get sick or injured - decreasing the OASDI disability outflow. As people are better educated, their productivity improves. Health, safety, education -- all of these are 'good.'

Shifting the additional load onto an 'ownership' interest merely increases the already excessive pressure to lower wages, cut corners on worker health and safety, and reduce the workforce. The (secondary) equity markets have become extraordinarily inefficient providers of productive capital with less than 1% of the capital actually reaching the enterprises in which equity shares are traded. Mergers and acquisitions further increase the pressure, particularly those accomplished through exchange of stock.

With a program like Social Security, we became a national "family" - with all the working adults caring for our elderly parents ... and then, when the national family's children are educated (which we all help pay for) and grown, they take care of us. The legacy of our parents is what enable us, together, to care for them. Instead of competing in the number of children we each have, all of our children are our children ... and all of our parents are our parents. I think this is how it should be. If that's not what a nation really is, then it's nothing.

[GHOSTDANCER]

27. Nicely said, but now hear my meanly said..... Fuq him and his SS plan!!

It's only apparent that this is some fuqin scam to steal more money from the people to shift the idea away from borrowing 2 fuqin trillion dollar tax hikes..... to do what?? Open some new accounts? when we already have 401k & Ira's? Last I heard they were giving you free fuqin appliances to open up savings accounts!! Or play viva las Vegas with my future retirement?

I estimated a transition cost of that magnitude would cost about 12,000 dollars a paying SS member. Sound logical to you?

And what's the fuqin hurry?? Lets let SS take it's course for awhile. It's only been in trouble since george has been king. Estimates are it will be fine for a good 50 years??? OOO thats right all that insurance money to go around.

So fuq him and his whores he rode in with. Don't touch our god damn money you thieving assholes!!!!! Haven't you stole enough from us through Halliburton or the Enron thefts?

[democratic wing]

31. Reforming SS right out of existence

Don't be fooled by any of the bs. This is NOT reform,this is ABOLITION of SS.

The rich bastards promoting "reform" do not need SS themselves just like they don't need universal health care. They are all independently wealthy.

Their philosophy:let the unwashed masses eat cake or else come groveling to their "faith-based" soup kitchens for handouts and religious proselytizing. Close down all secular social programs,starve dissenters into submission,and reap the windfall profits on Wall Street.

Some compassion and morality,huh?

[democratic wing]

32. more on killing Social Security

I forgot about the fat pensions and full health care plans that our politicians enjoy,taxpayer-funded of course. Even though we pay for those perks,the public is not allowed to know anything about them.

"We've got ours,the hell with you,sucker."

[Tandalayo_Scheisskopf]

2. Where's the money coming from, Lyndsey?

Good fairies, with magic wands, floating in on gossamer wings?

Oh, wait...

[stray cat]

3. He wants to raise the cap from 89000 to 200,000 for paying s.s.tax.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x1426239

[MrUnderhill]

8. A tax on JUST those making $89,000 to $200,000 ???

Hard to fault THAT too much.

[Yo_Mama_Been_Loggin]

21. But G DUHbya is opposed to that

It makes too much economic sense something that's in short supply per this administration.

[USAFORME]

12. That raises about 1 trillion over ten years

But transition costs will be more than that...not to mention the shortfall we'll have even if we don't go to private accounts.

[SammyWinstonJack]

29. heh!

:evilgrin:

[Deja Q]

4. Repealing the tax cuts is the only way. CEOs won't notice.

They make 600x more than the typical worker anyway - more as more people lose their higher paying jobs in 'favor' of no jobs or minimum wage retail crap.

[Cocoa]

5. don't be fooled

the real question is, "should SS be privatized?"

This thing by Graham is an attempt to shift the debate to "how should SS privitization be paid for."

Not so fast, Lindsey...

[Inland]

6. So Graham wants to repeat what we did in the eighties

raise taxes on wages and then the republican government uses it to give another income tax cut for the wealthy--

and in twenty years, some republican can just "reform" social security again to screw us out of the benefit, again, after another twenty years of higher taxes?

Forget it. Let the system pay 81% of benefits beginning in 2004. The cures are worse than the disease.

[nodictators]

15. Inland, you're idea is WORSE than Bush's plan

Why would we cut the benefits to 81% when there is $1.7 trillion in the Social Security trust fund. That fund will continue growing until 2018, even as 100% of benefits are being paid.

A CBO study showed that the trust fund won't run out until 2052 if nothing is done. THEN Social Security could still pay 80% of benefits.

There is NO crisis in Social Security. In fact, I believe that a full-employment economy would solve the "problem" without any FICA tax increase. Look at how the drop dead date for the trust fund receded into the future under President Clinton. Greenspan had claimed that 2026 would see the trust fund empty. Now, it's 2052!

[Inland]

18. That's not what I was proposing.

I say that doing nothing--and letting SS pay 81% on the dollar AFTER the trust fund disappears in 2052----is better than the "reforms" presented.

The proposed cures are worse than the disease, and I think you agree with that. I also see that the worst case scenarios keep pushing the dates of insolvency back years go by without the worst case occurring. I would rather rely on luck taking care of the current problem entirely than rely on the good faith AND intelligence AND luck that one has to have to keep the Bushite plan from being a disaster. It seems that the Bushite plan is another faith based initiative, see the NYT business section today:

"The idea that letting people invest some of their Social Security money in the stock market will allow for higher returns is as flawed as a perpetual motion machine."
http://www.nytimes.com/pages/business/index.html

My first choice to reform the system is to raise the retirement age a year or two. My second choice is do nothing. There is no third choice.

[Just Me]

25. Now,...wait a damned minute. WHAT is Bush's plan,...precisely?

Lay it out on the damned table, first,...before judging anyone else's ideas "good" or "bad".

What's Bush's "PLAN"?

[Inland]

28. Oh, wait, you are right, I mistyped 2004

my bad, will edit.

[VivaKerry]

7. But graham will be all too happy to vote for anything

(and everything) bush puts in front of him. So why is he yammering about anything?!

[LynnTheDem]

9. In 1978 bush said SS w/be bust by 1988 if not privatized. bush was WRONG.

Will the US Stenomedia bother to point out bush's bullshit "looming danger" crap in 1978 and that he's still crying "looming danger" in 2004 and it's still total bush bullshit?

Of course not.

[HockeyMom]

10. 20 something kids

I have two 20 something kids; one in college and one working. Both LAUGHED at Bush "privatizing" Social Security (stock market). They both said their friends agreed. If they are any indication, this proposal will have as much support with them as the Prescription Drug Bill did with Seniors.

[LynnTheDem]

11. Yes...but the medicare boondoggle hated by the vast majority of seniors...

Passed.

[KoKo]

14. YEAH! Bring it on! See how the 20,30 somethings feel about forced

payings in contributions to their 401-K's going into the Stock Market pay off in the end. What if when YOU are ready to retire...there's a 2000 Crash...Whoa...what...you will be so Rich it won't matter???

How about that little Bush "kick in" that to "transition" you will be forced to pay more for old Mommy, Granny, Grandpa who are eating "cat food" from the can...What the Hell...tuna is tuna and who cares if they are in their 80's and 90's...the mercury in the catfood won't show up until they are 130 years old...so lets let them live on that...

God forbid that they didn't save enough for their RETIREMENT/NURSING HOME EXPENSES! Let them eat Cat Food...it's good protein...

[doc03]

16. In 2000 Bush said he would put $1 out of every $3 of the

surplus into SS. Since he gave the surplus away to his rich buddies I suggest he get the estimated $1 to $2 trillion from them, since that's were it went.

[chelsea0011]

17. Graham again taking the side of opponent with the easy issues

Once I'd like to see him stand up to his party over an issue near and dear to the Republicans. Social Security ain't it.

[w4rma]

24. No no. SS is perhaps one of *the* biggest issues for Repug Wall Streeters.

They HATE it. Of course getting rid of it will KILL retailers, but the big money people who make their money only off gambling on Wall Street will make a KILLING (it'll be a huge Gold Rush), before the whole economy collapes due to top heavyness.

Graham, however is on the side of the SS destroyers. Graham is only worried about their selling strategy for destroying it. Not on whether it should be destroyed or not.

[Just Me]

20. Apparently, the "thinking" Republicans were NOT listening.

The neoCONfascist imperialists not only seek to rule the world, but also, tear down the existing American fabric in order to create a more perfect MARKET.

When baby BUSH spoke biblically of the necessity to tear down what exists,...he was serious.

Even the loyal "capitalists" will go "WHOA"!

And, the neoCONfacist imperialists,...will go down in history as the most heartless, ambitious FOOLS in human history 'cause,...the "powerful" no longer write history,...THE PEOPLE WITNESS AND DOCUMENT EVENTS.

[VegasWolf]

22. Mr. "tax the middle class" Graham has a "plan". Count me out! n/t

[w4rma]

23. Simple answer. Wall Street should NOT get their greedy palms on our SS.

<period> And especially if we are going to have to pay them 2 trillion dollars so that they can steal our SS money.

[Hand]

30. Prediction:...

Graham will be officially outed within the next, say, two weeks. Alternatively, he will abruptly change his mind on this issue for no apparent reason.

[democratic wing]

33. CBS,CNN Mislead on Social Security

The "liberal" media strikes again!

http://www.fair.org/activism/cbs-cnn-social-security.html

"The debate over Social Security privatization could very well be the most important domestic story of the coming year. Unfortunately, recent media discussions of the topic are built on flawed assumptions and inaccurate information." (no kidding)

Take action,don't let MSM get away with this:

"Tell CNN NewsNight to offer a broader debate in its upcoming reports about Social Security, including the viewpoints of those who do not believe that Social Security faces an imminent crisis. And ask CBS Evening News if it plans to air a clarification noting that the "man on the street" it used to explain Social Security's future was in fact a paid proponent of Social Security privatization."