I just copied this from today's Center for American Progress' newsletter "Progress Report." It all applies to what we are talking about here.
I had heard late last week about the SS privatization plan not addressing the "shortfall" crisis they've been using to sell it. What the hell is going on here?
I agree with you, anomaly, about national healthcare. I think it is far more important and would be happy to pay whatever I had to in taxes to support it. I think it's time for Americans to grow up and learn that all this money grubbing is leading to the slow, shallow death of the American soul. If you love something, set it free, yes?
(Yes, still dramatic, still reading The Lord of the Rings, Pac, and it's ringing lots of my bells.....yes, my precious.....)
BUDGET
Bush's Middle Class Tax Hike
A closer look at the administration's 2006 budget shows an economic agenda promoting the wrong choices and wrong priorities. Rolling back massive tax cuts for millionaires is off the table, but the Bush administration has no qualms about raising taxes on average Americans. The budget President Bush submitted to Congress yesterday imposes $5.3 billion in new, regressive taxes. (They are conveniently listed in table 18-3 on page 305 of the Analytic Perspectives supplement to the budget.) The administration's budget contains new taxes that will increase the price of a six pack of beer, an airline ticket and prescription drugs for veterans. Meanwhile, the budget cuts funding for education, public health and environmental protection and includes $1.4 trillion in new tax cuts for the wealthy. Welcome to Bushonomics. (Sound off on the president's middle-class tax hike on ThinkProgress.org.)
THE SHELL GAME: No matter which way you slice it, the administration's budget is egregiously fiscally irresponsible – by its own estimates, it will result in a $390 billion deficit in 2006. Worse, that figure is only arrived at through trickery. The budget includes over a billion dollars in revenue from drilling in the Arctic National Wildlife Refuge (ANWR), even though Congress hasn't authorized such drilling and has rejected President Bush's proposal to open ANWR to oil exploration for the last four years. Budget Director Josh Bolten defended the move, claiming, "the budget is the right place to present the entirety of the president's policies, so all of his proposals are reflected in there." Really? The Bush budget excludes all funding for operations in Iraq and Afghanistan and the administration's $2 trillion Social Security package.
KICKING THE NEEDIEST WHILE THEY'RE DOWN: During the Bush administration, more and more Americans are struggling. The Center for Budget and Policy Priorities sums it up: "The number of poor went up for the third straight year in 2003, the share of total income that goes to the bottom two-fifths of households has fallen to one of its lowest levels since the end of World War II, and the number of people lacking health insurance rose to 45 million in 2003, the highest level on record." Yet the Bush administration is cutting programs that help people get back on their feet. For example, the administration's budget proposes "a five-year freeze on child care funding that...will result in cutting the number of low-income children receiving child care assistance by 300,000 in 2009." The Bush budget also cuts $45 billion from Medicaid, the program that provides basic health coverage to the poor.
THE MEDICARE MESS: The industry-backed prescription drug bill President Bush jammed through Congress is a bad law that keeps getting worse. While the bill was pending before Congress, the administration promised the bill would cost $400 billion over 10 years and threatened to fire the Medicare actuary who knew that figure was too low. Later, the administration revised its estimated price tag to $534 billion over 10 years, largely due to excessive payments to private insurers and HMOs. Now, in the most recent budget, the Bush administration estimates the bill will cost $395 billion over five years. In the meantime, drug companies have already jacked up their prices enough to offset any discount to seniors.
FUNDING FOR ABSTINENCE-ONLY PROGRAMS INCREASED: Apparently, President Bush isn't concerned that abstinence-only programs are misleading the nation's children about sex. A study last year found that some of the most popular programs pushed lies, such as claiming that mutual masturbation can cause pregnancy and condoms fail to prevent the transmission of HIV 31 percent of the time. President Bush's budget increases funding for abstinence-only education by $39 million, to a total of $209 million.
FUNDING FOR CLEAN WATER SLASHED: Good news for Evian, bad news for everyone else. President Bush proposes reducing federal funds states use to improve water quality by $369 million. The federal contribution to the program is now just $730 million, down from $1.98 billion four years ago.
SOCIAL SECURITY
Hot Air in Motown
President Bush heads to Detroit, MI, today as part of his aggressive marketing campaign to sell his deeply flawed – and very expensive – Social Security plan. Don't hold your breath waiting for the president to flesh out more details, however; the Detroit Free Press reports "the traditional question and answer period after the speech has been dropped for Bush's visit." (There may be good reason for this: as the New York Times wrote this weekend, when it comes to the Bush plan, "The more we learn, the worse it gets.") Don't believe his hype. Here are the basics to keep in mind when listening to his sales pitch.
IT'S A BENEFIT CUT: The private accounts President Bush wants to create do nothing by themselves to reduce the shortfall. A White House memo to conservative allies which was leaked to the press last month even "acknowledged that individual accounts themselves would do nothing to close the projected Social Security shortfall." What President Bush really is pushing are giant benefit cuts, which he said during his State of the Union Address were "on the table."
IT'S A TAX HIKE: President Bush has resisted raising the payroll tax to pay for Social Security reform. But don't be fooled: his Social Security plan is a tax hike. Here's how it works: President Bush is proposing keeping the Social Security wage tax at the same level while reducing benefits for future retirees. "By keeping the tax the same and reducing future benefits," Newsweek reports, "Bush is like a candymaker that cuts 46 percent off a chocolate bar but charges the same 75 cents for it. In other words, his plan would effectively increase the Social Security tax."
IT INCREASES THE DEBT: The Bush plan also entails "significant new federal borrowing." Vice President Cheney this weekend admitted the government would have to borrow $754 billion over the next decade to set up the private accounts. (That's low-balling the number – most experts agree the first ten years of the Bush tax plan would cost about $2 trillion.) And after that? "Trillions more after that,'' he admitted. Large-scale borrowing carries a huge price for the middle class. When the federal government runs up a large debt, that means less money is available for average Americans to borrow when they want to buy a house or a car or pay for college tuition. That smaller pool of money available for loans translates into higher interest rates – which not only puts a squeeze on individual consumers but also slows the rate of economic growth. That means, in the long run, fewer jobs, low wage growth and less money coming into the federal Treasury.
THE MONEY'S NOT REALLY YOURS: President Bush is trying to capitalize on the fact that Americans like to own things to sell his program to chop Social Security benefits. The reality of his plan is a far cry from the private ownership he's touting, however. For example, instead of private plans that let Americans control their own investments, there are tight restrictions on which conservative stocks and bonds the public will be allowed to buy. And, the New York Times writes, "the more restrictions there are, the harder it would be for people to achieve the outsized returns the administration has generally promoted to sell the public on private accounts." Also, Bush has played up the fact that his accounts can be passed on to one's heirs. In reality, unless you die before you retire, there's not going to be a lot to bequeath. Retirees under the Bush plan will be required to use the money in their accounts to buy the annuities that will then provide them with their post-retirement income. The only money left to pass to heirs is whatever is left over – if anything – from purchasing the annuities. As Business Week puts it, "The problem isn't the restrictions on ownership in the Bush plan. It's the false billing, which is aimed at drumming up support from a skeptical public."
PRESIDENT BUSH EXPLAINS IT ALL: Confused about how President Bush's Social Security privatization proposal works? Here is his explanation: "Because the – all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those – changing those with personal accounts, the idea is to get what has been promised more likely to be – or closer delivered to what has been promised. Does that make any sense to you? It's kind of muddled." (Thanks to Atrios.)
