Reid v. Bush, round 2 on SS

Topics: Welfare
06 Apr 2005

From: Ervan Darnell









Yesterday, Bush said:
size="2">You see, a lot of people
in America think there's a trust, in this sense -- that we take your
money through payroll taxes and then we hold it for you, and then when
you retire, we give it back to you. But that's not the way it works.

There is no
"trust fund," just IOUs that I saw firsthand, that
future generations will pay -- will pay for either in higher taxes, or
reduced benefits, or cuts to other critical government programs. [2]



That's fair enough. The amount in the trust fund is a tiny fraction of
the total obligation.

The Democratic response was from Harry Reid and Nancy Pelosi. Reid was
previously mentioned in this group as having sensible comments on the
subject. I offer the following as evidence that he too is towing the
Democratic line of denial instead of sensibility:

"These statements could raise needless
doubts among
American and foreign investors about the United States'
willingness to meet its fiscal obligations. " [1]

This is a response of the form 'How dare one observe the
Democratic emperor has no clothes', by ignoring the main point. If
you failed to parse what Reid said, he was trying to imply that Bush
was arguing that T-Bill interest payments would not be made, when Bush
said no such thing.

But, it gets worse, R&P also said:

"We urge you [Bush] to commit to paying
back every Social
Security dollar that has been used for other purposes."

Bush has not spent any Social Security dollars for other
purposes. This is shameless demagoguery on Reid's part. The fantasy
that Reid is referring to is the Democratic "plan" (not that it was
ever passed as a law, nor I think even specifically proposed as on) to
pay for the Social Security shortfall from the (general) budget
surplus. Even were that a bill, it would be absurd on the face of it
to assume the surplus would continue to exist and could be so dedicated
(indeed, once one counts the SS trust fund, there was never any surplus
anyway). So, the Democratic plan for rescuing SS is to spend income
tax revenue on the theory of continued surpluses while pillorying
Bush's plan of spending income tax revenue from obligated T-Bills.
Here's the Dem position in short "Budget deficits are Bush's fault
therefore we can ignore SS insolvency." And we're supposed to believe
the Dems are seriously addressing the issue?

Again, I'm not a fan of Bush's plan, but the head-in-sand contest is
being won by the Dems in this case.


[1]
http://story.news.yahoo.com/news?tmpl=story&cid=584&e=1&u=/nm/20050405/pl_nm/retirement_bush_dc
[2] http://www.whitehouse.gov/news/releases/2005/04/20050405-4.html






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