The Mid-Session Budget Review released by the White House Office of Management and Budget (OMB) today included a proposal that would spend $721 billion – nearly $10 billion more than originally planned in the President’s original Fiscal Year 2007 budget – to turn Social Security into a system of private accounts with lower guaranteed benefits to Americans. The President’s proposal to privatize Social Security includes significant cuts in guaranteed benefits for the vast majority of Social Security recipients through the indexing of initial benefits to prices, rather than wages.
OK, I’ve only included Senator Baucus’s recitation of the facts. Read on as he blasts this proposal. But to be fair and balanced, let’s review the claims made by the OMB:
This update also includes the estimated budget impact from the creation of personal accounts under the President’s Social Security reform proposal. Transition financing for these accounts would not begin to take effect until 2009, and is easily accommodated within the President’s deficit reduction goal … The greatest fiscal danger over the long-term is posed by the unfunded obligations in major entitlement programs – Social Security, Medicare, and Medicaid. The rising costs of these programs are tied largely to two factors: The aging of the population, and the growing use and cost of health care. Both of these factors are largely structural. In 2008, the first of the Baby Boom generation begins to collect Social Security benefits. In 2017, the program will collect less in payroll taxes than it pays out in benefits. At that point, the system will be funded partially by general tax revenue. In 2041, the system is projected to go bankrupt because it will have insufficient resources to pay benefits.
We have to stop as we’ve allowed too many lies to go unanswered. First, the Social Security Trust Fund will be accumulating a lot of reserves that will be paying interest so that reserves will continue to grow after 2017. At some point, this pre-funding will be drawn upon to pay for the defined benefits owed to the baby boomers but this system is not bankrupt as of 2041. It is true that the prescription drug benefit was passed just as we were cutting taxes – so when President Bush brags to us about giving us this allegedly free entitlement and giving us our money back – he is lying through his teeth, but that should not be confused with the solvency of Social Security. But let’s have these dishonest hacks return to the microphone:
President Bush has proposed reforms to address the system’s long-term insolvency while making Social Security a better deal for today’s young workers.
Yes – everyone can be better off as there are free lunches as far as the eye can see! Pathetic!
Sen. Chuck Grassley, R-Iowa, said Wednesday Democrats such as Bruce Braley in the 1st District House race are abusing the issue of Social Security reform for political gain. Grassley said the Democrats are losing Iraq as a political issue to recapture a congressional majority and have fallen back to “scare tactics” about Social Security to fuel their campaign. “I don’t think I agree right now there is a big push by anybody to set up personal accounts” under Social Security, Grassley told Iowa reporters. Braley, in the Democrats’ response to last Saturday’s national radio address by President Bush, said Social Security was “under attack” because of attempts by Bush to privatize it.
We are not allowed to talk about minimum wages either – just flag burning, I guess.