President Bush delivered some tough news to the country Thursday night: His plan for Social Security includes significant cuts for many recipients.
The news, however, was obscured by the rhetoric surrounding it.
Bush said that the benefits of low-income workers would be protected, while the well-to-do could expect to see their benefits decline in relation to the promises that have been made to them. On the surface, it’s logical. If Social Security is hurting financially, why should it continue to make payments to people who don’t need the money?
According to the Center for Budget and Policy Priorities, a liberal think tank, everyone who makes more than $20,000 a year would see their benefits reduced. With that threshold, middle-income families would carry the majority of the burden in their reduced future benefits. Sure, the rich will see smaller checks, but they have other sources of income in retirement. The Maine Center for Economic Policy has found that the median elderly household in Maine relies on Social Security for 74 percent of its income, and 36 percent of Maine’s retirees rely on the program for more than 90 percent of their income.
For those families, changes in benefits mean a reduced standard of living.
When Social Security was created, President Roosevelt made sure that it was not a welfare program. All workers would contribute, and all retirees would receive benefits. He knew, as anyone who has watched what Congress and the president are doing to Medicaid can see for themselves, that any program that can be stigmatized as welfare is a prime target for deep cuts and even elimination.
The president sounded a tone of reconciliation on Social Security during his press conference. But the details are anything but. He still insists on private accounts, which would drain resources away from the system while adding to the deficit, and he’s added into the mix an idea that would turn Social Security into welfare.
Social Security faces financial troubles in the distant future. There are a number of solutions – including increasing the amount of wages on which payroll taxes are collected and less draconian changes in benefit indexing – that could address the issue. The president instead has chosen a path that, we fear, could ultimately lead to Social Security’s demise.
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