New Social Security Plan Doesn’t Change Dynamics

Mr. Bush has lost much of the political muscle he boasted about after winning re-election. Gas prices are rising, his approval ratings are sagging and Americans are unhappy with his handling of the economy and Iraq. Now he’s trying to sell a Social Security plan that would cut future benefits for all but low-income retirees giving opponents fresh ammunition. Even before Bush unveiled his new proposal and despite a 60-day sales campaign a majority of Americans thought he had mishandled Social Security, too.

Along with his other troubles, Bush has had to prop up two endangered Republicans: House Majority Leader Tom DeLay, accused of ethical lapses, and John Bolton, the president’s choice for U.N. ambassador, criticized for his judgment and treatment of subordinates. It wasn’t supposed to be this hard. Not for a re-elected Republican president with a GOP-ruled House and Senate.

“He’s in far weaker shape than most people expected he would be in the aftermath of the election,” said Margaret Thompson, a professor of history and political science at Syracuse University. “I think he became overconfident about what he could accomplish.” George W. Bush lost the 2000 presidential election by half a million votes and saw the result as a mandate to rewrite the tax code and redraw the map of the world. So when he won the 2004 election by 3 million votes, liberals could have been excused for wondering what the weather would be like in Vancouver for the next four years.

Bush’s second-term agenda was so unapologetically bold — he wanted to privatize Social Security, flatten federal taxes, remake the courts and, on the side, democratize the world — it bordered on the revolutionary. In November, as liberals were sunk in the delirium of defeat, their in boxes buzzing with comic maps dividing North America into the United States of Canada and Jesusland, it seemed that nothing could rein the Republican president in. The president’s not suggesting any changes in the Social Security benefits of Americans over 55 years old or those making under $25,000 a year, but if your salary are $35,000, your benefits would be 20 percent less than today’s recipients. At $59,000, the cut is 30 percent and at $90,00, it’s 40 percent.

The initial reaction in Chicago reflects the national sentiment, which is running about two-to-one against the president’s handling of Social Security. “It would save the program dollars, but again, it’s being done in a way that begins to undermine the universality of the program ,” said Ralph Yaniz, American Association of Retired People. “Bad idea. We are paying into the system, and it doesn’t make any sense for us to be receiving less,” said Daryl Davis, Maywood resident. Elaborating on his Social Security plan, Bush said he is pushing a reform package in which benefits for lower-income workers would multiply faster than those for the wealthiest Americans of retirement age. The president said this plan would help alleviate much of the system’s current funding problems by determining future benefits based on an income test.

“Social Security’s provided a safety net that has provided dignity and peace of mind for millions of Americans in their retirement,” the president said in his opening statement. “Yet there’s a hole in the safety net because Congresses have made promises it cannot keep for a younger generation … I believe a reformed system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off. This reform would solve most of the funding challenges facing Social Security.”

The president said he envisioned a plan in which all future retirees could “count on a benefit equal to or higher than today’s seniors.” The plan would mean that benefits to middle- and upper-income seniors could be cut in later years to bring Social Security’s finances into balance. This would be achieved through “progressive indexing,” which would use someone’s income level to determine how much to slow down the rate of the benefit increase.