resident Bush isn't trying to reform Social Security. He
isn't even trying to "partially privatize" it. His plan is, in
essence, to dismantle the program, replacing it with a system that
may be social but doesn't provide security. And the goal, as with
his tax cuts, is to undermine the legacy of Franklin Roosevelt.
Why do I say that the Bush plan would dismantle Social Security?
Because for Americans who entered the work force after the plan went
into effect and who chose to open private accounts, guaranteed
benefits - income you receive after retirement even if everything
else goes wrong - would be nearly eliminated.
Here's how it would work. First, workers with private accounts
would be subject to a "clawback": in effect, they would have to
mortgage their future benefits in order to put money into their
accounts.
Second, since private accounts would do nothing to improve Social
Security's finances - something the administration has finally
admitted - there would be large benefit cuts in addition to the
clawback.
Jason Furman of the Center on Budget and Policy Priorities
estimates that the guaranteed benefits left to an average worker
born in 1990, after the clawback and the additional cuts, would be
only 8 percent of that worker's prior earnings, compared with 35
percent today. This means that under Mr. Bush's plan, workers with
private accounts that fared poorly would find themselves
destitute.
Why expose workers to that much risk? Ideology. "Social Security
is the soft underbelly of the welfare state," declares Stephen Moore
of the Club for Growth and the Cato Institute. "If you can jab your
spear through that, you can undermine the whole welfare state."
By the welfare state, Mr. Moore means Social Security, Medicare
and Medicaid - social insurance programs whose purpose, above all,
is to protect Americans against the extreme economic insecurity that
prevailed before the New Deal. The hard right has never forgiven
F.D.R. (and later L.B.J.) for his efforts to reduce that insecurity,
and now that the right is running Washington, it's trying to turn
the clock back to 1932.
Medicaid is also in the cross hairs. And if Mr. Bush can take
down Social Security, Medicare will be next.
The attempt to "jab a spear" through Social Security complements
the strategy of "starve the beast," long advocated by right-wing
intellectuals: cut taxes, then use the resulting deficits as an
excuse for cuts in social spending. The spearing doesn't seem to be
going too well at the moment, but the starving was on full display
in the budget released yesterday.
To put that budget into perspective, let's look at the causes of
the federal budget deficit. In spite of the expense of the Iraq war,
federal spending as a share of G.D.P. isn't high by historical
standards - in fact, it's slightly below its average over the past
20 years. But federal revenue as a share of G.D.P. has plunged to
levels not seen since the 1950's.
Almost all of this plunge came from a sharp decline in receipts
from the personal income tax and the corporate profits tax. These
are the taxes that fall primarily on people with high incomes - and
in 2003 and 2004, their combined take as a share of G.D.P. was at
its lowest level since 1942. On the other hand, the payroll tax,
which is the main federal tax paid by middle-class and working-class
Americans, remains at near-record levels.
You might think, given these facts, that a plan to reduce the
deficit would include major efforts to increase revenue, starting
with a rollback of recent huge tax cuts for the wealthy. In fact,
the budget contains new upper-income tax breaks.
Any deficit reduction will come from spending cuts. Many of those
cuts won't make it through Congress, but Mr. Bush may well succeed
in imposing cuts in child care assistance and food stamps for
low-income workers. He may also succeed in severely squeezing
Medicaid - the only one of the three great social insurance programs
specifically intended for the poor and near-poor, and therefore the
most politically vulnerable.
All of this explains why it's foolish to imagine some sort of
widely acceptable compromise with Mr. Bush about Social Security.
Moderates and liberals want to preserve the America F.D.R. built.
Mr. Bush and the ideological movement he leads, although they may
use F.D.R.'s image in ads, want to destroy it.
