Wednesday, January 26, 2005

A post by Steve Clemons on his site, The Washington Note got me thinking. What is the great threat to marriage and why does the "breakup" of marriage constitute such a grave threat to our society? (It must be noted that most of the cries of doom come from folks who mourn the decline of proper, straight and christian marriages.)

I understand the idea that marriage is the basic union that helps define our social system. Yet what I and proboably an overwhelming percentage of this country know is that family is not necessarily blood.

My Godmother and her family is as much my family as my cousins and sisters are. My sisters and cousins and uncles and aunts are all related to me through marriage and blood, genomes, etc. My Godmother's family is related to me through a social ceremony. I even have an aunt who isn't my mother's sister, but her best friend. Technically, she isn't my "aunt", and so if there was some extreme case she has no de-facto claim of guardianship, but she is certainly my aunt.

How many extended non-blood related family groups are out there? How many people have been helped, loved and supported by a group of people who are not bound to them through marriage?

The nature of relationships extends far beyond our ability to cleanly define them. We define them for our own piece of mind or for technical reasons (legal reasons of custody, taxes, etc.). Yet those "defined" relationships are only as valid as the relationship of the individuals involved.

The Catholic Church recognizes the right of a woman to annul the marriage if her husband is abusive. Certainly, no one would say that an abusive marriage is a valid relationship, yet in the abstract the dissolution of a marriage is looked upon as a symptom of a failing society.

Certainly we should support couples who want to pledge themselves to each other in a public ceremony, but that should not be the barometer of the health of our society.

Rather, we should look to how much we as a society support those we are not legally obliged to stand by. There are countless single-parent and non-married families that are just as morally sound and have just as much of a positive impact on society as any straight, christian couple with the 2.5 kids.

Just because certain vocal individuals have a preconceived notion of what is the "correct" form society should take does not mean we should abandon our ability as a society to decide what is best. Biblical definitions may serve to give their opinions "weight", but the New Testament is a rather straightforward piece of work (barring Revelations) and it is far less concerned with the old testament style strictures than with the basic idea of loving others as yourself.

The NT gives many of society's most doctrinaire critics difficulty because its basic message is not strictly disciplinary nor focused on legal definitions. Jesus supped with the sinner after all. I think that was the point of the story of performing miracles on the sabbath. Get caught up in the technicalities and you miss the point. The whole spirit vs. letter thing.

Perhaps we should focus less on who's with whom and more on the quality of the relationships.

Tuesday, January 25, 2005

Once again, Josh Marshall is on top of the Social Security debate. He makes an excellent point on what has to happen next with the Social Security debate:
.This is key to the entire unfolding debate: do Democrats start looking for ways to ameliorate the damage caused by the president's phase-out plan or do they try to push the debate further on to why Social Security is good for America and should be retained. (Needless to say, whether Democrats do start to soften their position will have a direct and immediate effect on the willingness on Republicans to get back on board with the president's phase-out program.)

The difference of opinion and values is pretty straightforward: Democrats support Social Security, the president supports private accounts. What is there to do but to find out where everyone stands?
This is a point I have been trying to get across to people I have spoken to about the Social Security issue, this is not a fiscal but an ideological debate.

If Democrats allow the Republicans to keep the debate in the fiscal realm then they have little chance in making the point that a system of private accounts is completely different then the Social Security system.

The debate needs to be kept alive so that everyone understands what Social Security is and what the Republican phase-out plan actually means. The Republicans are counting on trillion dollar sums and infinite projections to intimidate people from learning about Social Security and thus understanding that the Republican plan is not Social Security but a government-administered retirement account system.
While I know it is good to have a person who is familiar with an industry serve as the government's chief overseer in that area, but isn't this taking it just a bit too far? Terry Ganey has a piece in the Post-Dispatch today looking at Blunt's appointment process.
Blunt gets industry input in choosing agency heads JEFFERSON CITY - Gov. Matt Blunt, who has said he wants to make Missouri more business friendly, is using industry representatives to help pick the state officials who will regulate the industries' operations.

Dale Finke, Blunt's nominee to run the Department of Insurance, was one of three names submitted to Blunt by a five-member committee of insurance company executives, lobbyists and representatives of the medical profession.

Blunt declined Monday to name the industry insiders who are helping him pick his Cabinet. Blunt said those decisions were personnel matters that are confidential under the state's Sunshine law.
So not only are the industries who will be affected by government oversight picking the officials who head the departments, Blunt refuses to disclose who is vetting these individuals.

Of course, since Blunt set up the vetting process he doesn't have to abide by their recommendations.
One member of the committee that recommended Finke's name to Blunt said interest groups have always sought input in the process.
"I didn't see anything wrong with it at all," said Tom Holloway, a lobbyist for the Missouri Medical Association, whose members helped fund Blunt's campaign last year. "I wouldn't call it a screening process. There was nothing binding. We made recommendations, and the governor was free to pay attention to them or to ignore them."
Blunt's assertion begs the question: what is the point in appointing the committees in the first place if their recommendations would be tossed aside?
And Finke said he did not see a problem regulating insurance after having been an agent.

"Most insurance agents operate for the benefit of the policy holder," Finke said.
What should also raise some questions is Finke's apparent belief that businesses' operate not for their own benefit, but for the benefit of their customers.

In a billion dollar industry such as insurance, I doubt that there are many corporate officers who have as pro-customer point of view as Finke does.
Steve Soto over at Left Coaster gives a rundown own Reid's announcement of the Democratic Senate agenda. While he points out that this is not a unified plan, it brings together a lot of good ideas Democrats can use in the upcoming session.

I especially like Senate Bill 19, the Fiscal Security for a Sound Future Act. Fiscal responsibility is an area in which the Democrats can really smack around the Republicans. The only problem is, deficit reduction never won an election. It is responsible governance and it is the right thing to do. The Bush Administration has given up on taking any responsibility for this country's fiscal future and the "fiscal conservatives" in congress are letting him run with his bankrupt plans.
Here's something from Bloomberg News, which isn't exactly
a bastion on wild-eyed liberalism. More a den of
market-trend bores.

"The Trents are part of a demographic phenomenon in the
U.S. unmatched in any of its major trading partners: Americans are having more babies. The trend, combined with an annual inflow of immigrants that is more than the rest of the developed world combined, may undercut a key argument behind President George W. Bush's plan to allow private Social Security accounts: that the current system faces an emergency because of a sharp decline in the size of the future U.S. workforce.

Even Newt Gingrich, the Republican former speaker of the House of Representatives and a supporter of private accounts, says, ``The combination of higher birth rates and more immigration makes the United States the healthiest of developed nations. This is not a crisis.'''

Here's the link to the story.

If supporters of private accounts want private accounts, then they should state their reasoning clearly. They should start a debate on the merits of their ideas. Fabricating a false crisis is, well, deception, plain and simple. If that is how the administration wants to ram its proposals through, well, they better be willing to call uncle whent someone points out the truth. As with most political scandals that develop into law-breaking, its never the act but the deception that get the actors into the most trouble.

Monday, January 24, 2005

Howard Dean spoke here in St. Louis while he was in town for the Midwest Regional DNC meeting. The speech itself wasn't all that surprising for folks who have been listening to Dean or his supporters. In this case he was speaking to the local chapter of Democracy for America, formerly Dean for America, so his speech was more rally than anything.

Dean's basic message is one that I think the DNC should pay greater attention to. In effect his argument was that the Democrats are playing by the Republican's rules and that it was time for the party to embrace the aspects that make it the Democratic Party and not the Republican party. Some of the leaders in the DNC seem to think that playing "Republican-Lite" messages will help shore up support.

Dean, I think, correctly argues that the "Republican-Lite" campaign strategy has simply allowed the Republicans to cloak their plans in Democratic language (think Compassionate Conservativism, William F. Buckley must have choked on his brandy at that one) thus blurring the lines between the two parties.

You combine liberal-sounding initiatives with Republican-style campaigning (I am right, and I know it because I am a Christian) and you have a strategy that can cover a lot of ground. Republicans are in the convenient position of being able to argue for government-sponsored reforms (a liberal characteristic) while at the same time cutting government programs (a conservative characteristic).

At the same time the Republicans have used their vocal evangelical christian supporters as backdrops for their argument that Democrats are "out of touch" with American "values", despite the high rate of religious participation among card-carrying Democrats. Many anti-war and pro-gay rights efforts have been led by liberal christian denominations and ministers and rabbis are often among the leaders of liberal/Democratic initiatives.

Very few serious people could ever argue against the fact that the events of 9/11 have provided a rhetorical hammer for the Republican leadership. To say so is, unfortunately, not a cynical position. President Bush did a great job in the days following the attacks. He did rise to the occasion and acted, admirably, as the leader of one country under attack. Unfortunately, the events quickly became a shield behind which the Republicans could act with impunity. One famous quote from House Majority leader Tom Delay R-Texas states, "Nothing is more important in a time of war, than cutting taxes."

In effect the Republicans have out-maneuvered the Democrats by stealing their best lines and then out-shouting them.

Dean pointed out that in the 2004 election, Florida voted for President Bush and to raise the minimum wage. The minimum wage issue won a much greater percentage of the vote (%70 voting for the increase) than Bush's margin (%52 to %47). That is a lot of room for growth.

There seems to be a consensus that Dean will most likely be elected the head of the DNC despite the objections of some prominent members such as the Clintons. If so, it will most likely be a positive turn of events for the Democratic Party. On the national level the Democrats have been losing across the board for years, yet at the local level they are making gains. If there is one thing that characterized Dean's campaign for the Democratic nomination, it was the success of the local grassroots supporters, the ones that developed into DNF.

Dean's rise to the head of the DNC will of course eliminate any possibility of running for the nomination in 2008. In fact he has explicitly stated he would not even entertain the notion. If that dedication to rebuilding the Democratic party is genuine, Dean could help lead the Democrats out of a slump that many Democrats in national leadership positions seemed baffled by.

To steal some style from Aaron Sorkin, maybe it is time to let the Democrats be Democrats.

Tuesday, January 18, 2005

There is a good point at the end of Josh Marshall's post below. If the individual can put the majority of their tax responsibility into private accounts, how long will it be until the drumbeat starts up that the employers should be able to do so as well. If that passes as well, then the entire system changes. It is no longer SS as we know it, a pay-as-you-go system that ensures some modicum of income for retirees, to a government administered 401k program. If the true soul of the conservative yearns for a smaller, less-intrusive goernment this is the exact opposite what should be done. In fact, the Social Security program as it stands today is a model of efficiency and good planning.

Predicting the future of social security is almost an entirely demographic exercise. Cross that with DGP and employment growth and you can make some pretty trusty estimates. There are no fluctuating P/E ratios, stock bubbles, or corporate malfeasance that can potentially wipe out trillions of dollars of value when it comes to the Social Security system. Its security (hence social security) rests on the stability and existence of the government.

As my father insisted, there is no physical money in a box someplace. The surplus tax revenue is invested in Treasury Bonds (which are as good as gold. Via the Constitution: 14th amendment: Section. 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned) and until it is necessary to start cashing those in, the currently employed subsidize the retired.

Given that there is no actual "SS account" it can not be bankrupt. The only way in which the SS system can be bankrupt, which the President claims will happen, is if the government goes belly-up. The surplus can and will be used up, but that is exactly why it was created in the first place. The surplus was created to be there when the boomers begin to retire so that if the system was unable to cover the outlays, there would be money backing it up. The actual depletion date of the surplus (currently at 2042) keeps getting pushed back as the actuaries make adjustments for economic growth and demographic changes.

Government sponsored savings incentives already exist. The reason people don't save at the levels they did in the 70's and 80's is because through the 90's borrowing accelerated like never before. The average family carries thousands in debt. Deby isn't inherently a bad thing, but the financial maintenance on debt can drain any extra income.

The administration needs to come clean on this entire effort. There is a deliberate deception going on here. There is no "crisis" and the money is there. President Bush talks about the system as if there is no money there because it is the form of Bonds. Given that every day billions change hands every day in the bond market, I think anyone with one iota of experience looking at economics and the market system will tell you that it is nonsense to say the money isn't there. The administration is deliberately counting on the inexperience of the average voter to pass this structural change. Bush's own chief strategist said that to get this past will require convincing the people there is a crisis.

If the administration is truly interested in ensuring the stability of the SS system he should do as least as much as Reagan was willing to do which was to establish a non-partisan panel of experts to examine the options, not simply push through an ideologically motivated effort ("I don't need to tell you that this will be one of the most important conservative undertakings of modern times," Peter Wehner.).
From a memo written by Bush's chief of strategic initiatives, Peter Wehner:
"I don't need to tell you that this will be one of the most important conservative undertakings of modern times. If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate."

And from Josh Marshall:
"Let's not miss the big news in today's article in the Times about Dick Cheney. The vice president supports putting over 95% of the employee-side

Unfortunately, the authors construct the sentence in a somewhat murky fashion. But the key passage is this one: "Mr. Cheney is said by associates to favor creating investment accounts into which workers could deposit 4 percent to 6 percent of their earnings that are subject to the Social Security payroll tax."

In orther words, Cheney supports putting 4 to 6 percentage points of each individual's 6.2% contribution into a private investment account and taking it out of the Social Security system.

(Just for maximum clarity, that means about 97% of the employee's payroll tax contribution, which is 6.2% of their salary up to $90,000. And it's about 48% of the total Social Security money going into the program for the given individual since the employer also kicks in another 6.2%.)

So, in other words, the initial 'partial' phase of the Social Security phase-out, turns about to be 50% phase-out. And the only money going into Social Security comes from the employer. How long do you figure that lasts?
-- Josh Marshall

A copy of the article is here:

The Wehner memo quote above goes on to state that the initiative is to try and stabilize Social Security and ensure its solvency into the future. Yet if you take into account Vice President Cheney's statement, it think it is entire clear that the true motivation is to eliminate Social Security as it is established today.

The language the administration uses when talking about the SS system is designed to frighten and confuse the average person. Even people who have experience in this area have trouble sorting out the bad from the good. Terms such as "unfunded liability", "trust fund" and "bankruptcy" are all designed to make it sound like the person is knowledgeable about the subject while they attempt to scare the listener into going along with their position.

Few people seem to want to acknowledge the ideological divide between the two sides. This is not a fiscal argument, as the administration and its spokespersons contend, but an ideological argument.

Saturday, January 15, 2005

Over at Tapped, Paul Starr lays out the best explanation of Social Security and why phasing it out is a bad idea. Social Security may be yet another example of people not knowing how much they like something until it's gone.

In addition, Josh Marshall runs down a New York Times article on the administration having the Social Security administration use its own resources to advocate for its own elimination. As Marshall says, it makes the Armstrong Williams incident look like a blip on the radar.

There must be some sort of institutional ethics that decry this type of action. Can the administration use taxpayer's money to advocate a political position? No matter what the administration may say, this is a political maneuver. A leaked memo from Bush's director of strategic initiatives, Peter Wehner, makes it obvious that the destruction of Social Security is a longed-for conservative goal and they are solidifying their strategy to do so.

No matter what side of the argument you fall on, keeping Social Security or eliminating it, there is little denying the fact that the administration is lying about the situation in order to further their goal. There is so little fact included in the administration's arguments that simply reading the Social Security Trustees report blows their argument to pieces.

This is not an argument about the facts, but a clash of ideologies. The media should either expose the lies or stop confusing the argument with incomplete arguments and few facts.

Tuesday, January 11, 2005

In the wake of the WIlliam's controversy, House Democratic Leader Nancy Pelosi is taking the initiative to track down other "journalists" who may be on the administration's payroll.
House Democratic Leader Nancy Pelosi and other senior House Democrats asked the General Accountability Office to examine the use of covert propaganda by departments and agencies under the Bush Administration.
The GAO has in two previous occasions cited the administration for violating the congressional prohibition on using propaganda in cases in which it created PR pieces designed to look like news segments. They are more commonly referred to as "infomercials" but instead of Ron Popeil's Solid Flavor Injector we are talking about multi-billion dollar government programs.

These are designed to mislead the public into supporting programs that do not pass critical inspection by government bodies. It is an end-around the accountability system. Given the administration's record in the area of accountability all possible review should be given to their proposals.
In the past couple weeks I have spent a good deal of time paying attention to the Social Security elimination debate. The thing that bothers me the most is not the mendacity of the administration, with their record I think it is a given that you can not trust their rhetoric, but the fact that they have managed to so overwhelmingly define the terms of the debate.

In case after case the President's initiative is referred to as "reform" when it is no such thing. To turn over Social Security funds to private control is to effectively eliminate the program. Their is a dedicated tax that workers pay to help support retirees. In time, we will become the retirees and we will receive support from the program. Social Security is not a retirement program. It is not an IRA, a 401k or any other type of investment program. Understanding this is key to understanding the conservative goal.

Social Security is the shining jewel of the New Deal. It is an enormous social entitlement program that works efficiently although it requires periodic adjustment to remain efficient. It is enormously popular with most voters and given the coming boomer retirement wave, it will likely gain even more defenders. To the conservative faction in this country, a successful social program runs counter to everything they believe. This anti-government mentality will lead them to destroy one of the truly successful programs in U.S. history.

Conservatives believe in the primacy of the private sector and market forces. Well, that is what they say they believe. In fact, conservatives are more than willing to allow government intervention in the form of business subsidies. They get around their contradictory stance by stating that this is necessary to ensure that the economy works and is the only form of intervention allowed by the constitution. As President Coolidge is credited with saying, "the business of business is business."

While it can be easily demonstrated that business subsidies can contribute to increased business, there is nothing to indicate that subsidised education, health care and other social interventions don't have an effect on increased productivity, sales and growth.

I think conservatives like to think of business subsidies as "clean", while social programs are "dirty". Helping people is much more difficult than giving a business a tax break. Yet while conservatives cite the New Deal and Great Society programs as financial boondoggles that do nothing but subsidize laziness (usually among minority groups who, though they don't like to mention, usually have the highest hurdles to success), U.S. economic success since the time of the New Deal has been historic.

In addition to that, the metric by which modern countries are measured when it comes to success is not merely the GDP. Life-span, child mortality, access to health care, education levels and employment are all used to measure a country's health. In those categories as well the U.S. took-off following the New Deal.

A frequent example the conservatives cite in terms of business success is the post-WWII boom. The U.S. economy exploded following the war. Yet it was not primarily government efforts that propelled the success. Following the war, U.S. industries were some of the only left standing in the world. Europe and Japan were basically flattened and it would take years and enormous U.S. financial support to get them up and running again. In those years the U.S. economy was, naturally, able to dominate in every conceivable industry. This was not the result of genius planning by a pro-business politicians (though the Marshall Plan was), but the natural result of a combination of ideal factors; new and efficient factories, new technology an enormous workforce and an enormous global demand. Historians and economists have often mentioned that a period of time such as that is unlikely to be seen again.

The government has an interest in supporting business through its policies. It also has an interest in providing for the people in this country who work the jobs and buy the goods that keep the economy humming along. To ignore one at the expense of the other is bad for both.

Thursday, January 06, 2005

My favorite part of the memo comes right at the top
I don't need to tell you that this will be one of the most important conservative undertakings of modern times. If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate.

Let me tell you first what our plans are in terms of sequencing and political strategy. We will focus on Social Security immediately in this new year. Our strategy will probably include speeches early this month to establish an important premise: the current system is heading for an iceberg. The notion that younger workers will receive anything like the benefits they have been promised is fiction, unless significant reforms are undertaken. We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable course. That reality needs to be seared into the public consciousness; it is the pre-condition to authentic reform.

Whoever believes the Republican led effort is to reform and not eliminate should read this memo. This is the brass ring for the right wing; the largest, most popular and most effective government social program ever, it must be taken down.

There is no outstanding liability out there. There are taxes taken in every year to cover what is owed. There is actually more being brought in than is necessary so that a surplus can be established to boost the system for when the boomers start to retire. That sounds like effective planning by a governmental organization. It doesn't happen often and should be celebrated when it does.

SS works, it shouldn't be retired because of short-sighted ideology.
The complete text of the Wehner memo that has been circling. All formatting and emphasis from the original.
From: Wehner, Peter H.
Sent: Monday, January 03, 2005 2:57 PM
Subject: Some Thoughts on Social Security

I wanted to provide to you our latest thinking (not for attribution) on Social Security reform.

I don't need to tell you that this will be one of the most important conservative undertakings of modern times. If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever. The scope and scale of this endeavor are hard to overestimate.

Let me tell you first what our plans are in terms of sequencing and political strategy. We will focus on Social Security immediately in this new year. Our strategy will probably include speeches early this month to establish an important premise: the current system is heading for an iceberg. The notion that younger workers will receive anything like the benefits they have been promised is fiction, unless significant reforms are undertaken. We need to establish in the public mind a key fiscal fact: right now we are on an unsustainable course. That reality needs to be seared into the public consciousness; it is the pre-condition to authentic reform.

Given that, our aim is to introduce market reforms in Social Security and make the system permanently solvent and sustainable.

We intend to pursue the first goal by using our will and energy toward the creation of Personal Retirement Accounts. As you know, our advocacy for personal accounts is tied to our commitment to an Ownership Society -- one in which more people will own their health care plans and have the confidence of owning a piece of their retirement. Our goal is to provide a path to greater opportunity, more freedom, and more control for individuals over their own lives. That is what the personal account debate is fundamentally about -- and it is clearly the crucial new conservative idea in the history of the Social Security debate.

Second, we're going to take a very close look at changing the way benefits are calculated. As you probably know, under current law benefits are calculated by a "wage index" -- but because wages grow faster than inflation, so do Social Security benefits. If we don't address this aspect of the current system, we'll face serious economic risks.

It's worth noting that wage indexation was not part of the original design of Social Security. The current method of wage indexation was created in 1977, under (you guessed it) the Carter Administration. Wage indexation makes it impossible to "grow our way" out of the Social Security problem. If the economy grows faster and wages rise, this produces more tax revenue. But the faster wage growth also means that we owe more in Social Security benefits. This has produced a never-ending cycle of higher tax burdens, even during periods of robust economic growth. It is the classic case of the dog chasing his tail around the tree; he can run faster and faster, and never make any progress.

You may know that there is a small number of conservatives who prefer to push only for investment accounts and make no effort to adjust benefits -- therefore making no effort to address this fundamental structural problem. In my judgment, that's a bad idea. We simply cannot solve the Social Security problem with Personal Retirement Accounts alone. If the goal is permanent solvency and sustainability -- as we believe it should be --then Personal Retirements Accounts, for all their virtues, are insufficient to that task. And playing "kick the can" is simply not the credo of this President. He wants to do what needs to be done for genuine repair of Social Security.

If we duck our duty, it can have serious short-term economic consequences. Here's why. If we borrow $1-2 trillion to cover transition costs for personal savings accounts and make no changes to wage indexing, we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities. This could easily cause an economic chain-reaction: the markets go south, interest rates go up, and the economy stalls out. To ignore the structural fiscal issues -- to wholly ignore the matter of the current system's benefit formula -- would be irresponsible.

Here's a startling fact: under current law, an average retiree in 2050 would be scheduled to receive close to 40 percent more (in real terms) in benefits than an average retiree today -- and yet there are no mechanisms in place to produce the revenue to pay out those benefits. No one on this planet can tell you why a 25-year-old person today is entitled to a 40 percent increase in Social Security benefits (in real terms) compared to what a person retiring today receives.

To meet those benefit levels, one option would be to raise the age at which people receive benefits. If we followed the formula used when Social Security was first created -- make the age at which you receive Social Security benefits above the average age of mortality -- we'd be looking at raising the benefit age to around 80. That ain't gonna happen.

Another way to meet those benefit levels is through the traditional Democrat/liberal way: higher taxation. According to the latest report of the Social Security Trustees, the current system's benefit formula would require some $10 trillion in tax increases over the long term. We'd therefore need to raise the payroll tax almost 20 percent simply to provide wage-indexed benefit levels to those born this year.

This will all sound familiar. In the past, the way Congress usually addressed the built-in funding problem was by raising payroll taxes (from 2 percent in 1937 to 12.4 percent today). In fact, Congress has raised Social Security taxes more than 30 times -- but it has never addressed the underlying problem. Avoiding the core issue by raising taxes is not the modus operandi of this President.

The other key point, as you know, is that personal accounts, through the miracle of compound interest, will provide workers with higher retirement benefits than they are currently receiving from Social Security.

At the end of the day, we want to promote both an ownership society and advance the idea of limited government. It seems to me our plan will do so; the plan of some others won't.

Let me add one other important point: we consider our Social Security reform not simply an economic challenge, but a moral goal and a moral good. We have a responsibility to fulfill the promise of Social Security, not undermine it. And we have a duty to ensure that we do not create an inter-generational conflict -- which is precisely what will happen if the Social Security system is not reformed. We need to retain strong ties between the generations, which is of course a deeply conservative belief.

The debate about Social Security is going to be a monumental clash of ideas -- and it's important for the conservative movement that we win both the battle of ideas and the legislation that will give those ideas life. The Democrat Party leadership, the AARP, and many others will go after Social Security reform hammer and tongs. See today's silly New York Times editorial (its only one for the day) as one example. But Democrats and liberals are in a precarious position; they are attempting to block reform to a system that almost every serious-minded person concedes needs it. They are in a position of arguing against modernizing a system created almost four generations ago. Increasingly the Democrat Party is the party of obstruction and opposition. It is the Party of the Past.

For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country. We have it within our grasp to move away from dependency on government and toward giving greater power and responsibility to individuals.

There are of course other important issues dealing with Social Security; for now, though, I've covered quite enough ground. I wanted to let you know where things stand. If you have any questions, or if we can send you anything to clarify our plans and respond to critics, just let me know. The President remains flexible on tactics -- and rock-solid on the principles. But there's nothing new there.

In one of his last public acts of an extraordinary public life, the late Democratic Senator from New York, Daniel Patrick Moynihan, co-chaired the President's Commission to Strengthen Social Security. In the introduction of its report, Senator Moynihan (along with Richard Parsons, his co-chair) wrote, "the time to include personal accounts in such action [reforming Social Security] has, indeed, arrived. The details of such accounts are negotiable, but their need is clear.... Carpe diem!"

Tuesday, January 04, 2005

Bush administration to reduce Social Security benefits by up to one-third in coming years.

Today's Post-Dispatch ran an article from the Washington Post describing the Bush administration's decision to change the formula that determine how much a person receives from Social Security.

This is in addition to the diversion of funds into privatized accounts.

If Social Security is in such bad shape, and senior citizens already don't have enough to get by on, how is this supposed to help?
The change would save trillions of dollars in scheduled expenditures and solve Social Security's long-term deficit, but at a cost. According to the Social Security Administration's chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would fall by more than a quarter. A retiree in 2075 would receive 54 percent of the benefit now promised.

Sunday, January 02, 2005

Over at Talking Points Memo, Josh Marshall lays out the best explanation for what will happen when we reach the so-called "critical" date for social security, 2018.
A 'day of reckoning'?

Where to start? In addition to adopting rather dramatic language that reads like it comes right out of the privatization playbook, just what does 2018 represent?

The first thing worth noting is that there's nothing unexpected about this. Indeed, it is part of the plan under which Social Security's financing was restructured in the early 1980s. Payroll taxes were intentionally raised substantially over and above current needs so as to build a 'trust fund' that could be drawn down when the surge of baby-boomer retirements began early in the 21st century. In essence, babyboomers were asked to overpay into the system to create a reserve to cushion the stresses that would be created when their oversized generation retired.
Any rerporter assigned to cover the Social Security story should be required to do some homework on this subject. I don't know the whole story behind Social Security yet, and there are countless details that I will never fully know. Yet with even the little I do know I can tell that the administration's rhetoric is incorrect if not downright deceit. The media have not been much help in the matter in that they have done little research into whether the administration's claims are backed up by reality, or simply refer to administration "specialists" and members of pro-Social Security elimination groups.

A little investigation exposes a whole lot of rot. The AARP just became involved in the debate, so maybe that will force the administration to be a bit more truthfull in their assertions.

If the administration wishes to eliminate Social Security, fine, just be honest about it. Put it to the voters and let them decide. It is our money and our future. What they should not do is lie to the public about the situation. The system was designed to begin drawing down on the surplus in order to cover the extra burden of the retiring boomers. It was an excellent piece of foresight and should be lauded as why the system does work.

This along with several examples from Brad DeLong actually demonstrate that Social Security is a system that works the way it should, and within budget. Which is far more than can be said for many public policy projects.

Saturday, January 01, 2005

I think much of the conservative arguments about the liberal/federalist view of government is comes from a misunderstanding or self-interest. There are a thousand variations on the specific roles government should or shouldn't play, yet there is a basic misstatement coming from the right.

In general, the conservative argument is that the government has a set list of responsibilities that, constitutionally, it must execute and anything outside of that must be left to the local governments which have their own specific natures which reflect the communities they serve.

On its face, it is a simple and elegant design, two attributes which often indicate a correct argument. Many on the pro-government side of the argument attack the rationale from the angle that it simply reflects a more simple time that was incapable of conceiving of the problems of modern life. I don't think that is the case, and to often undercuts the actual issue.

The language as it stands is more than capable of handling modern matters. We may think that technology and science have brought us hurtling beyond previous times, but the general ideas of good governance and democracy are as old as mankind.

It would be foolish to try and rehash the federalist vs. anti-federalist arguments here. They should be read by anyone with an interest in the discussion, however.

Where I see the conservative argument falling short is its focus on restricting the language of the constitution. They focus on the responsibility only. I doubt there could be a convincing argument made by anyone that a government should support social and expansionist policies to the detriment of its responsiblities.

The argument from the liberal side is that once the responsiblities are taken care of, why not use the power of the government to help individuals.

This is not an argumant about the specific policies, simply the general idea.

On economist Brad DeLong's website he has several posts, posted in a row (start with January 1, 2005, and scroll down), that illustrate the difficulties faced by individuals. Places where technically the government has no directive to intervene, but where it may have a greater ability to help than any other institution or group.

The idea isn't that government has the responsiblity, but we do. We de have a responsibility to help each other. That being so, we should use the strengths and abilities of the federal government to help out just that little bit.

Most people want to do well, and do it themselves. But, as my father reminds me, we can't do it alone. Some things are larger than we are and we need just that extra bit of help to get through. As a democratic republic dedicated to allowing each individual achieve the acme of their potiential we have a responsibility to provide that little extra bit of help that people need and if the government is the best method, than we should use it.

(A prime example is the role of government tax credits with providing affordable health care. The Brad DeLong reports on a National Bureau of Economic Research working paper comparing government provided public insurance vs. using tax policies to encourage employers to provide insurance. The finding that really stands out the most
I find that every tax policy is much less efficient than public insurance expansions: while public insurance costs the government only between $1.17 and $1.33 per dollar of insurance value provided, tax policies cost the government between $2.36 and $12.98 per dollar of insurance value provided.
No if that isn't the penultimate example of what government is capable of providing, I don't know what is. Recent reports on Social Security efficiencyo point out that government program doesn't have to be synonomous with inneficient. Certainly there are countless examples of why government run programs do not work, but there are also countless examples of failed private ventures as well. %50 percent of resturaunts fail in the first year, should we be turning to private companies to provide meals at government institutions such as schools and the military?)