Mound City

Josh Marshall over at Talking Points Memo sums up the President's Social Security priority far more concisely than I have:

As Paul Krugman, Kevin Drum and many others have been making clear in recent days, the entirety of the president's argument is based on a series of well-constructed lies. The president's advisors were never more truthful than they were when they compared the coming round of disinformation and fear-mongering to their public campaign in support of the Iraq war in 2002.

The Social Security "crisis" is manufactured; there is no crisis. To the extent there are long-term financing problems, the president's plan will gravely worsen them. The problem we face isn't over Social Security, which continues to run up huge surpluses (just as it was intended to under the early-80s reform), but that our non-Social Security budget continues to run massive structural deficits. Or rather, it has returned to running massive structural deficits after getting into the black in the late 1990s through the combined exertions of a Democratic president and a Republican congress. Social Security isn't the problem, but rather George W. Bush's reckless fiscal policy.

What also should be noted is Josh's reference to the 80's reform. The essence of that reform (as I understand it, I could be wrong) is that the payroll taxes would be increased and the surplus funds would be used to buy bonds. Then in 2015 or so, as payroll tax income falls below the payout level, the bonds would be cashed in to support payouts and income tax would be bumped up to ensure the bonds could be covered. The idea is that the working-class would take a heavier burden for new, and it would then switch to the wealthier among us.

There are several issues surrounding this "reform" push: 1. GOP desire to kill Social Security, 2. Refocus attention away from the administration's fiscal policy, 3. Ensure that if the system must remain, that changes will be made on their terms.

Any and all of these are issues that have to be considered when considering administration plans for social security. As Josh points out, the truly pressing economic issues facing this country revolve around Medicare, a weak dollar and an enormous and mounting debt.