G.O.P. Divided as Bush Views Social Security

[papau]

http://www.nytimes.com/2005/01/06/politics/06social.html
G.O.P. Divided as Bush Views Social Security
By RICHARD W. STEVENSON

ASHINGTON, Jan. 5 - <snip>Two Republican camps are pitted against each other over how big the accounts should be and whether the president should embrace cuts in benefits.<snip>

<snip>
The main issues, they said, are whether Mr. Bush should back a proposal to reduce substantially the guaranteed government retirement benefit through a change in the way the benefit is calculated, and whether workers should be allowed to contribute all of their Social Security payroll taxes into their accounts or only a part.<snip>

One group of Republicans is pressing the administration to make the accounts as big as possible, preferably permitting the investment of all or nearly all of the 6.2 percent levy on wages that individuals contribute to Social Security. (Under all proposals, employers would continue to pay an additional 6.2 percent tax on each employee's wages up to a wage cap that this year is $90,000.)

Many of the same Republicans have also come out forcefully against a proposal to deal with Social Security's long-term financial problems by reducing the part of future retirement benefits that would come from the government.

Their approach is embodied in legislation introduced in Congress by Senator John E. Sununu, Republican of New Hampshire, and Representative Paul D. Ryan, Republican of Wisconsin. Their plan would allow investment of 6 percent of the wages subject to the payroll tax and would not mandate across-the-board reductions in scheduled benefits.<snip>

Some economists and business groups that support Mr. Bush on Social Security say financial markets are already jittery about the government's ability to rein in the budget and trade deficits and that more borrowing could lead to a faster fall in the value of the dollar, higher interest rates and slower economic growth.<snip>

[papau]

1. CongressDaily on WH aide Peter Wehner's Soc Sec secret memo

"Senate Republicans signaled their wariness yesterday in a private retreat on the year's legislative agenda with White House adviser Karl Rove. An attendee said the senators gave Mr. Rove 'a subtle but clearly identifiable message that the GOP would go along…but they were scared to death.' The senators indicated that the president 'had to step up his activity' to sell his initiative to Americans, which Mr. Rove said Mr. Bush would do. But the attendee said senators also warned the Social Security proposal 'needed to be bipartisan or else no go.'"

"Still, some Republicans are resigned to uniting behind the president, given his determination. 'The president is going to go ahead,' said Rep. Tom Cole of Oklahoma, a Republican leadership lieutenant. 'He cannot afford to fail. It would have repercussions for the rest of his program, including foreign policy. We can't hand the president a defeat on his major domestic initiative at a time of war.'"

[shoelace414]

2. it would be so much easier if we had a King

[Cocoa]

3. deceptive article from Richard Stevenson

he frames the debate as if private accounts are inevitable, and as if the debate was over how large the accounts are going to be.

This article does not hint, that I could see, at the fact that some people oppose ANY private accounts, and that private accounts are a radical and controversial proposal.

He also portrays private accounts as somehow an alternative to reduced benefits, which doesn't really make sense. The way Stevenson and the Republicans are portraying things, private accounts are just free money with nothing but an upside, no cost, only benefits. Thus, anyone who opposes them is just insane.

[papau]

4. If we just plan to borrow and not pay interest except with more borrowing

there is only upside

until the crash

I wonder if Wall Street cares?