First, this brings Social Security's promises close to what Social Security can afford to pay. Second, this focuses benefits on people who need it the most, the ones who are least likely to have other types of retirement plans." says an analyst at the Heritage Foundation, David John (Lambro, 2005).
It is believed that people making about $110,000 or more would have benefits based on price increases which in turn tend to rise more slowly than wages while benefits of people making $25-000 or less would continue to be calculated on wage growth. Mr. Michael Tanner, Director of the Cato's Social Security privatization project, is a little apprehensive is however all the more optimistic:
like it. Something has to be done to restrain the growth of benefits. Personal accounts help solvency, but they don't solve the entire problem. This seems to be the best of a lot of tough choices."
It is believed that the program would be expected to be financially solvent for the foreseeable future. Conservatives are of opinion that this proposal could appeal lawmakers to look for a way to keep the system solvent for long-term without adding much debt.
Bush seems to be very determined and ready to pay whatever price attaches to the proposal. According to several sources, Bush insisted on handling Social Security in a tough, no-nonsense way.
The proposal has attracted grave criticism from opponents of personal accounts. What the proposal did not include was how to keep the Social Security solvent and sustainable in the long-term in case of the absence of personal accounts. This is followed by another debate on part of account opponents to discuss what the public and policy makers want.
The republicans are genuinely vulnerable on the tax cut and n the Social Security; conservative democrats on one hand have set off an odd collision, by aiming to wipe out the democrat's legacy as the part of "tax and spend." This is because the Democrats signature programs are null and void if 'tax and spend' is taken out of the picture. Social security raises trillions of dollars from payroll taxes in order to spend it on secure retirements. Similarly Medicare and Public education are tax and spend too. Bush's opponents believe that as a party one must not make issues of defense, social security and as their central foci for mere political maneuvering. The two implications with Bush National security is how to keep social security solvent and secondly how to think about budget politics in the short-term. The former has been squarely ignored by the Bush administration.
Robert Dreyfuss writes in the American Prospect in June 2001 that the plan would have to include painful choices about how to pay for the plan and including swallowing up $1 trillion or more of the projected surplus to cut benefits for the future retirees voluntarily. Many analysts point out that diverting 2% of the social security tax to pocket private accounts is rather a start down to a slippery slope that will turn the system into a two-tiered affair wherein wealthy tax payers opt for private accounts to add-on to savings and private pensions, while poor and working class taxpayers stuck with a social security system that pays reduced benefits. "I think it's unlikely you'll see the Full Monty," says Michael Tanner of Cato. "But it could go beyond 2%." Moreover, Thomas R. Saving of Texas A&M University has on record pronounced the Social Security "an illegal pyramid scheme," saying that: "We must destroy Social Security, as we know it, in order to save it."
Also the Clinton administration, while opposing the creation of personal accounts has also disapproved of Mr. Bush's plan, declaring it too sketchy and viable of pushing the program towards insolvency. (Dreyfuss, 2001).
Some analysts point out that months earlier than the issuance of aerial bombardment in Baghdad (March 19, 2003), Bush Government launched the National Security Strategy of United States of America on September 17, 2002 announcing substantive shift in America previous policy. Unclassified versions of National Strategy to Combat Weapons of Mass destruction had been released on December 11, 2002. Both these were subject to grave criticism controversy because of its obvious connection with war against Iraq. (Himes, 2004)
In light of scholarly opinions I believe that the President Bush's Social Security campaign is a well placed bold step in order to please the dejected low wager Americans but it fails to hide the short-term delight and subsequent fears of insolvency.
SECTION III: FINDINGS
According to the White House official website, President Bush has been successful at accomplishing the social security for future generations that had been left in a deplorable condition previously. The President has wisely judged the importance of the matter and acted in a timely manner. Also he has promised the senior citizens born before 1950 that no changes would be made in their Social Security System. According to the White House, Bush's Social Security System is a one of the greatest moral successes (website) of the 20th century as it provided a critical foundation of income for the retired and disabled thus providing security to one third of the Americans over the age of 65 by constituting social security benefits to ninety percent of their total income. Present Social security system is declared to be sound for senior workers as well as those nearing retirement i.e. The baby boomers that will begin to retire by 2008. In future people as people are expected to live longer, benefits are scheduled to increase accordingly. By the time today's youngest workers turn 65, there would only be 2 workers supporting one beneficiary. But under the current Bush system, 30-year-old worker will face 37% benefit cut when he or she reaches normal retirement age. It is believed that if steps are not taken to curb the Social Security problem now the only solutions will be hiking taxes, massive borrowing or sudden cuts in the benefits or other unpleasant government programs. Bush is working in just the right direction and has pledged to work with the Congress in exploring just the right combination of reforms for the Social Welfare. However, The Bush government acknowledges the difficulty of the task and believes that it needs ample time, mind set and collaborative understanding and efforts. He believes if we employ courage and honesty to the task we will be successful; we should hold our children's retirement security dearer to partisan politics. These claims aim to nullify the partisan approaches and provide all the think tanks and organization with an opportunity to perceive the System as a selfless and courageous plan for the future of America. However it hasn't failed to invite criticism in different parties. Its political arduousness and insolvency still show beneath the inviting statements and claims of the White House. The research has been fairly based on the deliberations listed by the White House official.
In order to make it sustainable and unanimously acceptable, the matter of tax and spend should be revised as democrats and conservative democrats solely rely on tan and spend (Kuttner, 2001)
The research concludes that Bush has taken a form and bold step never trodden before for the exploration of a surer solution to the problem of Social Security. However, it has invited its due share of victimization as there are some facilitators and scenarios enabling Bush to take these steps allowing him to garner support from the American people.
Michael D. Tanner, "Chapter 12: Perspectives on the President's Commission to Strengthen Social Security," Social Security and Its Discontents: Perspectives on choice, Washington D. C: Cato Institute, 2004, pg 1, 201-204.
Kate O'Beirne, June 5, 2000, A Politician steps up: Why Bush decided to do it, NATIONAL REVIEW, vol: 52, issue: 10.
Bill Sammon, January 27, 2005, Bush focusing on Social Security; Case for reform to go on Road, The Washington Times, pg: A04.
Donald Lambro, May 2, 2000, Bush wins support on social security, The Washington Times, pg: 1.
May 3, 2005, Groups back Tiered-Benefits Plan; Bush Proposal 'On Track,' Say Cato, Heritage, The Washington Times, pg: A06.…