Prometheus 6

"D'oh!" of note:

Greenspan warned that establishing the investment accounts could have a major effect on interest rates. He did not say what that effect might be, but other economists have said that new borrowing by the government as part of creating the accounts might have the effect of driving up interest rates.

If Bush changed his position that is, indeed, headline news. Too bad he still hasn't changed to the right position. His priorities are still screwed.

We know for a fact that privatizing Social Security in and of itself does nothing to balance its books. Yet that is still the central goal in Bush's plans. And it is, shall we say, less than clear balancing Social Security is the goal...or that his position has changed more than rhetorically.

On Wednesday, Bush spokesman Trent Duffy made no attempt to clarify Bush's remarks to the regional reporters that all options but a tax rate increase were under consideration, saying the president did not necessarily contradict himself.

"Just because options are on the table doesn't mean he's endorsed anything," Duffy said. "This is just a good sign of the president's willingness to be flexible and open to ideas."

In fact, Grover "date rape" Norquist thinks Bush is lying.

Grover Norquist, a leading anti-tax activist and advisor to the White House on Social Security, said he did not believe that Bush would agree to raising the $90,000 cap, despite the apparent shift in his public negotiating position. But he acknowledged that the president's remarks would rattle some conservatives.

"Should it make us nervous when somebody says, 'I would think about cutting off your fingers,' even if you don't think he really would? Yes. It makes one nervous," Norquist said. "I understand that it's his job to say, 'Let's come to the table and have a conversation.' He's counting on the fact that once you get in the room, the American people will demand personal savings accounts, and they will not demand higher taxes."

(By the way, I know Dick Armey was the one who coined the phrase. That's kind of beside the point though, isn't it?)

If fixing Social Security forever is really the goal, then anything that doesn't approach that goal should be taken off the table. The goal is difficult enough; why add issues over which there is severe disagreement and which do not help achieve that goal?

Anyway...

Bush Shifts Pension Stance
He says he is open to a higher Social Security tax cap to fund his plan for private accounts. Greenspan endorses a cautious approach.
By Peter Wallsten and Joel Havemann
Times Staff Writers

February 17, 2005

PORTSMOUTH, N.H.   In an important shift from his hard-line stance against tax increases, President Bush has said he is open to raising taxes on wealthier Americans to cover the costs of transforming Social Security.

Bush has been promoting a plan to let workers under age 55 divert a portion of their Social Security payroll taxes into private investment accounts. But he has not settled on how to replace that diverted money ænbsp; an estimated $1 trillion or more over a decade that would be needed to pay benefits to current retirees.

The president, in an interview published Wednesday in several regional newspapers, left the door open to the idea of raising the cap on wages subject to the Social Security tax as a way to help cover the transition costs of private accounts. Earnings above $90,000 are not subject to tax now.

"I've been asked this question a lot, and my answer is that I'm interested in good ideas," Bush said, according to the Birmingham (Ala.) News. "The one thing I'm not open-minded about is raising the payroll tax rate, and all the other issues are on the table, and that's important for people to know."

He was drawing a distinction between the amount of earnings subject to the Social Security tax and the 12.4% tax rate, paid half by workers and half by employers, which he is opposed to raising.