Social Security politics is splintering the GOP. How can Dems keep the

pressure on the Republicans, and help intensify emerging dissension within Republican ranks?

For now, Reid and Pelosi have implemented a brilliant strategy of not taking the "bait". Democrats are refusing to discuss Social Security until privatization is off the table for good. This strategy of silence is revealing important stress points in the Republican coalition, points which are discussed below.

What do you think of this way of looking at Social Security politics? When should Democrats abandon the strategy of silence on Social Security? What do you think Democrats can do to keep helping the Republican Party fracture itself over this issue?

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The curiouser and curiouser WH campaign to "reform" Social Security has exposed points of extreme stress in the Republican coalition. Cracks at these stress points already are visible, if you look closely enough. The Republican Party has started to splinter itself over Social Security politics (see post #1 below). Democrats who want to end the abomination of the Bush regime could help the process along by continuing to apply leverage at two main stress points where Republicans are ripe to break off into three major Social Security factions.

The three major factions are:

(1) A White House that has overreached and is pulling back from private accounts;

(2) A greedy Wall Street wing that is salivating over the prospect of trillions of FICA dollars hyperinflating stock prices; and

(3) A true-believer far-right extremist wing that fears "Pension Fund Socialism" most of all.

The two main stress points are:

(a) commitment to "carve-out" privatized Social Socurity accounts; and

(b) insistence on conversion of Social Security from a "defined benefit" social retirement insurance plan to a "defined contribution" privatized forced savings plan.

To keep this lead post from getting too long, and to help organize separate discussions of distinct issues, I'm adding two replies myself, to deal with each of the main stress points.

DUer quaoar found a HEARTWARMING ATTACK on the White House from the right at http://www.newsday.com/news/opinion/ny-opmoo214185111mar21,0,6665061.story?coll=ny=viewpoints-headlines

"The campaign to allow workers to invest part of their payroll tax contributions in real private assets through personal retirement accounts has been hijacked. It has morphed from a debate about personal ownership and control for young workers into a tax-increasing, benefit-cutting, retirement-age-raising monster, devouring the very idea of an ownership society. The Republican theme should be better benefits for our kids and grandkids. Instead, they are now promoting a "PAY MORE, WORK LONGER, GET LESS" message. That's not the sound bite many Republicans should want to carry on their backs into the midterm elections." (See also http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x1682061 .)

This is a remarakable op-ed. It comes from extreme right-winger Stephen Moore, formerly of the Cato Institute. It exposes a HUGE crack in the Republican coalition over Social Security privatization. The WH itself now has fallen into a trap Rove set for Dems: "Pay more, work longer, get less" is how Rethugs would have labeled any Democratic plan to "solve" POSSIBLE Social Security "problems" at least four decades away. Wisely, Reid and Pelosi refused to fall into the trap, sitting on their hands until Dubya agrees to keep private accounts off the table.

Now Dubya is so desperate to avoid a major political defeat that he has fallen into his own trap, and caused a falling-out with the far-right of the Wall Street wing of his party, whose spokesman is Stephen Moore. Dubya now would sign almost ANY bill that vaguely has to do with Social Security, just so he can declare victory and move on to some other flim-flam.

But Stephen Moore and company couldn't care less whether Dubya gets a Social Security "victory". Their main objectives are

(1) siphoning payroll taxes from the poor and middle class into Wall Street and

(2) thereby destroying the Social Security safety net.

They believe, despite plenty of contrary evidence, that

(A) Social Security depresses private saving, and that

(B) without private accounts Social Security will turn into a politicized Pension Fund Socialism that will depress national savings.

Democrats have an opportunity here to exacerbate a key ideological difference between (1) the far right (the White House) and (3) the ultra-ideological extreme right (Moore, Greenspan, etc.). But they must be extremely careful not to just give Dubya yet another "victory", as Jacob Weisberg pointed out in a recent column at http://slate.msn.com/id/2115141 .

in a classic attempt to peel away layers of the current Republican coalition over the specific issue of privatization:

From http://www.chron.com/cs/CDA/ssistory.mpl/politics/3103789 :

"March 26, 2005, 12:55PM

Text of Rep. Sandy Levin's Democratic response

(snip)

The president has asked Congress and the American people to support diverting trillions of dollars from Social Security to private accounts. This would have dire consequences including major borrowing and massive benefit cuts. It would mean the dismantling of Social Security as we know it.

(snip)

We're holding hundreds of town hall meetings, open to the public, giving everyone an opportunity to be heard. I have found the more people hear the facts about the president's privatization proposals, the less they like them. I've heard from current retirees that for them, Social Security has meant independence, an ability to live their retirement on their own as they see fit. They've worked hard, paid into the system and earned a secure guaranteed retirement. They want the same for their children and grandchildren.

I've heard from those near retirement, real doubts that diverting nearly $5 trillion over 20 years would not impact their Social Security. I've also heard from younger workers who have the most to lose in Social Security privatization. For them, the president's private accounts would be a shell game. At retirement, they would have to pay the government back the full cost of the money diverted to their account, plus inflation and 3 percent interest. In addition, the accounts would be government-managed and many would have to convert to annuity with nothing to pass on to their heirs. (Hearing those details, one guy yelled out, "Why bother!")

Privatization comes at a very high cost. It makes Social Security's future financial challenges worse not better. It saddles future generations with massive debt and requires major benefit cuts for everyone even for those who do not choose a private account. For younger workers, this benefit cut would mean a loss of $152,000 over their lifetime."

the case of far-right economist Martin Feldstein, an important adviser to the Reagan administration. Twenty-five years ago, he submitted empirical work purporting to show that Social Security depressed national saving. When other researchers could not reporduce his results, he famously blamed 'computer error'. This incident earned him an unflattering NY Times article, which has become part of a "Bibliography on Scientific Fraud" at http://www.albany.edu/~scifraud/biblio/A.htm :

Arenson, K. W. "Martin Feldstein's computer error." The New York Times 1980 (5 October): F19.

More than twenty-four years later, Feldstein STILL numbers among the most rabid advocates of privatization. See http://www.washingtonpost.com/wp-dyn/articles/A8000-2005Mar28.html .

Extreme right-wing ideologues, such as Alan Greenspan and Stephen Moore, fear that centralized management of Social Security investment in stocks would lead to trillions of dollars in "ECONOMICALLY TARGETED INVESTMENTS" ("ETIs") that would depress national savings and foster "socialism". Thus they insist that any investment of FICA revenues in stocks must be accompanied by a complete transformation of Social Security to an IRA-like privatized savings plan. But for everyone who's not a right-wing extremist, privatization and investment of some FICA revenues in stocks are two separate issues.

If privatized accounts were taken off the table, and the current "defined benefit" Social Security system were maintained, Wall Street still could benefit greatly from centralized investment of a portion of FICA revenues in stocks and other publicly-traded financial assets. If only 15 percent of FICA were invested in stocks by a centralized Social Security investment board, trillions of dollars in extra principal eventually would go into pumping up share prices. With centralized investment, Wall Street brokers would not get the huge government subsidy of recurring commissions on transactions for tens of millions of privatized accounts. But general expansion of the stock market is always good for everyone on Wall Street.

Centralized Social Security investment in stocks, much the way state pension plans have operated for decades in California, Wisconsin, and other states, was exactly what Bill Clinton proposed seven years ago (see 'Clinton's call to invest Soc Sec Trust assets in Equities' at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=227x537 ).

But, led by Alan Greenspan, extreme-right-wing ideologues dug in their heels for privatized accounts. For them, any pre-funding of Social Security retirement payments MUST take place in privatized accounts.

In future discussions of Social Security, once privatization is taken off the table, Democrats could exploit this important difference between right-wing ideologues like Greenspan and Wall Streeters motivated only by dollar signs.

For more on economically targeted investments, see www.vermonttreasurer.gov/documents/misc/econTargetInvestReport20040216.pdf for an excellent objective summary, and http://www.cato.org/pubs/pas/pa-236.html for a right-wing-extremist view.

:-)

to renege on Trust Fund bonds, the US must raise trillions to pay back Baby Boomers for all the extra payroll taxes Greenspan saw to it they had to pay, starting in the 80s. Why shouldn't the Trust Fund diversify into stocks and other publicly-traded assets? Had Greenspan not been put in charge of the last "Social Security reform" by Reagan, in all likelihood the Trust Fund already would have a lot more in it than just IOUs. The only alternatives currently available for paying back Boomers are higher payroll taxes, higher income taxes, rolling over Trust Fund debt into public debt, retirement benefit cuts, and inflation.

IMO Democrats need to see to it that Greenspan's successor does not share his extremist views againsr defined benefit Social Security. If there's anything positive about Bush's Social Security road show, it may serve to take privatized accounts off the table for many years, and open the path to revival of Clinton's Social Security ideas.

Do you have any ideas on how Democrats can advocate centralized investment of a portion of FICA in stocks, with minimum danger that Wall Street will try to bring back privatization and the Golden Goose of brokers' commissions?

Segli and Fegli allowed "industries" (the life ins companies) to share the wealth in a massive government life insurance of federal employees and servicemen. I do not see that a hugh index fund's commissions could not be likewised shared out to the industry.

>>How can Dems keep the pressure on the Republicans, and help intensify emerging dissension within Republican ranks?<<

The way to keep pressure on the Republicans is to PUT some pressure on the Republicans -- which the Dems have yet to do. And it has been that way for over a decade, at least.

Thus far, the only pressure put on Republicans has come from the facts themselves. As usual, the GOP ass-covering MSM has continued to try to cover for them as best they can by muddying the waters instead of clearing them. But the facts are just too clear to most people, even red-staters. The pressure is coming from the polls, not the pols. Excepting John Lewis and Jim Moran, most Dems have been too wimpy to stick out their necks on this (or any other) issue.

How can we get rid of these quisling 'Democrats'?

What ARE they saying, and which layers of the Republican coalition do you think they're trying to peel off? Seniors? Working people who've been voting Repug on bogus "social issues"?

...and cut out the pissy language. The original poster raises some legitimate points, and so do you - when they're not clouded by decidedly un-Progressive spite.

NGU.

That democrats should act like democrats and speak up. They should make noise, couching the conflict in terms of the fat cats (again) trying to screw the little guy. They should make a point of lionizing FDR and the New Deal. The Pugs hate both, of course, but the people who were alive then, or were born soon enough after) KNOW that it was the Dems who saved their bacon back then when the Pubs would have been happy with a Soylent Green solution.

The Democrats ought to be responding with outrage about SS -- "how DARE these rich pigs try to rob you of your future?" They ought to be hammering home how easy it would be to fix SS by merely raising the taxable amount from the current ceiling of $90,000; they ought to point out and shout out that the Repubpigs don't want THAT simple painless solution simply because it would mean the rich wouldn't be getting richer quite as fast.

I admit that things have (accidentally) gone our way on this issue. Good, I'm glad. And perhaps those with more faith in our Democratic leadership might believe that staying out of the fray was a conscious decision on the part of Reed and Pelosi. Me, I'm not so sure. It looks to me as if the Dem leadership did exactly the same thing on this issue that they have done -- for decades -- on just about every other important issue, which is nuthin.

I don't want to keep carping about Democratic politicans and leaders. I wish I didn't feel the need to. But I've watched for years and years while they just laid there and took it. They were wrong then and -- if they don't take on the Pugnants face-to-face and nose-to-nose on every important issue (until further notice)-- they're wrong now

will suffice to save SS. Remember Gore's 'lock box'!

"There you go again! Pay more? Work longer? Get less? Is that all you Democrats have to offer on Social Security?

Voters: Call your Representative and Senator and tell them to support President Bush's plan to save Social Security, NOW!"

Your proposal makes eminent common sense, but how can it be made to work in the irrational political climate that has given us a second term of Bush? And, in particular, which powerful Republican constituencies would be peeled away by such an appeal for fiscal responsibility?

We ought to be able to fund SS AND get ourselves a substantial boost out of debt if they would agree that there is no reason they should be receiving $700,000 a year until the day they die and another $200,000 a year every year until their spouses die! Do you realize how much money that is? There is something SERIOUSLY wrong with America if they think this is an appropriate amount of money for retirement. Most of these people already have an infinite supply of money anyway! Do you think Kerry, Kennedy, and some of the others really need $700,000 dollars a year for retirement?

Retirement should be based on economic needs for a comfortable retirement, not an exorbitant and greedy retirement!

BTW, I am not singling out Kerry and Kennedy specifically. They were just the first two wealthy Senators to cross my mind! There are just as many wealthy Republican Senators!

...for the Dems to stake out. And adding Congressional pensions to our list of demands moves the bar a little higher - which moves the mid-ground a little higher too, and makes it easier to achieve.

Awesome strategic thinking.

NGU.

The Bush tax cuts are miniscule. Let's really put our nation on the right track by proposing a serious cut in the payroll tax rate and the personal income tax rates. I would like to see a flat income tax rate. I would also like to see the corporate income tax eliminated. That would lower the cost of doing business incountry and undercut offshoring. With a Republican in the White House proposing to increase the federal bureaucracy, budget and debt, Democrats should be taking the opposite side and defending the average American worker.

Tactically, the Democrats will do better if they're seen as presenting a constructive proposal of their own, so they're not subject to the charge of obstructionism.

The cap on earnings subject to the FICA tax makes that tax a regressive one. The FICA tax on the average worker's salary is a higher percentage than the tax on Bush's salary, which in turn is a higher percentage than what's assessed on the earnings of some corporate CEO who's getting paid a few million a year. That's an unfairness that can be pitched to quite a few voters.

Moreover, this change has the advantage that, unlike Bush's privatization plan, it actually addresses the system's financial issues. Bush's own commission said that removing the cap would eliminate 88 percent of the projected deficit.

is another potential main point of stress in the Republican coalition. Thank you for bringing it in--how could I have forgotten to mention it?

The groups that could be peeled away from Bush's Republican coalition on SS regressivity are the middle class and, especially, the tens of millions of very-low-paid hourly wage workers who've been voting Rethuglican on "God, gays, and guns".

Do you know whether any organizations that support Republicans on "social" issues already have written op-eds that have raised the issue of SS regressivity?

But I see two potential problems with your strategy as you've stated it, both of which seem solvable to me, though I don't know the exact details.

(1) Eliminating or substantially raising the payroll tax cap would open Democrats up to the line of attack outlined in post #6: "Pay more? Is that all you Dems have to offer?"

(2) If you completely eliminate the cap on payroll taxation, would you also completely eliminate the cap on retirement benefits? Since the 1930s, there already have been MANY incremental increases in the cap on payroll taxation. How have these increases in the payroll cap tracked with increases in the maximum benefit in the past, and how could you justify a substantial change in that relationship?

Problem (1) could be solved by combining an elimination of or substantial increase in the payroll tax cap with a modest PAYROLL TAX RATE CUT for all workers. Do you know if anyone has crunched numbers on this idea already? I really like the idea of GOING ON THE ATTACK against wealthy Republicans, and peeling away millions of misguided poor and middle class people who voted for Bush. Such a strategy might also help turn out the half of all potential voters who have not been voting at all--they are heavily concentrated in the lower income brackets.

I don't personally know of any "God, gays, and guns" types (individuals or organizations) that are oriented toward lower-income groups and might therefore be responsive to the regressivity issue. There could well be some out there, though; I just don't hang with that crowd. (Yeah, I know, typical liberal elitism.)

As to the specific concerns you raise:

(1) Yes, raising or eliminating the cap could be painted as "pay more". On the other hand, it doesn't involve a change in the tax rate; it says only that the existing tax rate, the 12.4% rate paid on the average American worker's wages (approximately $40,000 per year) and by anyone else earning less than $90,000, should also apply to the fortunate few earning more than $90,000. "All employees pay their fair share" and "close the loophole" would have a lot of power as counters to the Republican spin.

Incidentally, even the Bush administration has left this door at least partly open. Bush said that everything is on the table except tax increases. When Scott McClellan was pressed for particulars, though, he did not unambiguously characterize raising or eliminating the cap as a tax increase that Bush would oppose. <http://www.whitehouse.gov/news/releases/2005/02/20050210-6.html#3a>

(2) Bush's commission gave two figures about eliminating the cap. If you retain the current limit on benefits, this plan completely eliminates the system's projected shortfall. If instead you allow benefits to rise along with the taxes newly collected, thus maintaining the link between lifetime FICA payments and retirement benefit levels, then the plan eliminates 88% of the shortfall, which is still very good. (This alternative is open to criticism in that it also entails cutting monthly benefit checks in the six figures for retired corporate plutocrats. Nevertheless, there would be political advantages to saying that everyone's treated fairly, paying in the 12.4% and receiving corresponding benefits when they retire. The plutocrats pay in more while they're working but receive more as retirees.)

If the plutocrats would pay much higher effective taxes than under current law, but would also receive much higher benefits, how would the system's overall solvency improve? The somewhat sneaky answer is that those $100,000 monthly benefit checks would be disproportionately subject to federal income tax, and the revenue from taxes on Social Security benefits goes into the Trust Fund. I'm not sure of the numbers, but I think this is a big factor in getting to that 88% solution.

You're right about the history since the 1930s. One point that's different now, though, is precisely the income tax issue. For most of Social Security's history, benefits weren't subject to federal income tax. Now, however, we have taxability of some Social Security benefits for upper-income retirees. That's why we can call for eliminating the cap on the income that's subject to FICA; in the interest of fairness, we can couple that change with eliminating the cap on retirement benefits; and yet we can boost the Trust Fund enormously. The remaining 12% of the shortfall would be comparatively easy to address. I think the idea makes both economic and political sense, a welcome combination.

revenues, according to a 2004 CRS study on Senator Leahy's website, at http://leahy.senate.gov/issues/socialsecurity/earningsbase12004.pdf .

According to the same source, six percent of earnings exceeded the 2004 taxable Social Security earnings cap of $87,900, and Clinton was the one who uncapped the Medicare earnings base, in 1994.

But, if the extra $100 billion were simply added to the current positive SS cash flow, with no establishment of a real diversified Trust Fund of publicly-traded assets, wouldn't the current Social Security "Trust Fund" scam simply be continued for a few extra years past 2018? By itself, without legislation to authorize centralized investment of FICA revenues in index funds, your proposal might merely generate an extra couple of trillion dollars for financing future Republican spending sprees, just like Reagan's and Dubya's.

IMO, sound economics as well as sound politics would favor devoting ALL additional revenues collected by any increase in the FICA earnings base to reducing the payroll tax rate, below the current level of 12.4 percent. This would be a GREAT Democratic proposal for a PEOPLE'S TAX CUT that would be very popular among everyone but the 6 percent whose payroll taxes would rise to offset it. I would also advocate imposing a cap on BENEFITS of, say, $10,000 a month in 2005 dollars, so that eliminating the earnings base cap does not worsen negative system cash flow too much in the out years.

Thanks for the Leahy link!

2018 (or 2017 in the latest report) is not an important date. The important date is the date of Trust Fund depletion. Last year's estimate by the Trustees was 2042; they've now moved to 2041; the CBO continues to be significantly more optimistic. Regardless of the exact date, there is an issue of tweaking Social Security so that it can continue to be a social insurance program funded by a dedicated tax, rather than becoming a net drain on general revenues.

From that point of view, I'm not at all reluctant to acknowledge that my proposal, as you say, merely pushes the problem date further into the future. It's by doing enough of that kind of pushing, through various reforms, that we solve the problem, by getting past the baby boomer hump and attaining a system that's stable indefinitely. (Stable, that is, unless you also consider that tiny little detail of the much more imminent and much more severe Medicare crisis, but let's look only at OASDI for the moment.)

In 2004, the Trust Fund added about $150 billion. If that money (current receipts not needed for current expenditures) had been invested in stock market index funds and/or corporate bonds, then the federal government would have had to go out into the bond market and sell an additional $150 billion worth of T-bills and T-notes to finance its deficit. What that amounts to is that the government is borrowing money to invest in the stock market. I don't think that's a good idea overall.

The advantage that's argued for it, by you and others, refers to the time, in 2018 or whenever, when current-year FICA tax receipts fall below current-year Social Security expenses. At that point, under current law, the Social Security Administration turns to the Secretary of the Treasury and says, "Pay up." In other words, the SSA begins redeeming some of the U.S. government securities that have been accumulating in the Trust Fund, and thus keeps paying the full benefits provided by the law.

Ah, but what if the Treasury doesn't pay up? Because of this possibility, you'd feel better if, instead, the SSA could simply call its broker and say, "Sell $20 billion worth of our S&P index fund." To this, two responses. First, although I agree that the second situation is more secure than the first, the first is still pretty secure. The government is not going to default on those securities. Aside from the general problems of any default, the government will face the political difficulty of cutting Social Security benefits, which is what would happen if the bonds weren't honored. Even if you have no confidence in government officials' honesty and integrity (and, alas, why would you), you can probably count on them to want to save their political hides. Their self-preservation instinct would be bolstered by the moral claim of a surplus that's been deliberately accumulated over several decades since 1983 to address precisely this situation (baby boomer retirement).

Second, even if it might have been better to do it your way from the start, the fact is that we didn't. Right now the Trust Fund is holding $1.7 trillion (yes, trillion with a T) in government securities. If we now start investing yearly surpluses in index funds, it would weaken, not strengthen, the Trust Fund. The portion of it that's in publicly traded assets would be seen as "real", and the rest of it (the $1.7 trillion) would, by comparison, look much more like the mere "bookkeeping device" that the dismantle-Social-Security crowd wants everyone to think it is. So, I just don't think we can put the toothpaste back in the tube on that one. Reagan, Bush, Clinton, and Bush have all participated in the process of using current-year surpluses in Social Security to offset current-year deficits in the rest of the government, with the solemn promise that the obligations so created will be honored when the time comes.

As to the PEOPLES TAX CUT: Yes, it would be popular, but it would be unsustainable. Eliminating the earnings cap and keeping the current tax rate is, by itself, probably insufficient to guarantee the system's solvency, without at least some change in the benefits formula. Any tax cut would be reflected dollar-for-dollar in greater benefits cuts.

Finally, capping the benefits makes some economic sense but might be politically disadvantageous. It breaks the link between taxes you paid in and benefits you get back out. I would prefer to increase the extent to which high-income retirees pay personal income taxes on Social Security benefits, with the increased tax receipts from that source being dedicated to the Trust Fund. That would have the same effect that you seek, namely not worsening negative system cash flow, and I think it would be politically easier to sell.

I could quibble with several things you said in your long post, but instead I want to emphasize yet another political stress point you've just introduced. Democrats have a huge opportunity to split off big chunks of currently-Republican Wall Street, corporate America, Baby Boomers, and economically literate younger people by exploiting the intricate links between Social Security and America's economic future.

As you pointed out, the Social Security Trust fund consists of solemn obligations on the full faith and credit of the US Treasury. 2018 is only the date at which the Social Security cash flow is expected to turn negative, with FICA receipts that year expected to fall below benefit payments currently promised to Baby Boomers. The negative cash flow that begins in 2018 is fully covered by Trust Fund bonds until sometime between 2041 and 75 years from now, depending on assumptions about the future path of economic parameters. Social Security CANNOT go broke unless the US Treasury goes into default FIRST!

By means of a 25 percent increase in FICA payroll tax rates between 1980 and 1990, trillions of working people's dollars already have been "loaned" to the US Treasury for the specific purpose of financing retirement pay during the Baby Boom demographic bulge. The only way there could be a Social Security "crisis" for DECADES is if elements of the US government are planning to default on Trust Fund bonds.

Think of the possibilities this situation offers for Democratic political attack ads directed at specific stakeholders in Social Security and in the economy:

Baby Boomers: "They say there's a crisis in Social Security? What happened to the TRILLIONS of dollars that were taken out of your hard-earned paychecks for the Trust Fund? You have FULLY FUNDED your own retirements, in advance. Support Democrats. We invented Social Security, and we plan to honor all its promises"

Wall Street and corporations: "Are Republican politicians plotting to destroy the risklessness of Treasury obligations? It's true that Trust Fund bonds are slightly different from publicly-held Treasury bonds and notes. Even if Congress refuses to redeem Trust Fund bonds in full when they come due, the Social Security Act requires that subsequent FICA revenues must continue to be invested in those instruments.

The Treasury bills and notes you and investors aroung the world currently hold and currently buy are different. Is there a nonzero risk of future default in obligations on the full faith and credit of the Treasury? If so, aren't interest rates headed for the skies, and aren't US debt instruments on the way to worthlessness? Support Democrats. Save your businesses and your assets."

Economically literate younger workers: "Are you the SUCKER GENERATION? In the 1980s, your parents bought into the biggest financial scam in world history. Most of them still don't even realize they've been taken! Ronald Reagan put Alan Greenspan in charge of a "Social Security Commission" that raised FICA payroll tax rates by 25 percent for the poor and middle class. This tax increase on ordinary Americans was sold as the establishment of a Social Security Trust fund to cover future negative cash flow.

But, in the minds of Greenspan and others who devised the scam, this huge payroll tax increase was ALWAYS just a way to shift the burden of taxation away from the very wealthy. ALL of the positive cash flow generated by this shameless payroll tax hike was used to partially fund a SIXTY PERCENT CUT IN INCOME TAX RATES FOR THE WEALTHIEST, from 70 percent to 28 percent!

Now Republicans say there is ANOTHER Social Security crisis. They want to sell you a "privatization" scheme that's just another scam to get your hard-earned payroll money and shovel it out to the wealthy. Your parents never saw it coming, but you can't say we didn't warn you.

Are you smarter than your parents? Support Democrats!"

The pitch you suggest for reaching younger workers is, "Are you smarter than your parents?" I don't know how well that would work. When I was in my 20's I thought I was smarter than my parents. Your points about the Reagan scam are substantively valid, but that argument looks to the past. The orientation of a lot of the younger workers seems to be more toward the future. They've bought the idea that, without major change, Social Security won't be there for them.

Here's another idea for attacking Bush's strong support among younger workers: Cheney has admitted that a transition to private accounts would entail huge borrowing. He put it at more than $750 billion over just the next ten years, and more after that. Others have projected total borrowing in the $2 trillion range. Well, who do you think is going to pay the interest on all that? Who'll repay the principal? Ten years from now, Cheney will be 74. Don't look to him for help.

The younger workers expect to get more money from these private accounts than they would from Social Security. Even if that turns out to be true, any gain would be more than offset by the higher federal income taxes they'll have to pay to cover the borrowing. I hope enough of them will figure that out. It will be clearer to them once Bush releases a detailed plan.

Good points. Crafting specific ad copy is not my strong suit. I mainly wanted to convey the notion that, ever since Reagan, Republican Social Security politics has not really been about Social Security, but about reverse-Robin-Hood redistribution of the tax burden. I also wanted to point out that Democrats could use this notion to craft persuasive messages to peel away millions of economically aware young people from the current Republican coalition.

You're right; post #19 had a great summary of Reagan's Social Security scam 20 years ago, but was skimpy on details about Dubya's:

To understand Republican Social Security scams, think of George C. Scott in 'The Flim-Flam Man' or 'The Bank Shot', and how a conman might look at Social Security. Social Security is a very simple system--or at least it was before Reagan and Greenspan "saved" it in the early 80s. Money comes in from working people's paychecks, and money goes out to retirees' monthly checks. How can the 'have-mores' get their hands on bunches of that money?

Well, it's very simple. Either more money has to come in, and get diverted into 'have-more' pockets, or less money has to go out, and get diverted into 'have-more' pockets, or both. To make that happen, the Flim-Flam Man can say anything, use sleight-of-hand, and create loud diversions here and there. But, if you just FOLLOW THE MONEY, you may just come to understand what's really happening.

A flim-flam man plays on strong emotions to get what he wants for himself and his backers. To justify raising payroll taxes by 25 percent, Reagan used Baby Boomers' FEAR that future FICA cash flow alone would not be enough to pay their retirement checks. That was a great diversion! Boomers did not notice that, in the meantime, their extra FICA deductions were going to go to Congress 'for safekeeping'.

But now the Reagan scam is approaching its endpoint. In ten or fifteen years, it's time for Congress to start paying back Boomers the extra money they put up from their paychecks. At a minimum, the have-mores want the timepoint for starting payback to Boomers pushed ahead somehow. On top of that, they'd also like to find a new ruse for putting even more money aside for decades more of 'safekeeping'.

Republicans see the 2018 crossover to negative Social Security cash flow approaching and may feel future redistribution to the very wealthy is endangered. If Congress were to make good on the retirement benefits Baby Boomers already paid for and are expecting, how would future regressive "tax cuts" be financed? But cutting Boomers' benefits explicitly to finance a non-Social-Security agenda would be very awkward.

It would be much more expedient for Republicans to find a way to roll over a large portion of Trust Fund bonds into the far future rather than redeem them to pay Boomers starting in 2018. Privatized accounts for younger workers would serve that purpose very well if rolling over Trust Fund debt could be disguised as "conservative investment" on behalf of people most of whom still be far from retirement in the 'teens and twenties of the 21st Century.

Dubya is trying to appeal to younger workers' GREED to get them to go along with the new scam. Younger workers know that every penny of FICA and the Trust Fund already is promised to retirees, and that any "privatized accounts" would have to be carved out of money old people already are counting on for food and shelter. But, still, Republicans expect that millions of younger workers will be eager to get their hands on that blood money, and willing to trust it to the Flim-Flam Man for "safekeeping".

about Social Security must be preventing Bush and the republican Congress from continuing to spend the Social Security annual surplus. It should be invested by the Social Security administration in a single trust fund account which holds broad stock and bond index funds. This would improve the solvency of the trust fund and reveal the true deficit that Bush and the republican Congress are advocating in their budgets.

The republicans would howl with outrage and their only defense would be that every president and Congress has done it. But the democrats can easily argue that Bush's incessant complaints about the upcoming insolvency of the trust fund show that it is finally time to stop this practice. This would turn Bush's argument for privateering Social Security against him. He and other republicans would shit their pants.

Democrats need to stand firm that Social Security retain its defined benefit status to truly continue as a retirement insurance plan. Only some form of a defined benefit plan can provide an adequate minimum guaranteed amount to all retirees.

Some combination of increased revenue and decreased outlays together with some type of "add on" accounts may have to be agreed to in the future, but for now democrats should limit themselves to talking about stopping Bush from continuing to loot the trust fund and about maintaining Social Security as a defined benefit plan.

which of the policy proposals discussed in this thread so far would be "best". But both of us apparently have tolerances for boredom that are much more extensive than the median voter's!

In a democracy, we are stuck with what the median voter can be convinced to support or oppose, not what you or I might think is best. You've omitted the POLITICS. Politics is the analysis of who might favor and who might oppose various components of policy proposals, and WHY.

How can Democrats package these desirable Socal Security ideas to compete with Republican blue sky promises for some of the distinct constitutencies of the GOP coalition, so that we can bring the abomination of the current regime to an end?

Thanks to Rove, Falwell, Fox News, etc, the fight over Social Security is dramatically dumbed down, just like an election for third-grade president. The Republicans are promising unlimited free ice cream every lunch period. How can Democrats NOT sound like they're offering six hours of extra math homework every night?

to stop spending Social Security taxes on other things. I think demanding that it stop would cause a great deal of political damage to Bush and other republicans. They would have to defend looting Social Security on the basis that everyone else did it. That would give democrats lots of opportunities to use Bush's own words against him. Plus, actually creating an actual trust fund holding actual marketable assets would help the upcoming insolvency problem.

A longer term solution to the problems facing Social security will involve compromise by both political parties, but that is something which is impossible with the current republican party and its leaders. I think defeating Bush's plan for privatization and defeating republicans in the 2006 and 2008 elections are prerequisites to reaching an agreement on improving Social Security.

Lower the payroll tax rate so that it only generates enough revenue to pay for its intended purpose. Social Security is a wage transfer program. Only confiscate as much wage as needed and let the workers keep the rest.

Eliminating Social Security would create a massivce increase in welfare rolls. Social Security is a necessay safety net for millions of retirees and always will be.

Many people receiving SS checks would get welfare checks if SS ceased to exist. Welfare is a safety net. SS is a huge boondoggle that gives money to everybody so those needy seniors can cash a Social Security check instead of a welfare check. A safety net is cleverly hidden in a huge Ponzi scheme. Let's get rid of the Ponzi scheme and keep the safety net.

it. The amount of a person's benefit is based upon what that person paid in. To receive welfare a work history would not be necessary and the payment would be unrelated to the recipient's tax payments.

about all this Soc Sec Privatization:
Have you read this?.............Have a drink first
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=3319110

If this guy is right, we're in big trouble!
"...Maybe this is why Bush is in such a hurry to set up "private accounts" for Social Security, to draw more money into Wall Street to prop up struggling megacorps like GM, and perhaps the entire US financial system as well..."
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=3360453

The $4.7 Trillion Pyramid, Why Soc.Sec. won't be enough to save Wall St.
This is the title of an article by Michael Hudson, Distinguished Professor of Economics at the Univesrity of Missouri, Kansas City,published in the April 2005 issue of Harper's Magazine.That article makes it clear why Bush is intent on getting his hands on Social Security. Hudson says that having failed to generate the boom he has been promising through his tax cuts,he is intent on using the last safe pile of money in America to generate a "bubble" of prosperity before it goes bust. (snip) The other point Professor Hudson makes is that while Social Security is sound, it is the corporate pension funds,led by GM's massive fund that are broke.
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=3364013

This site has a link to a From The Wilderness speech, and several other VERY important articles on Bush/RW deception.

IMHO, this could very well be the video version of DU.

TruthStream.Org - Streaming the TRUTH to the American People

on the homepage. It makes the site look crass and smell of possible fraud.

Also, I saw nothing about Social Security at that link.