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Bush SS fix=Massive Middle Class Benefit Cut *LINK*



The Progress Report

by Christy Harvey, Judd Legum and Jonathan Baskin with Nico Pitney and Mipe Okunseinde


Massive Middle-Class Benefit Cuts

Last night the president proposed deep Social Security benefit cuts for middle-class Americans. He formally "backed a specific plan to reduce future benefits ( for tens of millions of Americans." Yet in presenting the idea of progressive indexation ( -- a change in law that will give workers less money by tying their benefits to inflation instead of wage growth -- President Bush described it as a system "where benefits for low-income workers will grow faster than benefits for people who are better off." Here is the part he skipped: the plan "would reduce annual benefits for an average wage-earner who is 25 today and retires in 2045 by 16 percent.... For an average-earner who retires in 2075, the benefit reduction would be 28 percent ( ."

THE SHELL GAME: There are only two ways to improve Social Security's solvency: either increase the amount of money going into the system or decrease the amount of money leaving the system. If the president's plan solves as much of the system's funding problem ( as the White House claims it does, then it accomplishes this success through benefit cuts or increases in the payroll tax. Last night, the president dishonestly described his plan in a way that suggested it involves neither of those two options. Not only did the president not acknowledge the sweeping cuts that would be made under his plan, but his definition of a "high wage earner" was equally as misleading. A worker making $58,000 a year -- who will see his or her benefits cut by 42 percent ( under the president's plan -- certainly could not be considered "affluent."

WHERE'S THE BEEF?: In praising his plan, President Bush claimed that it guarantees "future generations [will] receive benefits equal to or greater than ( the benefits today's seniors get." But that isn't an improvement over the current system ( . The Social Security Administration estimates that the system's reserves will be exhausted by 2041; at that point, "benefits would be almost three-quarters what is currently promised, and considerably higher in inflation-adjusted terms than they are now." Bottom line: "If nothing is done to Social Security, the system will be able to meet the president's promise to ensure that all seniors receive a benefit larger than current levels."

ALL IDEAS ARE NOT ON THE TABLE: Bush was directly asked if he would "consider it a success if Congress were to pass ( a piece of legislation that dealt with the long-term solvency problem but did not include personal accounts." Bush responded, "I feel strongly that there needs to be voluntary personal savings accounts as a part of the Social Security system. I mean, it's got to be a part of a comprehensive package ( ." His answer reveals the president is more concerned with his ideological agenda than solving Social Security's problems.

Bush Speaks Softly, Congress Carries Big Axe

Last night President Bush proposed changing Social Security so low-income Americans would never have to " retire into poverty ( ." Thanks to the federal budget crafted by the president and passed last night ( by conservatives in both houses of Congress, they won't have to wait until they retire ( . Besides adding $5.3 billion ( in new, regressive taxes that will hit middle- and lower-income Americans hardest, the conservative budget features " cuts in scores of programs that middle- and low-income families rely on ( ." Most notably, Congress voted to slash Medicaid -- the country's premier health program for the poor -- by $10 billion over the next five years.

THE MEDICAID "VICTORY": The $10 billion in Medicaid cuts is significantly less than what the president had asked to be included in his budget, but will nevertheless be devastating for cash-strapped states struggling to provide adequate care. Medicaid, already facing increased costs "driven primarily by enrollment growth due to the economic downturn ( ," was the single largest proposed reduction ( in the Bush 2006 budget. Governors from across the country implored Congress to hold back on the cuts ( , and seemed to gain some traction when the Senate voted to strip Medicaid cuts and set up a bipartisan commission ( to study the problem last month. That's why White House officials counted the $10 billion blow to the country's poorest and neediest " as a victory ( ."

BUSTING THE BUDGET: In the name of "fiscal discipline," the budget passed yesterday by Congress slashes funding for education ( , health care ( and job training (,,SB110765539283746901,00.html?mod=home_whats_news_us) , but clears the way for $106 billion in new tax cuts over five years. Conservatives wanted to make sure that much of that money could never be used for anything useful, so $70 billion is "shielded from a Senate filibuster," including extensions of Wall Street specials like the 2003 cuts to capital gains and dividend tax rates. As the Washington Post notes, " the cost of those tax-cut extensions would more than nullify the savings from the spending cuts ( ." According to CBPP, the budget will actually " increase deficits over the next five years by $168 billion ( , compared with the deficits the Congressional Budget Office estimates would occur if there were no changes in policies." Take a look at an analysis by the Center for American Progress ( that examines the state-by-state impact of the federal Medicaid cuts.

THE POVERTY PRESIDENT: Last night, President Bush said the "whole goal" of his Social Security plan was to make sure " nobody retired in poverty ( ." Bush's sudden concern about "poverty" is touching, but millions of Americans could use the help before they retire. In President Bush's first term, poverty rose for three straight years ( , especially for children. What does the new budget do to address this problem? It slashes programs ( that provide health care to needy children, scales back on a campaign pledge ( to increase Pell grants which help low-income kids get an education and cuts job training (,,SB110765539283746901,00.html?mod=home_whats_news_us) programs that help the unemployed lift themselves out of poverty. For good measure, the budget also calls for a $600 million cut in the Food Stamp Program, making it harder for more than 300,000 low-income Americans to eat.

Under the Radar

IRAQ -- A CHALABI FAMILY AFFAIR: Ahmed Chalabi -- the one-time darling of the neo-cons who still holds a tender spot in Vice President Cheney's heart ( -- has done it again. Though his bid to be Iraq's top leader sputtered out months ago, Chalabi nevertheless captured a key position in the newly formed government as acting oil minister, overseeing the world's second largest proved crude reserves ( until a permanent chief is found. "With his nephew also installed as finance minister, Chalabi and his family appear to have a firm grip on the country's purse strings," the Associated Press reports.

FOREIGN POLICY -- MORE BOLTON BULLYING: The Washington Post reports new evidence that President Bush's United Nations nominee John Bolton tried to manipulate intelligence and intimidate experts ( into following his personal policy agenda. John S. Wolf, who served as assistant secretary of state for nonproliferation and as President Bush's senior envoy to the Middle East, told Senate staff members that Bolton had indeed tried to punish two State Department officials because they disagreed with him on nonproliferation issues. And Alan Foley, who ran the CIA's weapons of mass destruction office, told the committee that Bolton "tried to fire a national intelligence officer" who believed Bolton was exaggerating evidence on Cuba.

GUANTANAMO BAY -- FAKING IT: According to Reuters, "Authorities at Guantanamo Bay staged interrogations ( of detainees for visiting politicians and generals to give the impression that valuable intelligence was regularly being gathered." Former Army Sgt. Erik Saar says, "the military chose detainees for the mock interrogations who previously had been cooperative and instructed them to repeat what they had told interrogators in earlier sessions." The visiting VIPs would then believe ( they'd seen successful interrogations in action. (Instead of witnessing beatings or the use of attack dogs to intimidate detainees, for example, visiting officials watched cooperative detainees receive ice cream rewards.) Saar charges, "'only a few dozen' of the 600 detainees at the camp were terrorists and that little information was obtained from them."

SUDAN -- CIA GETS BUDDY-BUDDY WITH GENOCIDAL GOV'T: The U.S. has buddied up to the top intelligence chief in Sudan, Maj. Gen. Salah Abdallah Gosh, maintaining a close friendship with the man who has played a "key role" in directing the massacres in Darfur. Just last week, according to the Los Angeles Times, the CIA ferried him to Washington "for secret meetings sealing Khartoum's sensitive and previously veiled partnership with the administration (,0,6605677.story?coll=la-home-headlines) ." It's all part of a Bush administration's plan to " forge a close intelligence partnership with the Islamic regime that once welcomed Osama bin Laden (,0,6605677.story?coll=la-home-headlines) ," offering Sudan increased ties and "normalized" intelligence relations in return for coordination in crackdowns on al-Qaeda militants and other suspected terrorists. White House officials insist the new ties won't lead to a softening of its policy toward Sudan, but an October report by the nonpartisan Congressional Research Service suggested just the opposite, stating the administration was "concerned that going after these individuals could disrupt cooperation on counter-terrorism (,0,6605677.story?coll=la-home-headlines) ." Just this month, Deputy Secretary of State Robert Zoellick " backed away from the Bush administration's assertions ( that the mass killings and village burning amounted to genocide," despite the fact that "Darfur's death toll is likely to be even more appalling this year than last ( ," according to the Washington Post.


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