Bush's Social Security Twist

Two months of touting personal retirement accounts as an alternative to Social Security haven't done much for President Bush's attempt to reform the New Deal program. That's because his idea didn't really address the public's foremost concern: The system won't have enough money in coming decades.

Last week, however, Mr. Bush jolted the debate by proposing that middle- and high-income earners receive fewer Social Security dollars than under current formulas, while low-income earners would continue with the present formula and stay the same. The reductions would go some distance toward reducing the solvency crisis caused by the baby boomers entering retirement.

This "progressive indexing," as it's called, appears to be a political tactic. As momentum builds in Congress to either shore up or alter Social Security in response to Bush's urgings, the president wants to head off a Democratic idea of simply raising the Social Security payroll tax on Americans earning more than $90,000. Or at least he seeks to make any additional tax as small as possible.

The tax-cutting president has thus made a choice of reducing promised benefits, rather than raising the tax limit, and doing so on the backs of middle-income and wealthy taxpayers, while also trying to win over liberals in Congress for his other Social Security reforms by protecting benefits for low-income Americans.

Such twists and turns in the complicated Social Security debate are, unfortunately, a necessity. The system is complex, long-term, and close to people's livelihood. Even talk about reforming the system is like a cobra on Pennsylvania Avenue: Few politicians dare pick it up.

Bush never laid out many details for a Social Security overhaul. Yet specifics really matter, and progressive indexing may show the president finally putting hard numbers on the table for real negotiations with Democrats. He can't push through reforms simply with a Republican majority in Congress. Bipartisanship and compromise will be needed.

Bush's new proposal also challenges the popular assumption about Social Security as a sort of insurance program in which workers roughly get back a set portion of what they put into it. The president's idea revives the system's early notions of it as a welfare program that largely served the nation's poorest elderly.

No matter what the outcome of this long Beltway debate, Social Security must retain its role as a safety net.

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