Again With The Social Security Benefit Cuts

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The current National Review (May 23) features an editorial which well-expresses some of my views on Social Security reform, to wit:

Many liberals worry that a reduction in benefits for higher-income workers will undermine Social Security politically. ... Everyone pays taxes to Social Security and gets benefits from it, and so everyone thinks that he is getting back what he paid in. Affluent voters do not complain about paying for the retirement of low-income workers because they do not notice that they are. The program would be much smaller and more manageable if it stopped robbing Peter to pay Peter. The liberal fear is that a more openly welfarist program that robbed Peter to pay Paul would forfeit Peter’s enthusiasm.

The Democrats are talking about increasing the payroll taxes on wealthy people, which would not be necessary if we didn't pay benefits to wealthy people in the first place, which is done only because the Democrats fear if we didn't pay it to wealthy people, S.S. would be less politically secure.

The article goes on to note how this fear is not well-founded, as there's no evidence that people would cease to support Social Security, and how the Democratic solution (raising taxes) would be even less-well-supported.

The article then goes a little nutty, though, before returning to sanity:

Under the Bush plan, he would receive $16,417 a year from the government. Bush’s critics say that the same worker would get $19,544 if the current benefit levels are maintained. But they are wrong about what the current system “promises†and are therefore using the wrong comparison. Since the program can’t pay for its promises, an unreformed program would automatically cut benefits. Social Security, unreformed, would give our middle-income worker only $14,267. If we reform the program now, he will come out ahead — and that’s before we add in his opportunities for accumulating wealth in his personal account.

I can't abide by the notion that a smaller increase constitutes a cut, or even that a change in rate of increase is a cut, but not even I would claim this constitutes coming out ahead. Ahead of what would happen if the Trust Fund goes bankrupt, yes, but that's not exactly a great goal to shoot for.

It is, really, neither a cut nor an increase. It's level funding, inflation-adjusted. I think you can make the case that level funding is reasonable -- doesn't hurt anyone, and helps keeps the Trust Fund perpetually solvent -- without trying to make people think their Hydrox cookies are really Oreos.

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