“President Bush’s plan calls for maintaining existing benefits for “current and near-retirees.” Additionally, Bush would like to create “voluntary personal retirement accounts for younger workers.” The final element to the President’s three point plan for Social Security, as outlined in Chapter 3 of his “Agenda for America,”” is a commitment to no increases in the Social Security payroll tax. 

Here are the complete remarks from Chapter 3:

The President understands that Social Security must be fixed, and workers deserve to own part of their Social Security benefits and to build a nest egg for retirement. He has put forward clear principles to strengthen Social Security permanently:

No Changes in Benefits For Current Retirees and Near-Retirees – For those already in or near retirement, promises made must be promises kept.

Voluntary Personal Retirement Accounts for Younger Workers – These personal accounts would give workers ownership, control, and the opportunity to use their Social Security payroll taxes to build a nest egg for retirement that can be passed on to their families.

No Increases in the Social Security Payroll Tax – The President has stated that we cannot tax our way to fixing Social Security.

Does any of this seem odd?

Let’s have a look: Money collected for Social Security is dispersed to existing beneficiaries.  Therefore, when any amount is taken out of this pool, the distribution will decrease.  You have a choice, a decrease in the number of individuals, or a decrease for each individual.  This means increase the retirement age to 70, or decrease the benifits for each person.

This is a fundamental issue with Bush’s Social Security plan, as dictated by his “Agenda for America.”  At best, his plan is problematic, and at worst catastrophic.

He also insists that there will be no increases in the Social Security payroll tax.  Without additional inflow of money, how will the system be able to accommodate his proposed changes? 

The President has not clearly identified how he intends on implementing his three-point plan for Social Security.

Considering Bush’s flawed plan for Social Security, it can best be described as a political stunt, similar to the one Lynne Cheney is performing.