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Bush Scheme Would Slash Middle-Class Benefits
Middle-class workers would suffer dramatic cuts in guaranteed retirement benefits under President Bush's latest scheme to dismantle Social Security.
By combining his proposal for private accounts with a change in the way benefits keep pace with inflation, workers retiring in 2055 at age 65 would face cuts of 66 percent to 87 percent of the Social Security benefits they are now guaranteed, economists at the Center on Budget and Policy Priorities project.
That means, for example, that workers earning $36,000 a year would see their promised benefits cut - in 2005 dollars - from $22,100 a year to $7,510. Workers earning $59,000 a year would drop from $29,300 in annual benefits to just $3,750.
Economists and newspaper editorials have blasted the scheme since Bush announced it at his April 28 news conference, where he boasted that it would protect low-wage workers and affect only the affluent, with no mention of the damage to the middle class.
The Economic Policy Institute said that Bush's plans would fundamentally change Social Security from what has been a hugely successful public pension plan to "simply an anti-poverty program."
"This erosion will weaken the widespread support for the program over time, with most workers receiving less and less for the taxes that they contribute," EPI said. "The intention seems to be to fundamentally change Social Security from a dependable, guaranteed retirement benefit to a bare-bones safety net program."
Specifically, Bush is proposing to tie future increases in Social Security benefits to the price index rather than the wage index - meaning benefits would be tied to rising prices instead of wages, which grow faster.
In an editorial this week, the New York Times said Bush "had saved the worst for last," in making the price-indexing proposal as he neared the end of his sham town hall meetings across the country.
By combining his proposal for private accounts with a change in the way benefits keep pace with inflation, workers retiring in 2055 at age 65 would face cuts of 66 percent to 87 percent of the Social Security benefits they are now guaranteed, economists at the Center on Budget and Policy Priorities project.
That means, for example, that workers earning $36,000 a year would see their promised benefits cut - in 2005 dollars - from $22,100 a year to $7,510. Workers earning $59,000 a year would drop from $29,300 in annual benefits to just $3,750.
Economists and newspaper editorials have blasted the scheme since Bush announced it at his April 28 news conference, where he boasted that it would protect low-wage workers and affect only the affluent, with no mention of the damage to the middle class.
The Economic Policy Institute said that Bush's plans would fundamentally change Social Security from what has been a hugely successful public pension plan to "simply an anti-poverty program."
"This erosion will weaken the widespread support for the program over time, with most workers receiving less and less for the taxes that they contribute," EPI said. "The intention seems to be to fundamentally change Social Security from a dependable, guaranteed retirement benefit to a bare-bones safety net program."
Specifically, Bush is proposing to tie future increases in Social Security benefits to the price index rather than the wage index - meaning benefits would be tied to rising prices instead of wages, which grow faster.
In an editorial this week, the New York Times said Bush "had saved the worst for last," in making the price-indexing proposal as he neared the end of his sham town hall meetings across the country.