A major problem with Bush’s “progressive price indexing” plan is that it would slash Social Security benefits for anyone making over $20,000 a year. A subtler, but more politically significant, problem is that the arguments Bush has used to justify his Social Security plan undermine his rationale for extending tax cuts to the wealthy.
Here is what Bush is saying now about Social Security:
I believe a reformed system should protect those who depend on Social Security the most. So in the future, benefits for low-income workers should grow faster than benefits for people who are better off…This reform would solve most of the funding challenges facing Social Security.
In other words, in the name of fiscal responsibility, higher income people should be expected to sacrifice. Contrast that statement to Bush’s justification in January 2003 for why much of his tax cuts should go to the very wealthy:
You hear a lot of rhetoric about tax relief in Washington, D.C., the old rhetoric of class warfare. My attitude is…the government ought not to try to pick and choose.
Of course, now that it suits his political purposes, Bush is picking and choosing. The problem is many of his tax cuts for the wealthy are set to expire soon. Bush will need to marshal his old anti-class warfare arguments to push for their extension. But his recent tact on Social Security will significantly complicate that effort.