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Vilsack Fever

Ramesh Ponnuru:

Tom Vilsack has endorsed making Social Security benefits grow with prices, rather than wages — thus stopping them from growing at all, after inflation. He isn’t even talking about doing it in a “progressive” way, with low-income workers shielded from the hit, as President Bush has. So on this issue, he’s to the right of the president, not to mention every other candidate for the presidency in 2008.

I like his chances of securing the Democratic nomination more and more with every passing day!

I should note for the sake of precision, that once an individual’s Social Security benefits are set, the do rise with prices rather than wages. The wage index comes into play when calculating your initial benefit level. It should also be said that while, technically, ending the wage index would massively cut benefits and thus save a bunch of money over the long term it’s by no means clear that this would be the actual result. Before the wage index was implemented, what you had was a lot of congressional mucking about, with benefit levels raised at arbitrary points in time by arbitrary amounts according to whatever political strategy the politicians of the time were following. The wage index has served to substantially rationalize the system.

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