Progressive Indexing?

Let's lay off Bush's Social Security plan. As you know, he wants to index benefits to prices, not wages, for the vast majority (70%) of Americans, basically anyone who makes over $25,000 a year.

Well, judging from this Financial Times report, maybe the Prez just wants to give the middle- and upper-income classes MORE money:

Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times.

Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.

The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.

I'd rather have by benefits indexed to the one that's going UP, wouldn't you? Pity for the poor, though. Shouldn't somebody tell the President he's cutting poor people's benefits with his plan?

Incidentally, if you want an honest look at the ramifications of the President's boondoggle, I mean plan, take a look at this from the Center on Budget and Policy Priorities.

For those on the right still pushing the old canard that "Democrats are just playing defense because they don't have any ideas," the truth is we do have an idea. It's called Social Security, as insurance against retirement. Keeping it solvent would require tweaks like raising the cap on which payroll is taxed (so a corporate CEO isn't paying 0.56% of his income into the system when the rest of us are paying 6.2%). The above CBPP report shows that the President's plan gets us 30% of the way to solvency. That's actually worse than if you do nothing.

And here's another reason why Social Security must remain as insurance and not subject to market forces:

CHICAGO - United Airlines gained a significant financial victory with court approval Tuesday to dump its four pension plans, but the airline faces a tough challenge to win back the support of thousands of angry employees.

The pensions cover 120,000 current and retired United workers, including 62,000 active employees.

“Taxpayers had better buckle up because we will be in for a bumpy ride of bailout after bailout, as more and more corporations dump their pension plan obligations on the PBGC,” said U.S. Rep. Jan Schakowsky, D-Ill., referring to the Pension Benefit Guaranty Corp. that already is operating at a more than $23 billion deficit.

The agreement approved by Judge Eugene Wedoff would give the PBGC $1.5 billion in notes and convertible stock in a reorganized UAL Corp., United’s holding company. The agency, which called the agreement a “matter of last resort,” must still formally sign off on the termination before it takes effect.

Wedoff approved the pension plan over the objections of several unions, noting that the federal pension system preserves the majority of benefits for employees at troubled companies. He called it “the least bad” of the available choices, since it gives unprofitable United the best chance to keep functioning.

"The majority of benefits" is a bare majority. Some people will lose up to 50% of their pensions. And they'll have nothing else to live on except their own personal retirement savings (if they have any) and Social Security. That's the safety net the President would like to roll up and take with him.