[Marxism] Greenspan to election winner: cut social security!
ffeldman at bellatlantic.net
Thu Feb 26 09:43:23 MST 2004
Bush has about four times as much money as Kerry in his campaign war
chest (both in the mega millions of course) but Kerry may be the best
man for this job.
Greenspan: Trim Social Security WASHINGTON, Feb. 25, 2004
Federal Reserve Chairman Alan Greenspan, stepping into the politically
charged debate over Social Security, said Wednesday the country can't
afford the benefits currently promised to the baby boom generation.
As CBS Chief White House Correspondent John Roberts reports, Greenspan
was looking ahead 4 years -- the date the nation's 77 million baby
boomers start to retire. That's when the Social Security surplus, which
has been used to offset government spending, begins to dwindle. And in
2017, disappears altogether.
At that point, the government will have to borrow not just for spending
but also to pay for retirement benefits. The added burden will keep
deficits high -- and could trigger what Greenspan called a
"debilitating" rise in interest rates.
Democratic presidential candidates denounced his proposals, and
President Bush and other Republicans sought to distance themselves from
the Republican Greenspan.
The central bank chairman also repeated his view that Bush's tax cuts
should be made permanent to bolster economic growth. He said the
estimated $1 trillion cost should be paid for, preferably, with spending
cuts so the deficit would not be worsened.
As for specifics on trimming Social Security, Greenspan told the House
Budget Committee that one possibility would be to switch to an
alternative measure of inflation for annual cost-of-living adjustments.
Instead of relying on the Consumer Price Index, he suggested switching
to a new chain-weighted CPI that gives lower inflation readings and thus
would mean smaller payment increases.
Greenspan, who turns 78 next week, also suggested tying the retirement
age for full benefits to longer lifespans with the age continuing to
rise. The 65-year age for retiring at full benefits started increasing
last year and now stands at 65 years and four months. It will increase
to 67 over the next two decades and then stop rising.
Greenspan said his comments simply voiced views he has held since he
chaired a blue-ribbon commission two decades ago. But the remarks set
off a political storm.
Democratic front-runner Sen. John Kerry said the way to address the
deficit was to roll back tax cuts for the wealthy and "the wrong way to
cut the deficit is to cut Social Security benefits. If I'm president,
we're simply not going to do it."
Sen. John Edwards, D-N.C., called it "an outrage' for Greenspan to call
for cuts in Social Security while at the same time endorsing making
Bush's tax cuts permanent. Rep. Dennis Kucinich, D-Ohio, went even
further and called for Greenspan to resign as Fed chairman, saying his
comments were "a disgrace."
Bush said Social Security benefits "should not be changed for people at
or near retirement."
Underscoring the view that Congress is not about to touch Greenspan's
suggestions, especially in an election year, Republican House Speaker
Dennis Hastert was asked to comment on the proposals and replied only,
"He's a fine man."
In his testimony before the Budget Committee, Greenspan said the current
deficit situation, with projected record red ink of $521 billion this
year, will worsen dramatically once the 77 million members of the baby
boom generation start becoming eligible for Social Security benefits in
just four years.
He said projections show the country will go from having just over three
workers supporting each retiree to 2.25 workers for every retiree by
"This dramatic demographic change is certain to place enormous demands
on our nation's resources - demands we will almost surely be unable to
meet unless action is taken," Greenspan said. "For a variety of reasons,
that action is better taken as soon as possible."
He said taking action now would mean that people still working would
have time to adjust their retirement savings plans to deal with smaller
Social Security benefits.
Greenspan said at some point the country needed to face the fact that
the government has promised more in entitlement benefits than it can
afford to pay. He said the problem was even worse for Medicare because
it was impossible to estimate what types of costly medical advances will
be available in coming years.
He did not mention that Congress late last year, at Bush's urging,
adopted a new prescription drug benefit as part of a Medicare overhaul
now estimated to cost $540 billion over the next decade.
"I am just basically saying that we are overcommitted at this stage,"
Greenspan said in response to committee questions. "It is important that
we tell people who are about to retire what it is they will have." He
warned that the government should not "promise more than we are able to
While the country is currently enjoying the lowest interest rates in
more than four decades, Greenspan warned that financial markets will
begin pushing long-term rates higher if investors do not see progress in
dealing with the projected huge deficits that will occur once baby
boomers begin retiring.
As he has in the past, Greenspan called on Congress to reinstitute rules
that require any future tax cuts or spending increases to be paid for
either by spending cuts in other areas or increases in other taxes. Bush
has called for the rules to cover only spending increases, not tax cuts.
CMMIV, CBS Broadcasting Inc. All Rights Reserved.
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Jari Tuominen Editor-in-chief Alternative News Agency
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