Newest GOP SS proposal classic Bait-and-Switch

The latest GOP plan for Social Security (offered by Sen. Jim DeMint of South Carolina as well as House GOP members) is to take the Social Security surpluses from here until 2017 (which is when SS is projected to start running a deficit) and use that money to fund private accounts for willing citizens. Essentially this plan is a bastardized version of
Al Gore’s much-criticized “lockbox” plan, creating millions of mini-lockboxes for future retirees, private accounts paid for out of the surplus.

On its face, the plan to keep SS surpluses in the SS system is good, but this is classic bait-and-switch and is meant as a foothold for the eventual destruction of the current Social Security system. In 2017 is the plan simply going to go away since there is no funding source (see above)? Of course not. At that point, the plan will simply morph into the private accounts plan that Bush has been flogging (and being decisively rejected).

Earl Pomeroy (North Dakota, fuck yeah!) has easily seen through this as well (link)

Democrats scoffed at the Republican plan. "This is the same crowd that spent all the Social Security surplus in the first place," Pomeroy said. "We do need to stop spending the Social Security surplus, but by balancing the budget."

This is also the same crowd that has been scoffing at the idea of the Social Security surplus trust fund even existing.

``There is no trust fund,'' [President Bush] said after inspecting papers representing the $1.7 trillion in special Treasury securities held in a locked file cabinet at the Bureau of Public Debt facility.
In University Park, Pennsylvania, June 14, Bush said that once the payroll taxes are applied to Social Security benefits, the excess revenue ``funds all the different programs'' of government. ``And do you know what's left behind?'' Bush said. ``Paper. IOUs in a file cabinet in West Virginia.''

Bush implies that they are worthless IOUs when, in fact, they are bonds issued by the U.S. Treasury. The most ironic thing about this bait-and-switch proposal is that the new million mini-lockboxes that are to be created will not be investment accounts in the sense that you could invest in the stock market or something of your choosing; the new accounts will be invested in U.S. Treasury bonds(!) the same worthless pieces of paper sitting in a file cabinet in West Virginia. Media Matters has more on this contradiction.

Another aspect, one that anyone concerned about the federal deficit needs to know, is that we’ve been subsidizing the US Federal Budget with the SS surpluses in the last (I’m guessing here) 20 years. Why do we have a surplus in the first place? See here for a brief rundown. But basically we hiked payroll taxes in 1983 to anticipate the need for more money when Baby Boomers start drawing benefits. The GOP proposal will no longer allow the federal government to pad its bottom line with the Trillion dollars in anticipated surpluses over the next 10 years. This is going to be a big drawback for supporters of private accounts that still claim to be concerned with the deficit. (Personally, I like the fact the government would have to stop faking its budget numbers, but that money should be put back into Social Security, as was really intended).

I was initially going to tear apart the incredibly misleading and dishonest CNN.com article about this, but I would rather spend my time more wisely.