SURPRISE SURPRISE! GREENSPAN PUSHES SOCIAL SECURITY CUTS

SURPRISE SURPRISE! GREENSPAN PUSHES SOCIAL SECURITY CUTS

What else could people expect with the unrealistic tax cuts
and runaway spending that the Bush Administration has thrust
on the American people? The failed Supply-Side economic theory has
had less chance to succeed than the foolish idea of perpetual motion.
And it has all but bankrupted the national treasury.
The Bush Administration even wants VA disability compensation
reformulated because they say it would save about 50% of the money now
spent on the nation's disabled veterans. The idea didn't get by the
Congress this past year, but it was only narrowly defeated. They will
try again of course if the Republicans are reelected. In the
meanwhile, they are closing some VA hospitals. Therefore, no veteran
can afford to vote for any Republican without the full expectation and
knowledge that he or she is going to lose money, jobs, entitlements or
earned benefits. And there are just plenty of people out there who
are redneck stupid enough to suck it up and think that everything is
magically going to work out because they voted Republican...
Geeeeezzzeee... Surely, ignorance can't always be bliss...


Greenspan Pushes Social Security Cuts

47 minutes ago


By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - Federal Reserve Chairman Alan Greenspan, stepping into
the politically charged debate over Social Security, said Wednesday
the country can't afford the retirement benefits promised to baby
boomers and urged Congress to trim them.

He said that unless Congress acts, soaring budget deficits from
out-of-control entitlement programs could lead to a "very
debilitating" rise in interest rates in coming years.

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, Rep. Clay Shaw, the
Republican chairman of the Ways and Means subcommittee in charge of
Social Security, said Greenspan was wrong to call for benefit cuts.
"My message to seniors and those nearing retirement: You will receive
nothing less than 100 percent of what you've been promised. Your
benefits are safe and secure," Shaw said.

William D. Novelli, head of AARP, which represents retirees, said
Greenspan's proposals to trim benefits for future retirees "would be
unfair to boomers and younger workers, pulling the rug out from under
their retirement security."

But the Alliance for Worker Retirement Security, a coalition of 40
employer groups, praised Greenspan for sounding the alarm. "Social
Security's pending crisis can no longer be pushed off to future
generations," said Derrick Max, the group's executive director.

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 2025.

"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 over committed 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 deliver."

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.