So What Did He Talk About?

Once again, we received a very genteel performance from our President. No real challenges, nothing unexpected, no requests to identify one (just one!) mistake he may have made. The big news, although he framed it as though he were saying nothing at all, was that he intends to gut social security. Here's what he said:

I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off. By providing more generous benefits for low-income retirees, we'll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire into poverty. This reform would solve most of the funding challenges facing Social Security.

That sounds nice and innocuous, but here's what he means. Benefits for higher-income workers will not rise with the cost of living as quickly as benefits for low-income workers will. Instead of staying at a flat line, at which someone retiring in 2025 would get the same exact payment as someone retiring today--ignoring the effects of inflation--payments for low-income retirees will grow faster than payments for higher-income retirees. Payments for higher-income retirees in 2025, then, will grow more slowly and will be closer to that flat line of what retirees get today!

Although Bush has refused before now to provide any specifics for his Social Security reform, the working assumption has been that he supports a plan devised by Robert Pozen, former vice chairman of Fidelity Investments and currently chairman of MFS Investment Management. The President's sketchy comments last night do nothing to undermine that assumption. For a more detailed idea of what the Pozen plan would mean, the Center on Budget and Policy Priorities gives us an analysis. It tells us that progressive price indexing such as what Bush described "would impose substantial benefit reductions on average workers" and "would transform Social Security over time from a retirement program to more of a welfare system."

The President chose his bland and unassuming language on purpose, and it slipped past some people. Ted Koppel admitted on Nightline that he didn't think the President made any news, but he was corrected by The Washington Post's Dana Milbank. Although Milbank wrote analysis of the event for The Post, the lead on the paper's front page clarified the issue: "President Bush called on Congress last night to curtail future Social Security benefits for all but low-income retirees in an urgent new effort to address the popular program's shaky finances." On The Post's Website, Dan Froomkin helpfully provides a rundown of how other papers reported the press conference.