Add-ons or Carve Outs

By Fester:

I was only half tuning into the speech last night.  I just have two observations.  First, I liked the MSNBC dial-groups, and I found it odd that if anything the McCain voters were usually slightly more amped up than the Obama voters, but more importantly, both groups were usually pegged at very positive reactions.  This was a marked change from the debates where we actually saw occassional sub-group dis-approval.

Secondly, and more importantly, there was one line in the domestic policy section that I want a whole lot more information on before I have Cernig's reaction of general pleasure on the domestic front.  And this line concerns Social Security.

From the LA Times full text ---

To preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security.  Comprehensive healthcare reform is the best way to strengthen Medicare for years to come.  And we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans. [my bold]

I really want to see a whole lot more detail on this proposal, but this is the one area that I could really commit to organizing opposition from the left on the Obama domestic agenda.  There are three categories of details that are possible.

 The first is that this is Obama's equivilant of "Mars -- Bitches" a throw-away line for a week or two and then nothing ever really happens.  The second is the benign add-on.  The add-on accounts would not impact Social Security financing or benefits at all.  Instead it would be a federally sponsored 401(K) with either/both a federal match and a federal lump seeding amount and relaxed withdrawal rules.  The final detail that brings us back to the 2005 Social Security fight is if these accounts are 'carve-out' accounts.  In this case, a chunk of money that would otherwise be used to pay for current Social Security benefits is diverted to private accounts where the individual bears all of the market risk and the systemic risk.  Now those are fighting words. 

Will Social Security be the bargaining chip for mostly universal healthcare as Ian Welsh suggests? 

Comments

[zak822]

None of this sounds good to me. I hope Ian is wrong. I'm with the bloggers who believe that progressives must keep President Obama aware that we ain't into cutting SS benefits in any context. And that it's voting issue for us. Giving the GOP and Blue Dogs what they want on SS will only look like weakness to them.

What is the problem with Obama just telling the truth, that CBO says we can pay benefits at current levels for 40 years without adjusting anything. We don't have to deal with SS now! Why leave it on the table?

Far too much of this sounds like funneling more money to the financial services industry. The guys who have managed money so well the last few years.