In President Bush's news conference last night on energy and Social Security reform, he stated, "I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of treasury bonds, which are backed by the full faith and credit of the United States government." (the entire transcript can be read here.

This statement is interesting given the fact that on his "60 day, 60 city tour" Bush spent much of his time discussing how the treasury bonds in the trust fund are little more than IOUs which the American people expect will be paid back by the government someday.

He has been discrediting the trust fund as nothing more than IOUs, just last week he said, "You see, a lot of people in America think there's a trust, in this sense -- that we take your money through payroll taxes and then we hold it for you, and then when you retire, we give it back to you. But that's not the way it works. There is no "trust fund," just IOUs that I saw firsthand, that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs." He has been criss-crossing the country saying this, yet last night said the trust fund has the full faith and credit of the United States Government.

Bush spent much of his press conference discussing the need for responsible reforms to Social Security; reforms that he says won't cut benefits for people and that will keep retirees receiving benefits out of poverty. Yet in the same breath he says he believes the best way to do this is to have workers divert a percentage of their payroll taxes into a personal account. Hundreds of economists, policy analysts, and Social Security experts have come out over the last few months and said that personal accounts will add a level of risk to the benefits being paid to recipients. Bush is still trying to market a bad plan to the American people, yet disguising it as one that is both necessary and progressive. Private accounts are neither necessary nor progressive, and luckily, polls have shown that more and more Americans are believing this to be true.

Today House and Senate budget negotiators came to an agreement on a $35 billion, five-year package of cuts in spending, after agreeing to trim the plan by about $6 billion. This agreement was made in large part because of objections voiced by Senator Gordon Smith (R-OR) concerning the size of Medicaid cuts, as well as the fact that those cuts would most likely grow in years to come. Smith sponsored an amendment in the Senate which stripped many of the entitlement cuts from the Senate's budget resolution. His amendment was passed by a margin of 52 - 48.

The budget plan agreed to in conference assumes $843 billion of discretionary spending in FY 2006. It reduces the amount of money that the House Ways and Means Committee will have to cut in reconciliation from $6 billion to $1 billion. The budget plan also assumes $106 billion worth of tax cuts over the next five years, $70 billion of which are protected under reconciliation.

This budget plan increases the already record-high deficit, and at the same time calls for more tax cuts for the wealthy. It cuts almost all funding for domestic programs by 1 percent, yet protects $70 billion worth of tax cuts in under reconciliation. Congress is effectively taking money from social programs that help the average American, and giving it out in the form of tax breaks to the wealthy.

For more information on the budget agreement, click here and here. To read Center on Budget and Policy Priorities Director Bob Greenstein's comments, click here. For a CBPP analysis, click here.

Tonight at 8:30 PM (EST) the President will hold his first publicly broadcasted evening news conference since the start of his second term. At the news conference he will discuss plans for overhauling Social Security, and he will also discuss the high gas prices which have been plaguing the nation in recent months.

Press Secretary Scott McLellan has noted that Bush will speak more specifically about his plans for Social Security reform than he has been. The President has been criticized by many for not speaking specifically enough regarding his exact plans for reform. During the conference Bush is also expected to urge Congress to pass his energy reform plan. High oil and gas prices are beginning to take a toll on the the level of national economic growth, as well as on Bush's approval ratings. Click here to read Sierra Club comments on his energy plan.

The U.S. economy grew at its slowest pace in two years as the gross domestic product grew by just 3.1 percent in the first quarter of 2005, according to the Commerce Department. This was the slowest growth since 2003 and was a half a percentage point lower than economist had predicted. Most experts cite rising energy costs, lower business investment, and a widening trade gap as the major factors contributing to the slowdown.

In a related story, statistics released by the Labor Department show weekly unemployment claims rising by 21,000 to 320,000. read more



Posted by Adam Hughes, 01:14:07 PM

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