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Thursday, May 19, 2005
Pozen Criticizes Key Element of Bush's Plan
Former member of Bush's 2001 Commission to Strenghten Social Security Robert Pozen said wednesday that Bush should "back away" from insisting that Social Security reform include individual investment accounts. Pozen's comments are significant because it is his Social Security plan which has gotten the most praise and attention from an administration adamant on overhauling the nation's Social Security program.
Pozen's plan would reduce the growth of Social Security benefits for all but the poorest income earners, which is why it has earned the name "progressive price indexing." It also creates small private accounts for wealthier earners who would be losing some of their benefits. In April Bush publicly endorsed Pozen's plan.
Pozen's comments were made wednesday during a debate with Brookings' Peter Orszag, who has been critical of Bush's plans all along. He commented that the president's insistence on "carving out" individual accounts from a percentage of Social Security's
payroll tax has polarized congressional Democrats and threatens passage of a
Social Security restructuring that would deal with the program's financial
problems. He said, "I would advise the president to say that carve-out accounts are no longer
required."
Also of importance in recent Social
Security discussions, Bill Thomas (R-CA) of Ways and Means has been hinting that Social Security reform might be a good vehicle with which to push new and costly retirement-related tax cuts. The Center on Budget and Policy Priorities released this report yesterday, highlighting the point that tax cuts would do little to help out middle class families who would be hurt by Social Security benefits cuts, and would instead add to the deficit.
Posted by Becky Lewis
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