Chapter 6: 2009
Sabot Cat
Proud Trans Girl
- Location
- Indianapolis
Chapter 6: 2009
The Cabinet of George W. Bush
Ownership Society
In his inaugural address, President George W. Bush presented his vision for the country and how it will overcome the Great Recession.
"Everyone will have a stake in the American dream once more," Bush said. "Together, we can build an ownership society that fulfills the promise of our country." [1]
The Ownership Society would become the name of the domestic policies of the Bush presidency, which would combine stimulatory tax cuts with reduced spending and changes to social programs such as Medicare, Medicaid, and Social Security. The first piece of Ownership Society legislation was the Economic Recovery and Middle-Class Tax Relief Act of 2009 (ERMCTRA) which made the Bush tax cuts of 2001 and 2003 permanent, including the effective abolition of the estate tax by 2010. Several tax cuts and credits from the Kerry administration were also extended, including the reduction of the corporate tax rate from 35 to 33.25 percent.
New tax cuts included permanently indexing the Alternative Minimum Tax exemption to inflation[2], reducing the FICA payroll tax from 6.2 to 4.2 percent[3] and "active financing", which allowed manufacturers and financial firms to defer their U.S. taxes on overseas income.[4] The College Opportunity Tax Credit, the Child and Dependent Care Tas Credit, the New Markets Tax Credit (NMTC) Program,[5] the Railroad Track Maintenance Tas Credit[6], the Ethanol Excise Tas Credit[7], and the Nonbusiness Energy Property Tax Credit[8], were also all extended or made permanent parts of the tax code.
The bill overwhelmingly passed the House, before passing the Senate by a vote of 63-37, with all 56 Republicans voting in favor, joined by seven Democratic Senators: Max Baucus of Montana, Evan Bayh of Indiana,[9] Tim Johnson of South Dakota, Tony Knowles of Alaska[10], Mary Landrieu of Louisiana, Blanche Lincoln of Arkansas, and Ben Nelson of Nebraska.[11] Democratic Senators up for re-election in the next midterm from states that Bush had won comfortably, including Senate Minority Leader Tom Daschle of South Dakota,[12] Betty Castor of Florida[13], Bryon Dorgan of North Dakota[14], and Dan Mongiardo of Kentucky[15], all voted against the law by citing the growing deficit, its disproportionate benefit to the wealthy, and the active financing provision encouraging outsourcing.
"Republicans have chosen exactly the wrong solution to this crisis," Daschle said. "They have discarded the framework of fiscal responsibility with a huge tax cut that will only make this recession worse."[16]
Daschle and these senators' opposition to Bush's agenda represented a rare perspective, as Bush enjoyed approval from nearly 70 percent of the American public according to Gallup.[17] Bush had bipartisan support in Congress as well, reflected in the speedy confirmation of his Supreme Court appointee to fill Sandra Day O'Connor's vacancy, Judge Edith "Joy" Clement of the 5th Circuit.[18][19] Joy Clement was first appointed to the court of appeals by the president in 2001, and confirmed by a vote of 99-0 in the Senate.[20] Clement was considered a moderate jurist[21] who was nonetheless tough on crime,[22] offering a conservative contrast to the more liberal criminal justice jurisprudence of Chief Justice Sonia Sotomayor. Clement was confirmed as an Associate Justice by a vote of 79-21, with all 56 members of the Republican caucus joined by 23 Democrats.
A conservative caucus of Democrats also helped to prevent or dissuade the filibuster of Bush's legislative proposals during the first 100 days. The Senate thus overwhelmingly passed the Class Action Fairness Act[23], intended to reduce forum shopping for class action lawsuits, and the Protection of Lawful Commerce in Arms Act[24], which prevented gun manufacturers from being held liable for crimes committed with their weapons. This spirit of bipartisanship would soon be tested by austerity and the most audacious goal that the Bush administration set for itself and the pinnacle of the Ownership Society: the partial privatization of Social Security.
Austerity
On Feb. 24, 2009, Bush laid out the challenges he believed the cost of social programs posed to the fiscal solvency of the nation before a joint session of the United States Congress, reminiscent of a State of the Union address.
"The rising cost of entitlements is not a problem that is going away," Bush said. "Every year we fail to act, the situation gets worse. We must save Social Security."[25]
Two days after his address to Congress, Bush submitted his 2010 federal budget proposal which featured sharp cuts on non-military discretionary spending in line with the priorities laid out in his address. The budget cut Medicare spending by $40 billion over five years[26] by reducing payments to hospitals, doctors, and other providers.[27] Similarly, it cut spending on Medicaid through changing benefit and cost sharing formulas for enrollees, shifting more of the burden from the federal government to beneficiaries and state governments.[28] Finally, the budget cut $12 billion in student loan subsidies.[29] Democrats were sharply critical of the austerity measures imposed on social programs.
"George Bush calls this the ownership society, but what he really wants is a 'you're-on-your-own' society," Sen. Barack Obama (D-Ill.) said.[30]
Daschle led the Democratic caucus to unanimously oppose this budget, leading Congressional Republicans to subsume it into a bill to repeal the healthcare provisions of TRACER.
The Cut and Balance Reconciliation Act (CBRA), pronounced derisively as 'cobra' before becoming mainstream, repealed the healthcare provisions of TRACER, including the tax credits for the unemployed and small businesses to pay for health insurance premiums and retirees to purchase a health plan through the Federal Employee Health Benefits Program. Some conservative Democrats blasted this as a "Bush tax hike", as it resulted in a net increase of tax burdens to tune of $1.25 trillion over the next decade.[31] Republicans argued that it was a part of the larger tax reform effort pursued in ERMCTRA, trading a targeted and complex tax credits scheme with broader and more economically stimulating tax cuts. The bill would also require Congress to pass $1.2 trillion in ten-year discretionary spending cuts by January 2011, or automatic cuts ("sequestration") would be triggered. The bill further set a gradually decreasing cap on federal spending to 20 percent of GDP by 2019.[32]
Finally, the Cut and Balance Reconciliation Act established the National Commission on Protecting Seniors (NCPS).[33] The commission was composed equally of Republicans and Democrats appointed by the president.[34] Members included Sen. Dave Camp, former Sen. Alan Simpson, former Gov. Mark Warner, and Rep. John Spratt. The commission would recommend reforms to Social Security and hold hearings regarding the matter. The NCPR was also known as the Camp-Warner Commission, from the name of its co-chairs and to promote the image of bipartisanship by the Bush administration.
Daschle led the Democratic caucus to vote unanimously against CBRA, and the Democratic leadership as a whole preemptively opposed any cuts or changes to Social Security. When asked when the Democrats would offer their own Social Security reform proposal, House Minority Leader Nancy Pelosi responded, "Never. Does never work for you?"[35] The Democrats newfound opposition to the Ownership Society policies would make the passage of any Social Security partial privatization or reform legislation more difficult. Divisions among Republicans imperiled such efforts outright.
Social Security debate
The Bush administration's primary legislative objectives for Social Security reform were partial privatization and reducing its deficit in the long-term. The NCPS released its first report in late February along these lines. Under the NCPS plan, workers could divert up to four percent of their taxable wages going into FICA and place into private retirement accounts (PRA).[36] The retirement age would also be increased by one month every two years after the retirement age reaches 67.[37] Finally, the Cost-of-Living Adjustment (COLA) would be adjusted to "more accurately reflect" inflation over the long-term, making the program less generous.
The Chairman of the Senate Committee on Aging, Sen. Bob Corker (R-Tenn.), led the advancement of the first Social Security reform bill under the NCPS's loose guidance. Corker referred to the current Social Security scheme as "generational theft" and made an urgent case for reform.[38]
"You can't take this off the table if you want to solve our nation's fiscal issues,"[39] Corker said. "The Social Security component can be dealt with relatively painlessly if we just began to do it. But if we fail to act, it could be the undoing of our nation."[40]
The Corker-Alexander bill would gradually increase the retirement age, use chained-CPI for COLA, and establish the private retirement accounts. The Senate Aging Committee forwarded its draft bill for broader consideration of the Senate on April 25, 2009, with Corker and Sen. Lamar Alexander (R-Tenn.) being its primary champions.
"This bill will help this program to be solvent over the long haul so future seniors will have the opportunity to enjoy these benefits," Corker said.[41]
Many Senators from both parties opposed raising the retirement age and using chained-CPI for COLA or making the benefits less generous. Yielding to pressure from the White House to take action on Social Security before the summer recess, Senate Minority Leader Mitch McConnell held a floor vote on the Corker-Alexander bill. The Senate rejected the proposal by a vote of 42-58, with all of the Democratic caucus joined by 13 Republicans voting against it. Mike Huckabee and John McCain offered an alternative proposal, the Social Security Personalization Act, which would create private savings accounts but not change COLA. Deficit hawks in the House, such as Speaker John Boehner and Budget Committee Chairman Paul Ryan, were less favorable to any Social Security reform without adjustments to COLA or raising the retirement age due to its impact on the budget.
Foreign policy
As the Senate debated Social Security, as national attention would turn towards foreign affairs. On June 12, 2009, reformist Iranian President Akbar Hashemi Rafsanjani lost to conservative Mahmoud Ahmadinejad amid economic turmoil. Ahmadinejad campaigned on withdrawing from the Paris agreement with the United States and the EU-3 to restart its civilian nuclear program. Shortly after Ahmadinejad's election, Bush re-imposed economic sanctions on Iran that had been lifted under the Kerry administration. The United States joined the European Union in imposing new sanctions for not adhering to the safeguards prescribed by the International Atomic Energy Agency. [42]
"They've declared that they want to have a nuclear weapon to destroy people, some in the Middle East," Bush said. "That's unacceptable to the United States, and it's unacceptable to the world."[43]
Sen. Robert Byrd (D-W.Va.) argued that Bush was putting the nation on a road to war with Iran, "Not only does this echo the chest-pounding rhetoric which preceded the invasion of Iraq in 2002, but also raises the specter of an intensified effort to make the case for an invasion of Iran."[44]
The Bush administration's foreign policy was also scrutinized in regard to North Korea. Bilateral talks that had been initiated under the Kerry administration were terminated, and the construction of light water reactor nuclear power plans were shuttered. Bush cited a failure to comply sufficiently with IAEA inspectors in determining the regime's progress in dismantling its existing nuclear facilities. On July 4, 2009, North Korea conducted an underground detonation of a nuclear device. It had a yield of 2.35 kilotons and coincided with missile tests two months earlier.[45]
"The North Korean regime remains one of the world's leading proliferator of missile technology, including transfer to Iran and Syria," Bush said. "The United States condemns this provocative act, which constitutes a threat to international peace and security."[46]
Summer of discontent
On July 15, National Commission on Protecting Seniors released a second report with a fuller set of recommendations for Social Security. The commission suggested that instead of using chained CPI, the Cost-of-Living Adjustment could use Progressive Price Indexing (PPI).[47] PPI would constitute a larger cut than chained CPI, but the distributional impact would be more progressive, as low-income earners would have their benefits calculated according to wage indexing while high-income earners would have it calculated by price indexing.[48] Benefit reductions would increase gradually, and Social Security pay-outs would essentially flatten across all income levels instead of the wealthier receiving more.[49] Combined with the private savings accounts, maximum earners with incomes of $90,000 or more would not receive any Social Security benefits by 2075.[50]
Rep. Paul Ryan fostered the passage of the NCPS's recommendations from the House Budget Committee, with only moderate changes[51] The Urban Institute found that the Ryan bill would reduce the 75-year Social Security deficit by nearly 70 percent.[52] The House of Representatives approved the Ryan bill by a vote of 220-215 on July 31, 2009, days before the Congress moved to adjourn for summer recess.
During the recess, President Bush personally campaigned for Social Security partial privatization throughout the country.
"We must join together to strengthen and save Social Security," Bush said. "We must honor its great purposes in this new century."[53]
The president especially targeted states of red state Democrats up for re-election in 2010, hoping to pressure them into accepting the proposed reforms.[54] The Club for Growth waged a $50 million advertising campaign to persuade on-the-fence Republicans to adopt the changes and convince Americans of their merit.[55] Before this, a majority of Americans disapproved of the president's handling of Social Security. After an extensive public relations blitz throughout the country, that number soared to over 60 percent within four months. [56]
The AARP mobilized the largest opposition to the Social Security reform proposals, arguing that it would imperil the program. The AARP mobilized hundreds of thousands of phone calls to Congress and ran full page ads in over 50 daily newspapers and Capitol Hill publications in opposition to the program.
"We are dead-set against carving private accounts out of Social Security," AARP CEO Bill Novelli said.[57]
The AARP's efforts were joined by the Older Women's League (OWL) and various progressive groups, who marched on the capitol and attended town halls during the summer recess.
National Commission on Protecting Seniors (NCPS) member Alan Simpson dismissed the opposition to commission's recommended changes to Social Security.
"These gray panthers, the pink panthers, are babbling into the vapors," Simpson said. "There are people on Social Security who milk it to the last degree. We've reached a point where it's become the cow with 310 million tits."[58]
Activist groups calling themselves the "Gray Panthers" became a common sight at the increasing number of protests throughout the nation. Anti-privatization and anti-austerity protests took place in Washington D.C., New York City, and major cities throughout the country, with the largest taking place on Labor Day. Millions of protestors marched to show their opposition to the Bush administration.[59] The Labor Day protests became the largest protest in the nation since the Vietnam War, with nearly one million marchers on Washington, D.C. voicing both opposition to partial privatization and austerity, as well as discontent with the ongoing recession. A poll conducted by USA Today, CNN, and Gallup found that more than 60 percent of Americans opposed partial privatization of Social Security.[60]
Returning from the summer recess, Sen. Dave Camp (R-Mich.) released a Senate version of the Ryan bill for amendment and debate on Sept. 14, 2009. In October, hundreds of amendments were offered to the legislation, and debate over its provision drastically reducing momentum for its passage in a full floor vote. Republican Senators still criticized raising the retirement age, while offering support for the private retirement accounts. Senate Majority Leader Mitch McConnell attempted to unify the Republicans around a deadline before the 2010 State of the Union speech, as negotiations dragged into next year. The centerpiece of the Ownership Society was in peril.
Chapter 6 Notes and Bibliography
[1] Bush offers up 'ownership society'
[2] At Long Last, a Permanent Patch for a Dreaded Tax | TIME.com
[3] https://web.archive.org/web/20101211225438/http://blogs.ajc.com/jamie-dupree-washington-insider/2010/12/09/summary-of-tax-deal/
[4] 'Active financing' exemption for some businesses to cost taxpayers $9 billion
[5] Text of S. 1133 (113th): New Markets Tax Credit Extension Act of 2013 (Introduced version) - GovTrack.us
[6] https://archive.is/20130414065529/http://www.aslrra.org/legislative/Action_Alert/
[7] House Passes Tax Bill with Biofuel Incentives
[8] Tax Cut Extension Bill Wends Its Way to White House
[9]U.S. Senate: U.S. Senate Roll Call Votes 108th Congress - 1st Session
[10] Tony Knowles on Tax Reform
[11]U.S. Senate: U.S. Senate Roll Call Votes 107th Congress - 1st Session
[12] CNN.com - Daschle criticizes Bush tax cut, offers economic boost plan - January 4, 2002
[13] https://www.sun-sentinel.com/news/fl-xpm-2004-10-21-0410201322-story.html
[14] Byron Dorgan on Tax Reform
[15] Dan Mongiardo on Tax Reform
[16] CNN.com - Daschle criticizes Bush tax cut, offers economic boost plan - January 4, 2002
[17] Presidential Job Approval | The American Presidency Project
[18] https://www.washingtonpost.com/arch...5d0-b7b0-4b4a604107bb/?utm_term=.0684e806e48a
[19] https://abcnews.go.com/Politics/SupremeCourt/story?id=953790
[20] https://usatoday30.usatoday.com/news/washington/2005-10-27-list-next_x.htm
[21] https://web.archive.org/web/20060506052721/https://www.foxnews.com/story/0,2933,163025,00.html
[22] https://usatoday30.usatoday.com/news/washington/2005-10-27-list-next_x.htm
[23] https://en.wikipedia.org/wiki/Class_Action_Fairness_Act_of_2005
[24]https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_in_Arms_Act
[25] http://www.ontheissues.org/Celeb/George_W__Bush_Social_Security.htm
[26] http://www.nbcnews.com/id/11237564/ns/politics/t/bush-trims-medicaid-medicare-programs/
[27] https://web.archive.org/web/20110801061618/http://www.latimes.com/news/nationworld/nation/la-na-debt-talks-20110801,0,3461991.story
[28] https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7465.pdf
[29] http://www.nbcnews.com/id/11237564/ns/politics/t/bush-trims-medicaid-medicare-programs/
[30] https://abcnews.go.com/Politics/story?id=4536346&page=1
[31] https://www.heritage.org/health-car...r-closer-look-senator-kerrys-health-care-plan
[32] http://www.cnn.com/2011/POLITICS/07/19/debt.talks/index.html
[33] http://www.washingtonpost.com/wp-dyn/articles/A28120-2005Mar11_2.html
[34] http://www.fiscalcommission.gov/members
[35] http://archive.boston.com/news/nati...2006/11/12/social_security_at_roots_of_shift/
[36] https://web.archive.org/web/20040723221319/http://www.cbo.gov/showdoc.cfm?index=5666&sequence=0
[37]https://web.archive.org/web/20101113072530/http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/CoChair_Draft.pdf
[38] https://www.salon.com/2017/10/21/who-in-the-hell-is-bob-corker/
[39] https://www.knoxnews.com/story/opin...ore-social-security-tva-shortfalls/101294090/
[40] https://www.nashvillepublicradio.or...-lonely-mission-raise-retirement-age#stream/0
[41] https://thehill.com/homenews/senate...ate-republicans-offer-entitlement-reform-plan
[42] http://www.weeklystandard.com/the-first-100-days/article/6010
[43] http://www.washingtonpost.com/wp-dyn/content/article/2008/03/20/AR2008032002284.html
[44] http://www.washingtonpost.com/wp-dyn/content/article/2007/10/25/AR2007102502606.html
[45] http://www.bssaonline.org/content/102/2/467.abstract?sid=7c769220-2dfc-45b2-96d7-73fef9aa8d48
[46] https://georgewbush-whitehouse.archives.gov/news/releases/2006/10/20061009.html
[47] https://www.washingtonpost.com/news...ned-cpi/?noredirect=on&utm_term=.f2907110bddb
[48] https://www.cbpp.org/research/an-an...rice-indexing-to-set-social-security-benefits
[49] https://www.cbpp.org/research/progr...icantly-cut-social-security-benefits-for-many
[50] https://www.cbpp.org/research/an-an...rice-indexing-to-set-social-security-benefits
[51] https://www.cbpp.org/blog/not-so-progressive-price-indexing-is-the-wrong-fix-for-social-security
[52] https://www.urban.org/sites/default...ve-Social-Security-Reforms-Details-Matter.PDF
[53] http://www.ontheissues.org/Celeb/George_W__Bush_Social_Security.htm
[54] https://www.vox.com/policy-and-politics/2017/1/9/13781088/social-security-privatization-why-failed
[55] https://web.archive.org/web/20051101082610/http://www.alternet.org/columnists/story/20916
[56] https://www.vox.com/policy-and-politics/2017/1/9/13781088/social-security-privatization-why-failed
[57] https://www.chicagotribune.com/news/ct-xpm-2005-01-30-0501300337-story.html
[58] https://www.newsweek.com/real-problem-alan-simpsons-social-security-statements-they-are-false-213882
[59] https://www.theatlantic.com/technology/archive/2017/01/womens-march-protest-count/514166
[60] https://www.usatoday.com/news/polls/tables/live/2005-02-07-poll-results.htm#socsec
The Cabinet of George W. Bush
Ownership Society
In his inaugural address, President George W. Bush presented his vision for the country and how it will overcome the Great Recession.
"Everyone will have a stake in the American dream once more," Bush said. "Together, we can build an ownership society that fulfills the promise of our country." [1]
The Ownership Society would become the name of the domestic policies of the Bush presidency, which would combine stimulatory tax cuts with reduced spending and changes to social programs such as Medicare, Medicaid, and Social Security. The first piece of Ownership Society legislation was the Economic Recovery and Middle-Class Tax Relief Act of 2009 (ERMCTRA) which made the Bush tax cuts of 2001 and 2003 permanent, including the effective abolition of the estate tax by 2010. Several tax cuts and credits from the Kerry administration were also extended, including the reduction of the corporate tax rate from 35 to 33.25 percent.
New tax cuts included permanently indexing the Alternative Minimum Tax exemption to inflation[2], reducing the FICA payroll tax from 6.2 to 4.2 percent[3] and "active financing", which allowed manufacturers and financial firms to defer their U.S. taxes on overseas income.[4] The College Opportunity Tax Credit, the Child and Dependent Care Tas Credit, the New Markets Tax Credit (NMTC) Program,[5] the Railroad Track Maintenance Tas Credit[6], the Ethanol Excise Tas Credit[7], and the Nonbusiness Energy Property Tax Credit[8], were also all extended or made permanent parts of the tax code.
The bill overwhelmingly passed the House, before passing the Senate by a vote of 63-37, with all 56 Republicans voting in favor, joined by seven Democratic Senators: Max Baucus of Montana, Evan Bayh of Indiana,[9] Tim Johnson of South Dakota, Tony Knowles of Alaska[10], Mary Landrieu of Louisiana, Blanche Lincoln of Arkansas, and Ben Nelson of Nebraska.[11] Democratic Senators up for re-election in the next midterm from states that Bush had won comfortably, including Senate Minority Leader Tom Daschle of South Dakota,[12] Betty Castor of Florida[13], Bryon Dorgan of North Dakota[14], and Dan Mongiardo of Kentucky[15], all voted against the law by citing the growing deficit, its disproportionate benefit to the wealthy, and the active financing provision encouraging outsourcing.
"Republicans have chosen exactly the wrong solution to this crisis," Daschle said. "They have discarded the framework of fiscal responsibility with a huge tax cut that will only make this recession worse."[16]
Daschle and these senators' opposition to Bush's agenda represented a rare perspective, as Bush enjoyed approval from nearly 70 percent of the American public according to Gallup.[17] Bush had bipartisan support in Congress as well, reflected in the speedy confirmation of his Supreme Court appointee to fill Sandra Day O'Connor's vacancy, Judge Edith "Joy" Clement of the 5th Circuit.[18][19] Joy Clement was first appointed to the court of appeals by the president in 2001, and confirmed by a vote of 99-0 in the Senate.[20] Clement was considered a moderate jurist[21] who was nonetheless tough on crime,[22] offering a conservative contrast to the more liberal criminal justice jurisprudence of Chief Justice Sonia Sotomayor. Clement was confirmed as an Associate Justice by a vote of 79-21, with all 56 members of the Republican caucus joined by 23 Democrats.
A conservative caucus of Democrats also helped to prevent or dissuade the filibuster of Bush's legislative proposals during the first 100 days. The Senate thus overwhelmingly passed the Class Action Fairness Act[23], intended to reduce forum shopping for class action lawsuits, and the Protection of Lawful Commerce in Arms Act[24], which prevented gun manufacturers from being held liable for crimes committed with their weapons. This spirit of bipartisanship would soon be tested by austerity and the most audacious goal that the Bush administration set for itself and the pinnacle of the Ownership Society: the partial privatization of Social Security.
Austerity
On Feb. 24, 2009, Bush laid out the challenges he believed the cost of social programs posed to the fiscal solvency of the nation before a joint session of the United States Congress, reminiscent of a State of the Union address.
"The rising cost of entitlements is not a problem that is going away," Bush said. "Every year we fail to act, the situation gets worse. We must save Social Security."[25]
Two days after his address to Congress, Bush submitted his 2010 federal budget proposal which featured sharp cuts on non-military discretionary spending in line with the priorities laid out in his address. The budget cut Medicare spending by $40 billion over five years[26] by reducing payments to hospitals, doctors, and other providers.[27] Similarly, it cut spending on Medicaid through changing benefit and cost sharing formulas for enrollees, shifting more of the burden from the federal government to beneficiaries and state governments.[28] Finally, the budget cut $12 billion in student loan subsidies.[29] Democrats were sharply critical of the austerity measures imposed on social programs.
"George Bush calls this the ownership society, but what he really wants is a 'you're-on-your-own' society," Sen. Barack Obama (D-Ill.) said.[30]
Daschle led the Democratic caucus to unanimously oppose this budget, leading Congressional Republicans to subsume it into a bill to repeal the healthcare provisions of TRACER.
The Cut and Balance Reconciliation Act (CBRA), pronounced derisively as 'cobra' before becoming mainstream, repealed the healthcare provisions of TRACER, including the tax credits for the unemployed and small businesses to pay for health insurance premiums and retirees to purchase a health plan through the Federal Employee Health Benefits Program. Some conservative Democrats blasted this as a "Bush tax hike", as it resulted in a net increase of tax burdens to tune of $1.25 trillion over the next decade.[31] Republicans argued that it was a part of the larger tax reform effort pursued in ERMCTRA, trading a targeted and complex tax credits scheme with broader and more economically stimulating tax cuts. The bill would also require Congress to pass $1.2 trillion in ten-year discretionary spending cuts by January 2011, or automatic cuts ("sequestration") would be triggered. The bill further set a gradually decreasing cap on federal spending to 20 percent of GDP by 2019.[32]
Finally, the Cut and Balance Reconciliation Act established the National Commission on Protecting Seniors (NCPS).[33] The commission was composed equally of Republicans and Democrats appointed by the president.[34] Members included Sen. Dave Camp, former Sen. Alan Simpson, former Gov. Mark Warner, and Rep. John Spratt. The commission would recommend reforms to Social Security and hold hearings regarding the matter. The NCPR was also known as the Camp-Warner Commission, from the name of its co-chairs and to promote the image of bipartisanship by the Bush administration.
Daschle led the Democratic caucus to vote unanimously against CBRA, and the Democratic leadership as a whole preemptively opposed any cuts or changes to Social Security. When asked when the Democrats would offer their own Social Security reform proposal, House Minority Leader Nancy Pelosi responded, "Never. Does never work for you?"[35] The Democrats newfound opposition to the Ownership Society policies would make the passage of any Social Security partial privatization or reform legislation more difficult. Divisions among Republicans imperiled such efforts outright.
Social Security debate
The Bush administration's primary legislative objectives for Social Security reform were partial privatization and reducing its deficit in the long-term. The NCPS released its first report in late February along these lines. Under the NCPS plan, workers could divert up to four percent of their taxable wages going into FICA and place into private retirement accounts (PRA).[36] The retirement age would also be increased by one month every two years after the retirement age reaches 67.[37] Finally, the Cost-of-Living Adjustment (COLA) would be adjusted to "more accurately reflect" inflation over the long-term, making the program less generous.
The Chairman of the Senate Committee on Aging, Sen. Bob Corker (R-Tenn.), led the advancement of the first Social Security reform bill under the NCPS's loose guidance. Corker referred to the current Social Security scheme as "generational theft" and made an urgent case for reform.[38]
"You can't take this off the table if you want to solve our nation's fiscal issues,"[39] Corker said. "The Social Security component can be dealt with relatively painlessly if we just began to do it. But if we fail to act, it could be the undoing of our nation."[40]
The Corker-Alexander bill would gradually increase the retirement age, use chained-CPI for COLA, and establish the private retirement accounts. The Senate Aging Committee forwarded its draft bill for broader consideration of the Senate on April 25, 2009, with Corker and Sen. Lamar Alexander (R-Tenn.) being its primary champions.
"This bill will help this program to be solvent over the long haul so future seniors will have the opportunity to enjoy these benefits," Corker said.[41]
Many Senators from both parties opposed raising the retirement age and using chained-CPI for COLA or making the benefits less generous. Yielding to pressure from the White House to take action on Social Security before the summer recess, Senate Minority Leader Mitch McConnell held a floor vote on the Corker-Alexander bill. The Senate rejected the proposal by a vote of 42-58, with all of the Democratic caucus joined by 13 Republicans voting against it. Mike Huckabee and John McCain offered an alternative proposal, the Social Security Personalization Act, which would create private savings accounts but not change COLA. Deficit hawks in the House, such as Speaker John Boehner and Budget Committee Chairman Paul Ryan, were less favorable to any Social Security reform without adjustments to COLA or raising the retirement age due to its impact on the budget.
Foreign policy
As the Senate debated Social Security, as national attention would turn towards foreign affairs. On June 12, 2009, reformist Iranian President Akbar Hashemi Rafsanjani lost to conservative Mahmoud Ahmadinejad amid economic turmoil. Ahmadinejad campaigned on withdrawing from the Paris agreement with the United States and the EU-3 to restart its civilian nuclear program. Shortly after Ahmadinejad's election, Bush re-imposed economic sanctions on Iran that had been lifted under the Kerry administration. The United States joined the European Union in imposing new sanctions for not adhering to the safeguards prescribed by the International Atomic Energy Agency. [42]
"They've declared that they want to have a nuclear weapon to destroy people, some in the Middle East," Bush said. "That's unacceptable to the United States, and it's unacceptable to the world."[43]
Sen. Robert Byrd (D-W.Va.) argued that Bush was putting the nation on a road to war with Iran, "Not only does this echo the chest-pounding rhetoric which preceded the invasion of Iraq in 2002, but also raises the specter of an intensified effort to make the case for an invasion of Iran."[44]
The Bush administration's foreign policy was also scrutinized in regard to North Korea. Bilateral talks that had been initiated under the Kerry administration were terminated, and the construction of light water reactor nuclear power plans were shuttered. Bush cited a failure to comply sufficiently with IAEA inspectors in determining the regime's progress in dismantling its existing nuclear facilities. On July 4, 2009, North Korea conducted an underground detonation of a nuclear device. It had a yield of 2.35 kilotons and coincided with missile tests two months earlier.[45]
"The North Korean regime remains one of the world's leading proliferator of missile technology, including transfer to Iran and Syria," Bush said. "The United States condemns this provocative act, which constitutes a threat to international peace and security."[46]
Summer of discontent
On July 15, National Commission on Protecting Seniors released a second report with a fuller set of recommendations for Social Security. The commission suggested that instead of using chained CPI, the Cost-of-Living Adjustment could use Progressive Price Indexing (PPI).[47] PPI would constitute a larger cut than chained CPI, but the distributional impact would be more progressive, as low-income earners would have their benefits calculated according to wage indexing while high-income earners would have it calculated by price indexing.[48] Benefit reductions would increase gradually, and Social Security pay-outs would essentially flatten across all income levels instead of the wealthier receiving more.[49] Combined with the private savings accounts, maximum earners with incomes of $90,000 or more would not receive any Social Security benefits by 2075.[50]
Rep. Paul Ryan fostered the passage of the NCPS's recommendations from the House Budget Committee, with only moderate changes[51] The Urban Institute found that the Ryan bill would reduce the 75-year Social Security deficit by nearly 70 percent.[52] The House of Representatives approved the Ryan bill by a vote of 220-215 on July 31, 2009, days before the Congress moved to adjourn for summer recess.
During the recess, President Bush personally campaigned for Social Security partial privatization throughout the country.
"We must join together to strengthen and save Social Security," Bush said. "We must honor its great purposes in this new century."[53]
The president especially targeted states of red state Democrats up for re-election in 2010, hoping to pressure them into accepting the proposed reforms.[54] The Club for Growth waged a $50 million advertising campaign to persuade on-the-fence Republicans to adopt the changes and convince Americans of their merit.[55] Before this, a majority of Americans disapproved of the president's handling of Social Security. After an extensive public relations blitz throughout the country, that number soared to over 60 percent within four months. [56]
The AARP mobilized the largest opposition to the Social Security reform proposals, arguing that it would imperil the program. The AARP mobilized hundreds of thousands of phone calls to Congress and ran full page ads in over 50 daily newspapers and Capitol Hill publications in opposition to the program.
"We are dead-set against carving private accounts out of Social Security," AARP CEO Bill Novelli said.[57]
The AARP's efforts were joined by the Older Women's League (OWL) and various progressive groups, who marched on the capitol and attended town halls during the summer recess.
National Commission on Protecting Seniors (NCPS) member Alan Simpson dismissed the opposition to commission's recommended changes to Social Security.
"These gray panthers, the pink panthers, are babbling into the vapors," Simpson said. "There are people on Social Security who milk it to the last degree. We've reached a point where it's become the cow with 310 million tits."[58]
Activist groups calling themselves the "Gray Panthers" became a common sight at the increasing number of protests throughout the nation. Anti-privatization and anti-austerity protests took place in Washington D.C., New York City, and major cities throughout the country, with the largest taking place on Labor Day. Millions of protestors marched to show their opposition to the Bush administration.[59] The Labor Day protests became the largest protest in the nation since the Vietnam War, with nearly one million marchers on Washington, D.C. voicing both opposition to partial privatization and austerity, as well as discontent with the ongoing recession. A poll conducted by USA Today, CNN, and Gallup found that more than 60 percent of Americans opposed partial privatization of Social Security.[60]
Returning from the summer recess, Sen. Dave Camp (R-Mich.) released a Senate version of the Ryan bill for amendment and debate on Sept. 14, 2009. In October, hundreds of amendments were offered to the legislation, and debate over its provision drastically reducing momentum for its passage in a full floor vote. Republican Senators still criticized raising the retirement age, while offering support for the private retirement accounts. Senate Majority Leader Mitch McConnell attempted to unify the Republicans around a deadline before the 2010 State of the Union speech, as negotiations dragged into next year. The centerpiece of the Ownership Society was in peril.
Chapter 6 Notes and Bibliography
[1] Bush offers up 'ownership society'
[2] At Long Last, a Permanent Patch for a Dreaded Tax | TIME.com
[3] https://web.archive.org/web/20101211225438/http://blogs.ajc.com/jamie-dupree-washington-insider/2010/12/09/summary-of-tax-deal/
[4] 'Active financing' exemption for some businesses to cost taxpayers $9 billion
[5] Text of S. 1133 (113th): New Markets Tax Credit Extension Act of 2013 (Introduced version) - GovTrack.us
[6] https://archive.is/20130414065529/http://www.aslrra.org/legislative/Action_Alert/
[7] House Passes Tax Bill with Biofuel Incentives
[8] Tax Cut Extension Bill Wends Its Way to White House
[9]U.S. Senate: U.S. Senate Roll Call Votes 108th Congress - 1st Session
[10] Tony Knowles on Tax Reform
[11]U.S. Senate: U.S. Senate Roll Call Votes 107th Congress - 1st Session
[12] CNN.com - Daschle criticizes Bush tax cut, offers economic boost plan - January 4, 2002
[13] https://www.sun-sentinel.com/news/fl-xpm-2004-10-21-0410201322-story.html
[14] Byron Dorgan on Tax Reform
[15] Dan Mongiardo on Tax Reform
[16] CNN.com - Daschle criticizes Bush tax cut, offers economic boost plan - January 4, 2002
[17] Presidential Job Approval | The American Presidency Project
[18] https://www.washingtonpost.com/arch...5d0-b7b0-4b4a604107bb/?utm_term=.0684e806e48a
[19] https://abcnews.go.com/Politics/SupremeCourt/story?id=953790
[20] https://usatoday30.usatoday.com/news/washington/2005-10-27-list-next_x.htm
[21] https://web.archive.org/web/20060506052721/https://www.foxnews.com/story/0,2933,163025,00.html
[22] https://usatoday30.usatoday.com/news/washington/2005-10-27-list-next_x.htm
[23] https://en.wikipedia.org/wiki/Class_Action_Fairness_Act_of_2005
[24]https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_in_Arms_Act
[25] http://www.ontheissues.org/Celeb/George_W__Bush_Social_Security.htm
[26] http://www.nbcnews.com/id/11237564/ns/politics/t/bush-trims-medicaid-medicare-programs/
[27] https://web.archive.org/web/20110801061618/http://www.latimes.com/news/nationworld/nation/la-na-debt-talks-20110801,0,3461991.story
[28] https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7465.pdf
[29] http://www.nbcnews.com/id/11237564/ns/politics/t/bush-trims-medicaid-medicare-programs/
[30] https://abcnews.go.com/Politics/story?id=4536346&page=1
[31] https://www.heritage.org/health-car...r-closer-look-senator-kerrys-health-care-plan
[32] http://www.cnn.com/2011/POLITICS/07/19/debt.talks/index.html
[33] http://www.washingtonpost.com/wp-dyn/articles/A28120-2005Mar11_2.html
[34] http://www.fiscalcommission.gov/members
[35] http://archive.boston.com/news/nati...2006/11/12/social_security_at_roots_of_shift/
[36] https://web.archive.org/web/20040723221319/http://www.cbo.gov/showdoc.cfm?index=5666&sequence=0
[37]https://web.archive.org/web/20101113072530/http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/CoChair_Draft.pdf
[38] https://www.salon.com/2017/10/21/who-in-the-hell-is-bob-corker/
[39] https://www.knoxnews.com/story/opin...ore-social-security-tva-shortfalls/101294090/
[40] https://www.nashvillepublicradio.or...-lonely-mission-raise-retirement-age#stream/0
[41] https://thehill.com/homenews/senate...ate-republicans-offer-entitlement-reform-plan
[42] http://www.weeklystandard.com/the-first-100-days/article/6010
[43] http://www.washingtonpost.com/wp-dyn/content/article/2008/03/20/AR2008032002284.html
[44] http://www.washingtonpost.com/wp-dyn/content/article/2007/10/25/AR2007102502606.html
[45] http://www.bssaonline.org/content/102/2/467.abstract?sid=7c769220-2dfc-45b2-96d7-73fef9aa8d48
[46] https://georgewbush-whitehouse.archives.gov/news/releases/2006/10/20061009.html
[47] https://www.washingtonpost.com/news...ned-cpi/?noredirect=on&utm_term=.f2907110bddb
[48] https://www.cbpp.org/research/an-an...rice-indexing-to-set-social-security-benefits
[49] https://www.cbpp.org/research/progr...icantly-cut-social-security-benefits-for-many
[50] https://www.cbpp.org/research/an-an...rice-indexing-to-set-social-security-benefits
[51] https://www.cbpp.org/blog/not-so-progressive-price-indexing-is-the-wrong-fix-for-social-security
[52] https://www.urban.org/sites/default...ve-Social-Security-Reforms-Details-Matter.PDF
[53] http://www.ontheissues.org/Celeb/George_W__Bush_Social_Security.htm
[54] https://www.vox.com/policy-and-politics/2017/1/9/13781088/social-security-privatization-why-failed
[55] https://web.archive.org/web/20051101082610/http://www.alternet.org/columnists/story/20916
[56] https://www.vox.com/policy-and-politics/2017/1/9/13781088/social-security-privatization-why-failed
[57] https://www.chicagotribune.com/news/ct-xpm-2005-01-30-0501300337-story.html
[58] https://www.newsweek.com/real-problem-alan-simpsons-social-security-statements-they-are-false-213882
[59] https://www.theatlantic.com/technology/archive/2017/01/womens-march-protest-count/514166
[60] https://www.usatoday.com/news/polls/tables/live/2005-02-07-poll-results.htm#socsec
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