May 04, 2005

Buffett on Social Security

Warren Buffett was on Lou Dobbs tonight and he had this to say about Social Security, and the discussion touched briefly on the recent bankruptcy bill (which might have an ill-conceived sequel) and the Estate Tax, emphasis mine:

DOBBS: Are you surprised when you focus on the two deficits we just talked about, the trade deficit, and the budget deficit? The budget deficit is 3.6 percent of our GDP. The trade deficit is reaching just almost 6 percent of GDP. And the president is talking about reforming Social Security. Does that surprise you?

BUFFETT: Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400 plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter room looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me.

DOBBS: In point of fact, the Congressional Budget Office which is considered to be the bipartisan objective standard of such things. And its research suggests that that deficit in Social Security would be only .4 percent of our GDP over 75 years as compared to the other large deficits percentages that associated with trade in the budget deficit. Do you have -- we're talking about fixing the fixes we're in, a quick answer for Social Security?

BUFFETT: I think -- I personally would increase the taxable base above the present 90,000. I pay very little in the way of Social Security taxes because I make a lot more than 90,000. And the people in my office pay the full tax. I would -- we're already edging up the retirement age a bit. And I would means test -- I get a check for $1700 or $1900 or something every month. I'm 74. And I cash it. But I'll eat without it.

DOBBS: You will eat without it. So will literally more than a million other Americans, as well. Means testing, the idea of raising taxes, the payroll tax. In 1983, Alan Greenspan, the fed chairman, he had a very simple idea. Raise taxes, that's what you're saying here.

BUFFETT: Sure. But I wouldn't raise the 12 point and a fraction, I would raise the base. From above $90,000.

DOBBS: That's a progressive idea. In other words, the rich people would pay more?

BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good.

DOBBS: What a radical idea.

BUFFETT: It's class warfare, my class is winning, but they shouldn't be.

DOBBS: Exactly. Your class as you put it, in point of fact is winning on estate taxes, which I know you are opposed to. I don't know how your son Howard feels about that. I know you are opposed to it.

At the same week the House passed the estate tax, Congress passed the bankruptcy legislation which they had the temerity to call bankruptcy reform -- Democrats and Republicans passing this legislation. Which is onerous to the middle class. Half of the bankruptcies in this country take place, because people fall ill, serious illnesses result in bankruptcy. Nearly half of the people involved. How do you -- you have watched a lot of politics. What is going on in this country?

BUFFETT: The rich are winning. Just take the estate tax, less than 2 percent of all estates pay any tax. A couple million people die every year, 40,000 or so estates get taxed.

We raise, what, $30 billion from the estate tax. And, you know, I would like to hear the Congressman say who they are going to get the $30 billion from if they don't get it from the estate tax. It's nice to say, you know, wipe out this tax, but we're running a huge deficit, so who does the $30 billion come from? ...

As mentioned recently in the Omaha World-Herald via Armando's diary on dKos, Buffett called the Bush plan a "mistake." This bit from the article was also interesting, citing the views of Buffett's business partner Charlie Munger:

... Munger, who called himself a "right-wing Republican," said, "Republicans are out of their cotton-picking minds to be taking on this issue now." Munger cited nuclear tensions with North Korea and Iran as issues the administration should be working on instead of "wasting its good will over some twaddle." ...

Today on the floor of the House (are you getting the idea that I had C-SPAN on longer than a person should?), Rep Tim Ryan (D-OH) noted that 5.3 million children live in households that get Social Security survivor benefits. He also said that every child born in the U.S. has a more than $26K share of the country's rising $7.8 trillion debt. Adding to that debt, he noted that the Bush plan would cost $1.4 trillion extra in its first 10 years.

Rep. Kendrick Meek (D-FL) suggested dealing with the country's crises in order of importance, noting that the healthcare crisis was of much greater concern to typical citizens and business owners. He said that Republicans point to government employee savings plans and say that they want the public to "have what they have," ignoring the fact that all government employees including members of congress also have healthcare and Social Security to go along with those plans.

Rep. Meek encouraged viewers to take a look at the work of the Center on Budget and Policy Priorities, and Rep. Ryan recommended visiting the House Democratic Leader's site where the "30 Something" working group has been focusing on Social Security lately.

To reiterate, the Republican plan is to steal from the poor by skimming off the Social Security system that allows them to have a guaranteed safety net after a lifetime of hard work, using the proceeds to pay for tax cuts for the wealthy, and passing enormous amounts of debt to future generations. In other words, if you aren't Paris Hilton, they're out to rip off your grandparents, you, and all your future offspring. It's a good plan if you were born with a trust fund, are able to go to college on a full ride scholarship, or no one in your family ever gets sick.

The Democratic plan is to pay down the deficit, keep more jobs in the country, and use the ensuing fiscal bounty to support everybody who plays by the rules with education, healthcare, unemployment security, a good climate to find work or start a business in, and a guaranteed minimum pension in retirement. It's a good plan under which the whole country prospers, and it doesn't need to be changed, just more agressively promoted.

Posted by natasha at May 4, 2005 11:24 PM | US Politics | Technorati links |

Natasha: Thanks for the partial transcript as I never watch Dobbs (tho he makes some good points here, not as well as Buffett!)...

You are right about the R plan but you negate to mention that certain Ds continue to be complicit in the deal. Take Oregon's own Rep. Darlene Hooley, who voted for BOTH the bankruptcy bill and the repeal of the estate tax. Nobody in the OR D party or elsewhere seems to be calling her out for this, but we should be.

It's hard enough when the Ds are the minority in Congress. It gets even worse when they are constantly sold out by one of their own.

(and for those of you who know who I, I am not planning to run against her again - just looking to back someone who will!)

Posted by: activist kaza at May 5, 2005 06:39 AM

" just more agressively promoted "

It needs to be said every day on TV and/or radio by at least one Congressional Democrat.

Posted by: PhilW at May 6, 2005 06:01 PM

We've been on this runaway train for about 4 years now. Eventually it's going to wreck. Everything will be a mess, and both Ds and Rs are to blame. Better yet, we are to blame. We allowed ourselves to be blinded by greed and fear. You know we're in trouble when security (defense), and security (defense) related products by way of government spending is the bread and butter of this economy. I just pray that this wreck does not result in total economic and social chaos in this country when it happens.

One way to stop us militarily is to make it so that we cannot afford one.

Posted by: Donald at May 6, 2005 10:25 PM

social security number must have all USA citizen IMHO

Posted by: bob zaraon at May 10, 2005 06:10 AM

social security number must have all USA citizen IMHO

Posted by: bob zaraon at May 10, 2005 06:10 AM