"Final question covers Social Security and Medicare. Vilsack talks about balancing the budget of these programs by reindexing the program to prices, not prices and wages."
Price indexing? Yikes. Like Matt, I didn't want to leap to conclusions, so I turned on CSPAN's video of the debate and proceeded to take a shower, clean my study, and so on, until I got to the relevant part of the debate. (If anyone else wants to do this: the question is at 41 minutes into the clip; the quote below is at around 42 minutes.) Here's Vilsack's actual quote:
"First and foremost, you're going to have to take a look at the way in which Social Security is indexed. Currently, it's indexed based on wages and price; we can index it on price and still maintain the stability of Social Security and maintain the purchasing power of Social Security without necessarily jeopardizing the future of Social Security."
Darn. I didn't know much about Tom Vilsack, but he was somewhere below Chris Dodd and Bill Richardson, but above Hillary Clinton and Mike Gravel, on my list of people to consider if Obama self-destructs and Clark doesn't run. With that one paragraph, however, he has dropped to the spot right above Dennis Kucinich.
Price indexing is a very wonky concept. I tried to explain it as clearly as I could here; explanations by actual economists, with tables, are here and here. Anyone who actually knows economics should head for the latter two links; the merit of my post, if it has one, is that since I started out having no clue what price indexing was, I explain it in terms suitable for people who don't have any clue either.
While price indexing itself is a bit complicated, however, its effects are simple. It would, essentially, transform Social Security over time from a program in which people who pay more in get more out to a program in which people who earn over a given (low) amount (in the version the President seemed to favor, this was $20,000/year) all get the same benefit. Or, in short: within 80 years or so, Social Security becomes a program in which no one gets more than what the poor get today.
This is a very, very bad deal. It guts Social Security as an element of retirement security, since it makes most workers' Social Security benefits shrink dramatically, even though the taxes they pay in remain the same.
But we have ways of getting back at Tom Vilsack. Not only have I bumped him way down on my list, and not only will I link to the picture of him dressed as Winnie-the-Pooh, I'll post the picture that shows Tom Vilsack dressed as
the crocodile from Peter Pan his Social Security plan on the verge of devouring your benefits:
I wasn't going to do this -- after all, he gets into these costumes for the sake of his wife's literacy events, and I think that a willingness to look silly in a good cause is a good thing in general, and a very rare good thing among Presidential candidates -- but if he's going to go around endorsing price indexing, then the gloves are off.
UPDATE: Vilsack has responded here. Excerpt:
" am against any so-called “reform” of Social Security and Medicare that cuts, reduces, freezes or privatizes benefits. I will work with Congress so that we maintain the stability and purchasing power of Social Security and Medicare, always remembering that it is first and foremost about people.
But, I will not ignore the fact that we have a big problem before us. I will not be satisfied by letting our children and grandchildren deal with this problem. And I will not allow a solution that includes privatizing Social Security and Medicare because it exacerbates the problem. Grassroots activists throughout the country helped shine a light on the problems of Pres. Bush’s proposal. I will do everything I can as President to protect Social Security and Medicare from those who want to reduce benefits for whatever reason."
Frankly, I'm not sure I see how to square price indexing with not cutting benefits. When the campaign clarifies this, I'll post it (if I see it.)