In an "unexpected blow" to President Bush's plan to privatize Social Security, Rep. Jim McCrery (R-La.), chairman of the subcommittee that handles Social Security, insisted on 2/3/05 that the plan "must be changed in a fundamental way if it is to have a chance." Insisting on diverting payroll tax revenue to fund private accounts, McCrery said, "ensured opposition from the AARP and probably every single Democrat in the House and Senate, and that's not a good place to start." Analysis of Bush's plan so far indicates private accounts will "do nothing to solve" the system's long-term financial problems. To "'work,' privatization must generate more money for retirees than current arrangements," he said, but nothing in the president's plan would inject more capital into the economy. Stumping for his plan 2/3/05, President Bush insisted, "The math doesn't work" for the current system, but it is the president's plan that relies on fuzzy numbers.

Bush also has apparently dropped his claim that private accounts would help solve Social Security's fiscal problems, a link he made during last year's presidential campaign. A Bush aide, briefing reporters on the condition of anonymity, admitted "the individual accounts would do nothing to solve the system's long-term financial problems," the Los Angeles Times reported. The aide's admission is backed up by the details of the plan revealed so far; the Washington Post reported the plan would not "close the projected $3.7 tn gap between Social Security benefits promised over the next 75 years and taxes expected to be collected. That gap would have to be closed through benefit cuts that have yet to be detailed."

Josh Marshall tracked the results of Bush's "Bamboozlepalooza" tour at TalkingPointsMemo.com and found not only did Democrats such as Sen. Max Baucus resist Bush's blandishments in Montana on 2/4/05, but Republicans also are a hard sell as the Great Falls Tribune found that Montanans oppose privatization by a nearly 2-to-1 margin. Sen. Conrad Burns said he was "intrigued" by Bush's plan and Rep. Denny Rehberg's office told the Missoulian he had not made up his mind. Marshall noted, "[I]f I'm not mistaken Bush didn't even get the two Republicans in Montana to sign on to his plan ... This isn't about Democrats: The President Is Hunting for Republicans Who Will Go On The Record In Support of His Plan."

Marshall also noted that the Bush White House is up to its old tricks of barring known Democrats from presidential rallies. The Fargo, N.D., Forum reported that Fargo City Commissioner Linda Coates was among 42 area residents on a do-not-admit list that also included two high school students, a librarian, a Democratic campaign manager and several university professors. The White House denied any knowledge about such a list and claimed it was the work of an overzealous volunteer. Coates was admitted to the rally but the Forum reported 2/5/05 that "a worker with the White House advance team may have been the culprit."

In Florida, Rep. Ginny Brown-Waite, R-Tampa, said, "absent specifics, I'm not drinkin' that Kool-Aid. I am not gonna go down that road."

Sen. Mike DeWine, R-Ohio, one of the president's strongest supporters, backed away from a 2/2/05 statement in which he said, "I agree with the president's plan to encourage personal savings."

Rep. Jerry Moran, R-Kansas, said he opposes Bush's proposal to divert Social Security revenues into private investment accounts.

Sen. Charles Grassley (R-Iowa), Finance Committee chair, said Bush has a 90-day window to sell the public on Social Security phase-out.

Bill Gross, manager of Pimco, the world's largest bond fund, didn't help Bush when he criticized privatization. CNN/Money reported 2/4/05 that Gross called the argument about the solvency of Social Security "silly" and said it was an example of the president not focusing on more important issues, such as the budget deficit."

As of 2/7/05, Marshall's "Fainthearted Faction" of Democrats who are open to privatization included Reps. Allen Boyd (D-Fla), Robert "Bud" Cramer (D-Ala.), Collin Peterson (D-Minn.), Ike Skelton (D-Mo.) and John Tanner (D-Tenn.) and Sens. Tom Carper (D-Del.), Mary Landrieu (D-La.) and Ben Nelson (D-Neb.)

W'S MIDDLE-CLASS TAX HIKES: George Bush's $389 bn budget for domestic programs would slash Medicaid, housing for the disabled, farm and nutrition programs, small business assistance, veterans and other programs and still worsen federal deficits by $42 bn over the next five years, all to preserve tax cuts for the wealthy. More than 150 programs would be eliminated or slashed deeply, including job training for returning veterans, training programs for nurses and doctors, a program to rid drugs from schools, Amtrak subsidies, grants for cities to hire police officers and firefighters. Veterans would have to ante up $250 a year to use government healthcare and they would pay more for medication.

THE SHELL GAME: Bush's budget is fiscally irresponsible -&endash; by its own estimates, it will result in a $390 bn deficit in 2006. Worse, that figure is only arrived at through trickery. It includes over a billion dollars in revenue from drilling in the Arctic National Wildlife Refuge (ANWR), even though Congress hasn't authorized such drilling and has rejected Bush's proposal to open ANWR to oil exploration for the last four years. Budget Director Josh Bolten defended the move, claiming, "the budget is the right place to present the entirety of the president's policies, so all of his proposals are reflected in there." But the Bush budget excludes all funding for operations in Iraq and Afghanistan and the administration's $2 tn Social Security privatization package.

FARM CUTS MISS OPPORTUNITIES: Bush's proposal to lower the cap on subsidy payments to farmers misses an opportunity to address plunging agricultural commodity prices that make subsidies necessary to compensate for market and policy failures, says the Institute for Agriculture and Trade Policy (IATP). The president's budget proposes to reduce the maximum level of subsidies an individual farmer could receive to $250,000 from $360,000, but IATP President Mark Ritchie said the government could save more money and help the farm economy by taking steps to improve commodity prices, as it has in the sugar program, to cut government payments and allow farmers to get paid a fair price from the market. An analysis by the University of Tennessee's Agriculture Policy Analysis Center (APAC) concludes that a strong supply management program for major commodity programs, including the utilization of energy crops, would save taxpayers about $10 bn a year while ensuring farmers received a fair market-based income. The proposed Bush subsidy cap would only save an estimated $587 mn in 2006. See the APAC analysis at www.agpolicy.org/blueprint.html.

BUDGET SHORTCHANGES WORKING WOMEN: White House plans to shrinking budgets for work supports such as Medicaid and child care shortchange working women and their families, the Center for Economic and Policy Research (CEPR) reported. Work supports such as Medicaid and child care subsidies are crucial in enabling low-income women to remain in the labor force after leaving welfare. Welfare reform promised those on public assistance that if they went to work, they would receive help to find and keep employment. Since the early 1990s, Congress increased spending on child care subsidies and Medicaid for working families. However, CEPR economist Heather Boushey's research found that work supports are generally time-limited and phase out quickly as income rises. For the majority of working women leaving public assistance, work supports quit before mothers are able to replace health and child care needs. This limits their ability to stay employed because most mothers do not easily transition off government work supports into private-sector work supports. See www.cepr.net.

US Sen. Max Baucus (D-Mont.), ranking member of the Finance Committee, raised concerns about the proposed Medicaid cuts of $60 bn over 10 years. "This program is a lifeline to more than 50 million low-income elderly and disabled adults, parents, pregnant women and children. We need to tread very carefully here." Baucus noted that recent increases in Medicaid spending are largely due to the counter-cyclical nature of the program, as Medicaid fills in gaps in coverage for low-income and disabled Americans. From 2001 to 2003, Medicaid enrollment increased dramatically during the economic downturn, covering an additional 7.5 mn people, many of whom were dropped from employer coverage due to job loss or increased health care costs. "Medicaid has been growing because it is doing its job -&endash; providing a safety net of coverage that is there when times are tough," said Baucus.

ILLNESS BANKRUPTS MILLIONS: A Harvard study found that three-quarters of those bankrupted by illness were insured when they first got sick. The study, published 2/2/05 by the journal Health Affairs found that half of US bankruptcies, affecting 2 mn people annually, were attributable to illness or medical bills. Physicians for a National Health Program (PNHP) noted that rising health care costs, skimpier policies and the cancellation of coverage when illness causes job loss have increased the financial risk for those with insurance. This heightened risk is reflected in the 2,200% increase in medical bankruptcies since 1981.

The high rate of medical bankruptcy among the insured is due to two causes: First, many employers are cutting back coverage through larger co-payments, deductibles and exclusions. Second, the current link between coverage and employment means that insurance often evaporates when illness is so severe that breadwinners are unable to work. The COBRA law, which allows people to continue their coverage when they lose a job, has failed to address this problem because premiums for continued coverage are unaffordable (often $10,000 per year or more).

PNHP proposes national health insurance that would de-link coverage from employment, cover all medically necessary care without co-payments or deductibles and cover all Americans. Studies suggest that administrative savings from eliminating private insurance companies could fund comprehensive care for all Americans without any increase in overall health costs. (See www.pnhp.org).

DEMS SHOULD STRESS PRINCIPLES: Democrats need to stand up for working-class and middle-class principles, Democracy Corps found in a survey of 998 likely voters Jan. 16-20. The poll found 50% thought of Democrats as "not greedy," a 24-point advantage over Republicans, and 56% thought Democrats were for the middle class, a 21-point advantage over the GOP. But when asked what were the most important positive things about the Democrats (without comparison to Republicans) the respondents focused on equal rights for women, protecting the environment and helping the poor and neediest, rather than expanding opportunity for the average person." Stan Greenberg and James Carville wrote.

Voters still think of Republicans as favoring big corporations and the most privileged, but they see Democrats as without purpose and defining ideas, a party without strong leaders and direction; not the go-to party on protecting the country; ambivalent on basic values, like right and wrong and responsibility; and only marginally ahead on advocacy for people. Republicans had a 28-point advantage (55% to 27%) on "knowing what they stand for." Focus group participants talked about "too many gray issues for Democrats" and "they've got to start standing for something." That was reinforced by the GOP's depiction of John Kerry as a flip-flopper.

Top negatives for the Democrats were support for gay marriage (32%), no strong direction (30%) and support for legalized abortion (28%). Democrats had a 5-point advantage on favoring reform and change and 3-point advantages on being the party of opportunity, improving America and having new ideas for addressing the country's problems. For entire poll results, see www.democracycorps.com.

WEAKEST JOB RECOVERY: Revision of December job data upward by 161,000 jobs saved the Bush administration from the ignominy of being the first presidency since Herbert Hoover's to show a net loss of jobs over four years, but the Economic Policy Institute noted that since the start of the Bush II recession 46 months ago (March 2001), a negligible 62,000 jobs have been added in the US economy -- and those were government jobs. Private sector jobs are still down by 703,000, a contraction of 0.6%. Both represent the worst job performance since the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In the three downturns since the early 1970s, the economy had not only recovered all the jobs lost during the recession but had also generated 5.7% more jobs than existed at the start of the recession. If this historical standard had prevailed, the economy would have had a positive job gain of 7,568,000 by what is now the 46th month of recovery, or 7,502,000 more jobs than we have today. See Jobwatch.org.

BILL SUSPENDS JUDICIAL REVIEW: The US House passed Rep. James Sensenbrenner's REAL ID Act of 2005 (HR 418), which, in the name of homeland security, includes a number of items changing immigration laws, standardizing drivers' licenses and so on. It would make it easier to deport refugees back to their tormenters, the Bill of Rights Defense Committee (bordc.org) noted. Mostly overlooked is Section 102, which would empower the secretary of homeland security to suspend any and all laws in order to ensure the "expeditious" construction of barriers and roads to keep illegal immigrants out, DailyKos.com noted. It would prohibit judicial review of Homeland Security's decision to suspend any law relating to barriers or roads "in the vicinity of the United States border."

GRANNY D HOSPITALIZED: Doris "Granny D" Haddock, one of the nation's most relentless voices for campaign finance reform, underwent surgery that threatened her voice 2/4/05. Haddock, 95, who ran for the US Senate in New Hampshire last year and gained national attention by walking across the country to promote campaign finance reform, underwent surgery on her windpipe. "She is strong, and a full recovery is expected, but the long-term prospects of whether she would regain use of her well-known voice is uncertain," said family spokesman Dennis Burke, although he later updated that she expected to be fitted with a tracheotomy tube that would allow her a better chance to vocalize. "She says she will be rid of even that device in a couple of weeks so she can get back on the trail to support political reforms around the US. 'She's just amazing!" one of the nurses told us in the hall. We knew that.'" Haddock ran against Republican Sen. Judd Gregg, who defeated her 66% to 34%. Haddock and her supporters saw the race as the start of a movement of candidates don't accept special interest money. Her new website, www.Grannyslist.us, recruits and supports such candidates.

MORE DEMS SUPPORT SOCIAL SECURITY, WARN PRIVATIZERS: Birmingham, Ala., Democrats 2/5/05 approved a resolution calling on the Alabama congressional delegation to oppose the Bush administration's "attempt to destroy Social Security," the *Birmingham News* reported 2/6/05. According to the resolution, read at a luncheon meeting by Jefferson County Democratic Chairman Danny LaMunyon, the Bush administration and the right wing of the GOP have mounted a "campaign of disinformation aimed at destroying Social Security, using tactics similar to the proclamation of non-existent weapons of mass destruction preceding the Iraqi war."

Other Democratic groups have adopted a resolution to cut off from financial support any Democratic candidate "who expresses support, advocates for, or votes for ... any effort to phase out and/or replace Social Security, in whole or in part, in favor of a private accounts-based system." The resolution, which started with the Democratic Party of the San Fernando Valley, Calif. (dpsfv.com) has been adopted by the Democratic Club of Johnson County, Mo.; Democratic Club of Central Orange County; Los Angeles County Democratic Party; the Sumner County, Kan., Democratic Central Committee; and two bodies of the Democratic-Farmer-Labor Party in Minnesota.

RIGHT ATTACKS PUBLIC PENSIONS: California Gov. Arnold Schwarzenegger has joined the right wingers who want to get rid of public pensions. Phil Angelides, California state treasurer, wrote in the 2/7/05 Los Angeles Times that the governor's real agenda is part of "a national attack on the pension funds that have stood up for corporate reform and the interests of ordinary families and investors hurt by the recent wave of corporate scandal." Schwarzenegger has proposed replacing government pension plans that cover 2 million teachers, police officers and other public servants with individual 401(k)-style private accounts. Angelides noted that California Public Employees' Retirement System and the California State Teachers' Retirement System have stood up for the rights of ordinary investors against rampant corporate abuses. "That's why the governor and his right-wing ideologues have targeted the pension funds: not because the funds have strayed, but because they are leading the fight on behalf of ordinary shareholders to put transparency and accountability back into American capitalism."

KINKY CANDIDATE: "We're gypsies on a pirate ship and we're sailing to the Governor's Mansion," Texas singer/novelist/stray pet rescuer Kinky Friedman 2/3/05 proclaimed as he kicked off his independent candidacy for governor in a news conference in front of the Alamo in San Antonio. Friedman, whose political career includes an unsuccessful 1986 run for Kerr County justice of the peace but whose musical career featured classics such as "They Ain't Making Jews Like Jesus Any More," and "Get Your Biscuits in the Oven and Your Buns in the Bed," said voters should not worry about his lack of electoral experience. "Trust me. I'm a Jew. I'll hire good people." He added, "I'm not anti-death penalty. I'm anti-the wrong guy getting executed," Friedman said. "Two-thousand years ago we executed an innocent man named Jesus Christ and we don't want to make another mistake like that." Friedman said teachers, police officers and firefighters have been left behind in a state that is first in the nation in executions and trailing in education funding. He supports the legalization of medical marijuana and wants to increase public school funding through casino gambling. He also wants a return of nondenominational prayer in school. "What's wrong with a kid believing in something?" he asked.

CONVICTED LIAR GETS WHITE HOUSE POST: Elliott Abrams, who pleaded guilty in 1991 to withholding information from Congress in the Iran-contra scandal, was promoted to deputy national security adviser to George W. Bush. Abrams, who previously was in charge of Middle East affairs, will be responsible for pushing Bush's strategy for advancing democracy, the Washington Post reported 2/3/05. On Oct. 10, 1986, Abrams, then a State Department employee, testified before the Senate Foreign Relations Committee that he did not know that Marine Lt. Col. Oliver North was directing illegal arms sales to Iran and diverting the proceeds to assist the Nicaraguan contras. Abrams was pardoned by Bush's father, President George H.W. Bush.

BUSH: SS CRISIS NEWS TO HIM: In Tampa, Fla., after 27-year old Jim Browne of St. Petersburg said, "Many of my generation do not anticipate Social Security being there," Bush answered, "When I was 27 years old, I don't remember anybody talking about whether the system is going to be there," the Palm Beach Post reported 2/5/05. But Josh Marshall noted that in 1978, when Bush was 32, he ran for Congress on some of the same ideas he promotes today: He supported a 33-1/3% tax cut, he predicted Social Security would go broke in 10 years and he said the system should give people "the chance to invest money the way they feel" is best, according to an article in *USA Today*.

GOP SEEKS TO CURB SOCIAL SECURITY CRITICS: The Republican National Committee has sent letters to local TV stations in Indiana asking them not to air an ad from MoveOn.org that is critical of George W. Bush's plan to privatize Social Security benefits, the South Bend, Ind., Tribune reported 2/7/05. The RNC claimed the ad "falsely and maliciously makes reference to 'George Bush's planned Social Security benefit cuts of up to 46 percent to pay for private accounts ..." Some TV station managers took a threatening tone from the letter. Tom Matzzie, Washington, D.C., director of MoveOn.org, told the South Bend, Ind., Tribune that the information is based on an analysis performed by the chief actuary at the Social Security Administration, and said his organization stands by the ad. "Instead of threatening TV stations and trying to infringe on the free-speech rights of MoveOn.org," said Matzzie, the administration should "come clean" and explain how big benefit cuts will be for future retirees, how much new debt will be required and how much financial services corporations will profit from the proposal.

Josh Marshall of TalkingPointsMemo.com noted that the reference to benefit cuts of up to 46% refers to the president's widely-reported intention of shifting from wage-indexing to inflation-indexing for future benefits. "This is true," he said.

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