• Bush’s State of the Union and Kaua‘i
Bush’s State of the Union and Kaua‘i
Reform of the Social Security system, a boost for the ethanol industry and an emotional display of support for America’s involvement in Iraq were issued that will affect Kaua‘i highlighted by President George Bush in his 2005 State of the Union speech.
The speech, broadcast here in the late afternoon Wednesday, drew mixed review broken down along party lines, with Hawai‘i Senators and Representatives on the Democratic side of the divide. Noticeable in his absence was nowretired Gen. Eric Shinseki, who is now gone as a top leader at the Pentagon; Shinseki was front and center at past speeches.
Bush warned that anyone paying into the Social Security system who is under 55 is likely to face shortfalls in payments unless serious reform action is taken. The President said a generation ago 16 workers paid into the system to provide funds for one retiree. Today ration is down to 3 to 1. By 2018 it is likely the system, if let be, will go into the red.
His solution which is being called “Voluntary Personal Retirement Accounts” aims at allowing younger workers to set aside a percentage of paychecks that now goes into payroll taxes into a personal retirement fund tied into stock and bond investments. The fund will be tightly controlled, but outside of the main Social Security bureaucracy. The funds, once earned, could be passed onto a retiree’s children.
This solution would have to rely on the lack of violability in the stock and bond markets. It would greatly increase the volume of buying in these markets.
Critics of the plan worry that such a plan would be a gamble that could create losers if our economy tanked a decade or two down the road. With no political dangers from proposing a plan that wouldn’t pan out for years down the road, one could question the bottom line of the President’s plan.
The upside is the trimming back of the Social Security bureaucracy, a chance for Americans now unable to invest in stocks and bonds to take more control of their finances and a moving away of the Social Security system from its Depressionera founding to one more in tune with the world of 21st century financial planning.
Groans and grumbles noticeable on the cable TV broadcast of Bush’s speech showed he will face opposition from the Democratic side as he wades into Social Security reform. Bipartisan support is needed for this plan to succeed. We need to see specific points of the President’s plan, and how members of both parties interpret it, before weighing judgment.
A mention of support for the ethanol industry in the United States brought a direct connection to Kaua‘i during the speech. Continued federal backing of such a plan would greatly benefit Kaua‘i’s last sugar plantation, Kaumakanibased Gay & Robinson. Bush said such support would help America become less dependent on foreign oil to fuel our economy. This bodes well for G&R’s future.
The State of the Union speech came just days after the successful election in Iraq. With millions of voters standing in the face of violence to vote, the ubiquitous blue thumb that marked voters may also mark the high point of both of Bush’s administrations. This exemplary demonstration of democracy in action was an amazing event and also the high point of his speech. The hugging of an Iraqi woman who voted in the election by the parents of a fall Marine from Texas who died during the taking of Fallujah received the longest round of applause during the speech, which was marked by many interruptions for standing ovations for the President’s speech high points.
The President’s decision to not provide a firm exit date for our armed forces now stationed in Iraq was expected, and leaves many families in Kaua‘i with still open ended expectations for the return of their loved ones. A mention of deterring nuclear arms capabilities in Iran may show our stand in the Middle East may last longer than expected.
