I read Bush's SotU speech. He, of course, spun things to make his proposals sound reasonable, but some of them are easily refuted.

His biggest problem is he wants to do big things (Mars, Iraq, Hydrogen, No Child Left Behind, SS, Medicare Drug Benefit, "Tax Reform", etc.) but is unwilling to pay for them. He's convinced that increasing any sort of tax rate will destroy the economy and make things worse. This blindness to simple arithmetic is quite damaging.

The FICA cap made some sense when 10+ people were paying in for each retiree, when benefits weren't automatically indexed to inflation, when there weren't so many disability programs, when people didn't collect benefits for 20+ years, etc. SS needs more money because of demographics and because Congress is petrified of reducing the automatic increases that people get.

There are only a few ways to get more money: 1) Increase the number of people paying in substantially (e.g. larger families, higher immigration), 2) Increase the tax rate, 3) Increase the income subject to tax, 4) Take money from a different source. #2 is probably a non-starter for many. I suspect that 1,3,4 will be part of the solution.

I do think that something needs to be done about the system. I favor slowly increasing the cap and changing the formula for future increases. I think that private accounts are a good idea, but not as part of SS.

Bush wants to change things substantially but refuses to accept that it'll cost money to do so. He can do it for free if we increase immigration by, say, 10 M a year, but the costs will be very large. Otherwise, the money is going to have to come from taxes of some sort, not from some magical Growth Fairy.

My $0.02.

Cheers,
Scott.