August 16, 2005
Poll: AARP members support personal retirement accounts
I bet you won’t hear mention of this in one of the AARP’s mendacious, anti-choice television ads:asf converter code gen
Voters age 55 and older think offering personal retirement accounts to young workers is a good idea by almost a two-to-one margin, with AARP members slightly more likely to say personal accounts are a good idea than non-AARP.
Evidently, the AARP has done a good job selling its own members on the benefits of investing, even as it discourages everyone else from “playing the slots.”asf converter code gen
Posted by Paul at 7:36 PM | Comments (0) | TrackBack asf converter code gen
July 19, 2005
And there’s more ...
According to Bench Memos, not only is Judge Michael Luttig of the Richmond-based U.S. Court of Appeals for the 4th Circuit in Washington, D.C. at this hour, but so are his children — dressed in proper attire.asf converter code gen
Like the selection of Judge Jones (see below), the selection of Judge Luttig would thrill conservatives. But while I can only speculate on the identity of the president’s choice, I’d be surprised if he’s picked a white male.asf converter code gen
We’ll know in 2 and a half hours from now. asf converter code gen
More in due course …asf converter code gen
UPDATE — Hugh Hewitt:asf converter code gen
The Texas head-fake has thrown a lot of sand in a lot of gears among the lefty blogs. Now they are in deep panic because CNN spotted Judge Luttig in D.C. in the company of his family. Heh. Building the audience for the announcement even as fear and confusion course through the opponents’ ranks. I love the timing as well, as it gives the center-right new media a head-start before the fever swamp begins emitting its gas.
The Head Moonbat concurs:asf converter code gen
Today’s big rumor of course is that Judge Edith Brown Clement is going to be Bush’s choice to replace O’Connor. If I was Bush, I’d float her name as a big red herring to distract from the actual nominee. Dems will likely be ready to pounce on Clement after the announcement. But if it’s someone else? Well, it buys Republicans some time before Dems regroup.
By the way, Tom Tancredo is today the luckiest guy in Washington. If not for the impending announcement of a Supreme Court appointment, he was set to get blog-swarmed.asf converter code gen
UPDATE (II) — For what it’s worth, Tradesports now with Judge Edith Jones way out in front. asf converter code gen
Posted by Paul at 5:16 PM | Comments (0) | TrackBack asf converter code gen
June 24, 2005
No account leadership
Vice President Cheney concedes the obvious:asf converter code gen
WASHINGTON (AP) -- Vice President Dick Cheney left open the possibility Thursday that President Bush would sign a bill to overhaul Social Security without his embattled proposal for personal accounts financed from payroll taxes.
Disappointing, isn't it?asf converter code gen
But where one door closes, another opens. Here's a proposal with the potential to promote fiscal discipline in Congress and expose Democratic hypocrisy:asf converter code gen
Republican Reps. Jim McCrery of Louisiana, Clay Shaw of Florida, Sam Johnson of Texas and Paul Ryan of Wisconsin announced they were drafting a bill that would wall off the surplus payroll tax revenues Social Security is slated to receive until 2017. They propose transforming government bonds which the government places in Parkersburg, W.Va., as the money is spent on other government programs into personal IOUs for each of the 110 million Americans who pay taxes into the program.
As the Wall Street Journal noted yesterday, "this calls the bluff of Democrats who claim to be the sole protectors of the Social Security trust fund but have done nothing to stop depleting it. Do they want to protect it or not?"asf converter code gen
Posted by Paul at 6:58 AM asf converter code gen
June 23, 2005
GOP offers plan to stop raiding surplus
Wall Street Journal:asf converter code gen
The conventional Beltway wisdom says Social Security reform is dead, thanks to near-unanimous Democratic opposition. Well, not so fast. Republican reformers are introducing a new plan to invest Social Security surplus funds into personal accounts that has the potential to shake up the debate.asf converter code genWisconsin Congressman Paul Ryan and South Carolina Senator Jim DeMint are calling for legislation to bring an immediate halt to the ongoing political raid on the surplus payroll taxes collected by Social Security. Congress now spends that cash on current programs--from cotton subsidies, to defense, to the Dr. Seuss Museum. Every day that Congress fails to act, another $200 million is spent rather than being saved for future retirement. Daniel Patrick Moynihan once called this "thievery," and if corporate America were engaged in this type of accounting fraud Eliot Spitzer would be hauling CEOs to jail.asf converter code gen
Instead of spending this retirement money, the reformers would allow individual workers to divert every surplus Social Security dollar--from now until the extra cash runs out in 2016--into personal retirement accounts. For the record, we endorsed this idea some months ago, so we're glad to see it gaining steam. Here's how it would work ...
Relatedly, the Washington Post has this report.asf converter code gen
Posted by Paul at 8:02 AM asf converter code gen
June 22, 2005
Wimping out
(Weyant cartoon; thanks to Social Security Choice.)asf converter code gen
Posted by Paul at 6:58 AM asf converter code gen
June 21, 2005
Private accounts: does Mr. Bush want them or not?
Associated Press (via Yahoo News):asf converter code gen
WASHINGTON -- President Bush encouraged a Republican senator on Tuesday to offer Social Security legislation that would not include private investment accounts. The White House said the president still was committed to allowing workers to invest part of their Social Security taxes.asf converter code genBush's nod to Utah Sen. Bob Bennett's plan comes as public polls show that most Americans do not support the president's handling of the Social Security issue.
Well of course most Americans don't support the president's handling of Social Security reform. I don't support his handling of it either, even though I support his call for personal accounts. After all, political schizophrenia is hardly commendable:asf converter code gen
"This in no way should be interpreted to mean that the president is backing off of personal accounts," White House spokesman Trent Duffy said. "He is not."
Then why signal support for legislation that doesn't include them?asf converter code gen
Posted by Paul at 5:24 PM asf converter code gen
June 20, 2005
Calculate your benefit under Bush's plan
As I wrote here, I think the fight for Social Security reform -- or at least for personal accounts -- is lost for now. But after the 2006 midterms, who knows? In the meantime, see how much Democratic obstructionism -- and Republican timidity -- may cost you.asf converter code gen
By the way, I remind my gay and lesbian readers that under the Social Security system, your companion gets nothing when you die, no matter how long the two of you have been together. But under the president's proposal, you could leave to him or her the balance of your nest egg. Wouldn't you like to do that? asf converter code gen
(Thanks to Patrick Ruffini.)asf converter code gen
(BUMPED TO TOP)asf converter code gen
Posted by Paul at 4:41 PM asf converter code gen
June 17, 2005
For now, fight for Social Security reform is lost
Ross Kaminsky at Government Bytes:asf converter code gen
The blame for the current situation lies squarely with President Bush and his advisers on Social Security who have spent far too much effort talking to people about investment returns and when this line crosses that line instead of emphasizing inheritability, choice, fairness and even the basic human dignity involved in controlling the results of one's own labor.
Thanks to Kip at A Stitch in Haste, who offers the White House "idiot-proof (and liar-proof) talking points" if ever the fight resumes.asf converter code gen
Posted by Paul at 6:59 AM asf converter code gen
May 25, 2005
The trouble with Social Security
Associated Press (via ABC News):asf converter code gen
Democrats have resisted President Bush's proposed changes to Social Security, arguing its problems are far off. The program's top analyst says they're flat wrong.asf converter code genStephen Goss, the nonpartisan chief actuary of the Social Security Administration, says the nation will face a pinch in 2009 when excess payroll taxes that have been flowing into the program start to decline, halting the growth of surplus money that Congress has been tapping to fund other government programs. asf converter code gen
It's a warning that Bush is counseling fellow Republicans to heed if they want to avoid blowback from voters.
Democrats say we face no crisis because Social Security's trust fund will keep the program solvent until 2041. But the trust fund holds only IOUs; Congress uses the Social Security surplus to pay on the Government's other obligations. What happens when the surplus dries up?asf converter code gen
Lawmakers would likely have to decide between budget cuts or tax increases that will only grow more severe each year until 2017 ...
Beginning in 2018, only thirteen years from now, Social Security will have no surplus; worse, it will begin to pay out more in benefits than it collects in taxes. That will necessitate still more spending cuts, tax increases or borrowing:asf converter code gen
"While there is no question that these securities will be redeemed when needed, as is now the case with the Medicare Trust Fund, this redemption will require the federal government to increase taxes, lower expenditures or issue publicly held debt in amounts equal to the net redemptions by the trust funds," Goss told the House Way and Means Social Security subcommittee on Tuesday.
As Ruben Navarrette Jr. puts it:asf converter code gen
Unless something is done, the current system will -- 10 or 20 years from now -- soak taxpayers with tax rates that experts say could easily top 50 percent when you combine income taxes with the payroll taxes necessary to fund Social Security and Medicare.
Blinded by nostalgia, the elderly, Mr. Navarrette writes, just don't get it. But the rest of us need to get it -- and soon.asf converter code gen
Posted by Paul at 6:20 PM asf converter code gen
May 18, 2005
450 voices for choice
Read what you're missing in the pages of the Washington Post and the New York Times.asf converter code gen
Posted by Paul at 5:00 PM asf converter code gen
May 7, 2005
"If you think that paying the Social Security tax legally entitles you to benefits, you're wrong"
Will Wilkinson, policy analyst for the Cato Institute:asf converter code gen
Social Security is a payroll tax on the one hand and a set of transfers from the government on the other. The two are connected in the way David Blaine levitates: He doesn't; they aren't; it's illusion.
You may feel that you've earned a right to Social Security benefits by paying all those taxes all those years, but all you've really got is a feeling, because the right, legally speaking, ain't there.
The case to which Mr. Wilkinson refers is Flemming v. Nestor, 363 U.S. 603 (1960), in which the U.S. Supreme Court held that to "engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act."asf converter code gen
In 2018, only 13 years from now, our pay-as-you-go Social Security system will begin to shell out more in benefits than it collects in taxes; this deficit will grow larger with each passing year. The much-ballyhooed Trust Fund, which according to Democrats guarantees the program's solvency until 2042, holds nothing but IOUs; it has no cash on hand. Consequently, in just over a decade from now, Congress will have to cut benefits, raise taxes or both. asf converter code gen
Today, the only "guarantee" enjoyed by Social Security beneficiaries is political in nature. But since politics change, you and I might ask ourselves: what if the younger voters of tomorrow are simply unwilling to bear the tax hikes that our benefits will demand of them?asf converter code gen
If we believe the Democrats, the political consensus undergirding Social Security has decades of durability to it, the prospect of sharp tax increases notwithstanding. But resting our retirement security on the hazardous assumption that others will always vote as we expect them to vote is hardly a "guarantee."asf converter code gen
Posted by Paul at 12:23 PM asf converter code gen
April 27, 2005
"Sinking feeling"
(Thanks to Cox & Forkum.)asf converter code gen
Posted by Paul at 5:45 PM asf converter code gen
April 24, 2005
"Opponents of personal accounts shy away from those issues like a vampire from the cross"
Ed Crane, president of the Cato Institute, in Opinion Journal:asf converter code gen
In addition to more control over your life through personal accounts, all the ancillary benefits of ownership should be enthusiastically played up: the pride one has in having provided for one's own retirement, as opposed to being a supplicant of the state; the security of knowing the government can't take the money away (which it does whenever it raises the payroll tax or pushes back the retirement age); and most of all, the knowledge that your loved ones may benefit from your labor. Inheritability is a hugely underexploited benefit of personal accounts. When you die, the money simply disappears. What's up with that? Which opponents of personal accounts want to debate that issue? If you want to energize the grass roots, challenge opponents of personal accounts on inheritability. Why should the money go to the government and not your loved ones?
For more on Social Security reform, see Cato's Project on Social Security Choice.asf converter code gen
Posted by Paul at 10:37 PM asf converter code gen
How to keep promises to the old without bankrupting the young?
Investor's Business Daily:asf converter code gen
As most Americans should know by now, Social Security has three workers for every retiree. As recently as the 1950s, the ratio was 17 workers per retiree. By 2030, the number shrinks by a third — to just two workers.
Two-to-one doesn't have to be so scary — not if the two workers are so highly productive that they can easily support one retiree and still have plenty left for their own uses and for saving.
That's where personal accounts come in. As now structured, Social Security is a massive disincentive for Americans to save. It's one of the reasons the U.S. personal savings rate has been hovering around a measly 1% the past couple of years.
Why save if Social Security has been promised to you? But it's much more important than that, isn't it? As any economist will tell you, there's a strong link between savings, investment and, ultimately, productivity. And productivity is what drives gains in standards of living.
We now pay about $700 billion a year to support Social Security. Much of that simply goes to the government, which borrows it, spends it and replaces it with an IOU.
Imagine the broad economic benefits if a third to a half of that amount were going into the economy.
Posted by Paul at 8:06 PM asf converter code gen
April 12, 2005
The Democrats' Social Security calculator is rigged
Imagine that.asf converter code gen
Posted by Paul at 10:50 PM asf converter code gen
April 6, 2005
Study: personal accounts could end dependence on government
And that tells you all you need to know about why the Democrats are caterwauling.asf converter code gen
Posted by Paul at 6:49 PM asf converter code gen
April 4, 2005
America wants reform
(Thanks to Patrick Ruffini.)asf converter code gen
Posted by Paul at 12:51 PM asf converter code gen
March 13, 2005
What are the Democrats thinking?
George F. Will in the Washington Post:asf converter code gen
Today the government is partially funded by that surplus of Social Security tax revenue over outlays, a fact disguised by politicians talking rot about Social Security being an "insurance" program with a "trust fund" in a "lock box." But between 2011 and 2016, Social Security outlays will exceed revenue by $32 billion, and the sums will rapidly increase during the cascading retirements of baby boomers. These sums must result in increased borrowing, or cuts of other government activities, or both.
"Starve the beast" Republicans can live with this. But what are Democrats thinking?
Posted by Paul at 1:06 PM asf converter code gen
Red, blue and rainbow: gay-friendly Social Security reform
Andrew Lee, an undergraduate student in California, in an op-ed published by the San Francisco Chronicle:asf converter code gen
If allowed to go forth, Social Security privatization will limit the ability of the government to act as arbiter of Social Security survivor benefits, and therefore recognition of beneficiaries. Up to this point, gay activists have focused on working through the judiciary and state or local governments to recognize same-sex partnerships. Although the gay community might dream of government recognition, at present this is impractical. Without sweeping federal redefinition, gays and lesbians will continue to receive unequal benefits. If they are to make the best of the situation, they should support private accounts, forming alliances with Republicans who support limited government.
Personal accounts are so obviously in the financial interests of gay and lesbian Americans, who get massively ripped-off by Social Security when their partners die, that only one thing can explain the failure of gay political groups to embrace the president's call for reform: politics over progress. For some, I guess, there must be times when nothing is quite so satisfying as slitting their own throats.asf converter code gen
Posted by Paul at 11:47 AM asf converter code gen
March 5, 2005
Why won't Democrats tell the truth about Social Security?
From the New York Times:asf converter code gen
"If we did nothing with Social Security," said Senator Harry Reid of Nevada, the Democratic leader, at a highly publicized event in New York with many leading Democrats, "Social Security would pay 100 percent of benefits for the next 50 years."
That's undeniably true, senator -- if we raise taxes, cut benefits or both. For as you well know, there's nothing but IOUs in the Social Security "Trust Fund." And when the system begins -- in 2018, which is 13 years from now, not 50 -- to pay out more than it collects, how will we make up the difference?asf converter code gen
While the president's call for private accounts won't solve the coming shortfall, neither will Democratic obfuscation of the truth.asf converter code gen
Posted by Paul at 5:30 PM asf converter code gen
Sex, lies and the derailing of Social Security reform
Sam Beard, co-chair of the Coalition for the Modernization and Protection of America's Social Security:asf converter code gen
It's important to remember that President Bill Clinton wanted Social Security reform and personal retirement accounts to be part of his legacy. As head of the nonprofit Economic Security 2000, I worked in 1998 with Erskine Bowles, the president's chief of staff, on a Social Security reform plan that included personal accounts. At the end of that year, Clinton called us to the White House and told us to be prepared for bold action. Unfortunately, the impeachment proceedings that occurred the following year derailed the initiative.
Now, President Bush is fumbling his own effort at reform while the Democrats continue to demagogue private accounts. (The "Trust Fund" isn't loaning anything to anybody, Senator Conrad. It has no money to loan.)asf converter code gen
Posted by Paul at 3:41 PM asf converter code gen
February 19, 2005
Washington Post: when world ends, poor to be "hit particularly hard"
Washington Post, on the risks of private retirement accounts:asf converter code gen
Because Social Security is often the biggest or the only source of retirement money for the poorest Americans, low-income workers would be hit particularly hard if the markets plunged and they were left with smaller benefits than they would have received under the current system.
Yes, if the markets plunge for 20 years or longer, the poor will have problems. So will we all -- and retirement security probably won't be the most pressing among them.asf converter code gen
Under any reform Congress adopts, participation in a partially privatized Social Security account is sure to be voluntary. People who believe that such accounts are unacceptably risky can remain fully invested in the current Social Security program. But I'm thinking they should make their choices and let us make ours, eh? asf converter code gen
Secondly, the privatized accounts will be made up of regulated, long-term, diversified investments:asf converter code gen
In devising a structure for the private accounts, the Bush administration is modeling its proposal after the Thrift Savings Plan, a tax-deferred retirement investment plan similar to a 401(k). The idea is to minimize risk for people at the outset by offering as few as three to five diversified investment funds.
Under the emerging Bush plan for Social Security, the default investment would be a "life cycle" account. It would begin with investments that have greater potential for both risk and reward and shift to safer bonds as a worker ages, officials in and outside the administration said.
Or, as the Heritage Foundation puts it:asf converter code gen
"Life cycle" accounts ... automatically [reduce] the proportion of stocks as the worker gets older, thus locking in past gains and sharply reducing the chance of major losses in the years approaching retirement.
Finally, opponents of PRAs assume that the current system carries no risk. But that's by no means certain. When, beginning in 2018, Social Security starts to spend more than it collects and the Government is forced to grapple with an empty "Trust Fund" -- which holds IOUs, not cash -- we're going to have cut benefits or raise taxes or both. How do we know that the voters of tomorrow will accept the sharp tax increases that'll be necessary to pay scheduled benefits?asf converter code gen
UPDATED: Additional illumination from the always sharp Kip at A Stitch in Haste. I especially enjoyed this snippet (emphasis in the original):asf converter code gen
Social Security, under DOMA, is the mostly blatantly anti-gay federal program ever conceived -- far worse than "Don't Ask, Don't Tell" (both of which, incidentally, courtesy of the Democratic pervert-president, Bill Clinton). Partnered gays are 100% screwed under the current system. If you're gay and you don't know about the Social Security spousal benefit and how it's affected by DOMA, then, with all respect, you have no idea what you're talking about. Learn the facts, and get mad. Very mad.
Posted by Paul at 10:52 AM asf converter code gen
February 18, 2005
Make it clear, Mr. President: there is no trust fund -- and the clock is against us
The Democrats are demagoguing Social Security reform, which is bad enough. But to make matters worse, says Charles Krauthammer, the president has not well-articulated the nature or urgency of the crisis:asf converter code gen
I do not know if the president's Social Security reform will pass, but if it does not, its demise will be traced to that point in the president's State of the Union address when he warned that the system would go bankrupt in 2042. It was a disastrous moment.
Let's start with basics. The Social Security system has no trust fund. No lock box. When you pay your payroll tax every year, the money is not converted into gold bars and shipped to some desert island, ready for retrieval when you turn 65. The system is pay-as-you-go. The money goes to support that year's Social Security recipients. What's left over is "loaned" to the federal Treasury. And gets entirely spent. It vanishes. In return, a piece of paper gets deposited in a vault in West Virginia saying that the left hand of the government owes money to the right hand of the government.
The truly important date, Mr. Krauthammer reminds us, is not 2042 but 2018, when the system will start to pay out more in benefits that it collects in taxes. "We now have," he writes, "13 years rather than 20 or so before the system starts bleeding red."asf converter code gen
Posted by Paul at 12:30 AM asf converter code gen
February 8, 2005
"The Right Thing To Do"
Progress for America has launched a new Social Security reform ad; it will air on CNN and Fox, but you can see it here.asf converter code gen
Posted by Paul at 4:22 PM asf converter code gen
February 7, 2005
Harry Reid: retirement security for me, but not for thee
George F. Will:asf converter code gen
Begun in 1987, the Thrift Savings Plan, which as of December 2004 had assets of $152 billion, is a retirement-savings plan open to all civilian federal employees, including senators, and all members of the uniformed services.
They can invest as much as 14 percent of their salaries in one of five retirement funds. Consider the rate of return of C Fund, one of the five. It is a common-stock fund, so it should represent the risks that [Senate minority leader Harry] Reid thinks should terrify Americans:
In only four of 17 years has the rate of return been negative. But in 11 years the rate has been greater than 10 percent, in eight years it has been greater than 20 percent, in four years it has been greater than 30 percent. The compound annual rate of return for the last 10 years has been 12 percent, and the return over the 17 years has been 12.1 percent.
Reid participates in the plan, but opposes allowing all Americans the comparable opportunity that Bush is proposing.
Posted by Paul at 7:24 AM asf converter code gen
February 6, 2005
Two visions for Social Security
Patrick Ruffini:asf converter code gen
Here we have two fundamentally different visions for Social Security: one side believes it should be a vehicle for building wealth, especially for the lower middle class service employees who typically don't have access to 401(k) plans. The other side believes it should be no more than a safety net -- and if a 75 year old is hanging off the bottom of that safety net, at $922 a month, that's social justice for you. One side is pro-wealth. The other is pro-poverty.
Is refocusing Social Security's mission on building wealth rather than distributing poverty akin to dismantling the program? It is if you think that adding a new kitchen, fixing the plumbing, and putting an addition on your 70-year old house is the same as destroying it.
By the way, if you don't have Patrick's site bookmarked, do it now.asf converter code gen
Posted by Paul at 11:57 AM asf converter code gen
February 5, 2005
Political implications of Social Security reform
For Republicans, there is a potential political payoff to Social Security reform. But that payoff rests on a substantive promise:asf converter code gen
Conservatives also cite a potential political benefit. Research suggests that support for Republican candidates and policies is higher among the roughly half of American households that own stock. Allowing younger workers to open private investment accounts in Social Security would further expand the pool of shareholders.
"If you can move from a nation where 50% of Americans own stock to a nation where 75% to 80% own stock, you could change political attitudes and the political culture in a way that's more conservative and more pro-Republican," said Stephen Moore, former president of the Club for Growth, who recently founded the advocacy group Free Enterprise Fund.
Do you image the Nation becoming more Republican as people get creamed in the market, or as they make a decent return on their investments? I freely admit that the campaign to partially privatize Social Security is also a campaign to realign the electorate. But the political goal makes sense only if you believe private accounts will work.asf converter code gen
Republicans believe they will. Democrats do too, which is why they're terrified. Liberate people from dependence on the Leviathan and you fatally undermine the Democrats' raison d'être. This is why the fight over Social Security reform will get wicked. One party's political survival is at stake.asf converter code gen
Posted by Paul at 3:15 PM asf converter code gen
February 4, 2005
Mark your calendar: three months to a better system
Want Social Security reform? Me, too. The head of the Senate Finance Committee says we have 90 days.asf converter code gen
Posted by Paul at 10:37 PM asf converter code gen
February 1, 2005
Get ready for a campaign-style battle over Social Security
Associated Press:asf converter code gen
All the tactics of a political campaign — TV ads, grass-roots organizing, town hall meetings and polling — are being tapped to influence opinion and pressure lawmakers in the explosive debate on Social Security.
Together, advocates on both sides plan to spend tens of millions of dollars, perhaps as much as $100 million, before the year is out. That's less than Social Security pays out in benefits every two hours but still a lot for a legislative campaign.
"Social Security is the kind of issue you can knock on anyone's door and talk about. It's made for campaigning," said Tom Matzzie of the liberal group MoveOn.org, which put up its first TV ads this week opposing President Bush's plan.
Republicans and their allies, including well-funded groups backed by business, are trying to build support for Bush's plan to divert some of the Social Security payroll taxes into private accounts that could be invested in stocks, bonds and the money market. Democrats and their allies, including AARP and labor unions, are trying to stop them.
Some of the money boosting the plan is coming from Wall Street firms that could make money managing the private accounts and employers who prefer such accounts to raising taxes, another option for solving Social Security's long-term financial problems.
Beyond these direct interests, the campaign's intensity reflects a deep philosophical divide over the role of government.
Indeed it does. Here's a PDF version of the ad moonbats will run tomorrow in the New York Times. Their solution? Raise taxes, of course. We just need to get " ... the wealthy paying their fair share of Social Security taxes," the moonbats say, which is a tacit admission that they view the program as just another take-from-Peter-to-pay-Paul transfer scheme.asf converter code gen
What the moonbats don't get -- or maybe they do get it and just don't care -- is that in this case, Peter is a young black man and Paul a middle or upper-middle class white one. But Peter gets it.asf converter code gen
There's a lot at stake here, both substantively and politically. The fight to reform Social Security is going to be the biggest legislative campaign of our lives. So brace yourselves. We're gonna rock.asf converter code gen
(By the way, you can see a pro-reform television ad from Progress for America here.)asf converter code gen
Posted by Paul at 6:56 PM asf converter code gen
January 28, 2005
Details of president's Social Security plan emerge
The administration is floating details of the president's plan for Social Security reform. From the Washington Post:asf converter code gen
President Bush's advisers have settled on a proposal for structuring the personal accounts they hope to create in Social Security ...
Under a plan recommended to Bush, the private accounts would resemble many company-sponsored retirement plans, with just a handful of investment options.
By default, workers would be enrolled in a "life cycle" account, in which investments become more conservative as investors age, if they do not choose one of the other options, according to two officials speaking on condition of anonymity.
Yet to be decided are several big questions, including how large the private accounts should be, how much guaranteed benefits would be cut and how to pay as much as $2 trillion needed in the first 10 years to effect the transition to a new system.
In devising a structure for the private accounts, the Bush administration is modeling its proposal after the Thrift Savings Plan, a tax-deferred retirement investment plan similar to a 401(k). The idea is to minimize risk for people at the outset by offering as few as three to five diversified investment funds.
Under the Thrift Savings Plan, federal workers have five investment options, including government and corporate bond funds, a stock fund that tracks the S&P 500, an international fund and other stock funds.
Under the emerging Bush plan for Social Security, the default investment would be a "life cycle" account. It would begin with investments that have greater potential for both risk and reward and shift to safer bonds as a worker ages, officials in and outside the administration said.
The government would be responsible for keeping track of how much money is in each worker's account and give the lump sums to a financial services company to invest, a mechanism aimed at keeping administrative fees low, they said.
That would mean only a limited profit potential for Wall Street.
[emphasis added]asf converter code gen
Posted by Paul at 5:30 PM asf converter code gen
January 18, 2005
Pulling for reform
Editorial cartoon courtesy of Cox & Forkum.asf converter code gen
Actually, Brendan Miniter makes a good case today that if Social Security reform leads to an intraparty split, it won't be among Republicans.asf converter code gen
Posted by Paul at 6:49 PM asf converter code gen
January 16, 2005
Support for private accounts highest among people in the know
The personal investment account concept garners the most support from those with $100,000 or more in household income. About 3 in 5 (61%) favor the concept of Social Security personal investment accounts compared to about one-third (35%) of those with income below $35,000.
This is just another way of saying that households with incomes above $100,000 know more about making money that households with incomes below $35,000. I'll take my financial advice from the well-to-do.asf converter code gen
The one omen: " ... support among all income groups sinks when informed of the transitional price tag."asf converter code gen
Posted by Paul at 1:44 PM asf converter code gen
January 15, 2005
One party may not survive the fight for Social Security reform
In a piece on Social Security reform, Jonathan Rauch engages in much analysis with which proponents of reform would take issue. But he's right about this:asf converter code gen
Conservatives need to frame Social Security reform as a dollars-and-cents issue, but that is not really why they are excited. What they really hope to change is not the American economy but the American psyche.
Conservatives used to speak derisively of liberal social engineering. The attempt to create private Social Security accounts is, so to speak, conservative social counter-engineering. Government should help provide for unforeseeable contingencies: tsunamis, unemployment, open-heart surgery. But if there is one event in all of human life that is wholly foreseeable, it is the advent of old age. Why, then, shouldn't people save for their own retirement, instead of relying on welfare from the government -- which is what Social Security, as currently constituted, really is?
Tanner argues that people who own assets behave differently and see their place in society in a different light. Private accounts, he says, would encourage a culture of saving and personal responsibility; they would discourage political class warfare; they may, he argues, improve work habits, and even reduce crime and other social pathologies. Create private Social Security accounts, and millions of low-income Americans will be stockholders and bondholders. Republican political activists look at the way portfolio investors vote -- and salivate at the prospect of millions more of them.
The 2004 exit polls suggested, to many conservatives, that "moral values" won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.
The drive to reform Social Security is, in part, about shoring up the system's long-term fiscal health. But more importantly, it's about providing the common man with an opportunity to accumulate real wealth and thereby altering his relationship to the Government. asf converter code gen
Democrats, who are the merchants of Government, know this, which is why they're terrified. If given the option of investing even part of your Social Security taxes in a private account, your self-sufficiency may threaten the Democrats and their dependence-inducing policies.asf converter code gen
For Democrats, the fight isn't about Social Security reform per se. It's about their political survival. Of course, a fight of this nature is not without danger for Republicans. This is why Mr. Rauch can write:asf converter code gen
The magnitude of the political risk is staggering. On Capitol Hill, many Republicans wonder if they are being led off a cliff. What does President Bush think he's doing?
What indeed? A president should never risk lightly the political health of his party. But what if ... What if he does it in the service of inspiring, history-changing ideas? What then?asf converter code gen
Battle stations, please.asf converter code gen
Posted by Paul at 4:37 PM asf converter code gen
January 12, 2005
The importance of Social Security reform to gay and lesbian Americans
Although he makes other points with which I disagree in his discussion of Social Security reform, Nick Gillespie is exactly right about this:asf converter code gen
The one powerful selling point to me about private accounts is that they might keep some money within families, to be passed down to kids or grandkids as an inheritance. I know from personal experience (or, rather, lack of personal experience) that an inheritance of even $5,000, $10,000, or $15,000 at the right time in a young person's life can make a huge difference in all sorts of ways, from clearing out debt to providing a car (and hence employment opportunities) to a down payment on a house, and more.
It seems to me the inheritance angle is the best way to sell any reform--and it should be, because that is the one that can actually change and improve people's lives, which is really the point of the reform effort.
In addition to providing better retirement security, the creation of wealth -- and the ability to pass it from one generation to the next -- is indeed an important goal of the campaign to reform Social Security.asf converter code gen
Relatedly, the transferability of private accounts is -- or at least should be -- of great interest and appeal to gay and lesbian Americans. Under the current system, a gay man who dies today can leave to his partner nothing from the years of Social Security taxes he's paid. Nothing with which to pay the mortgage. Nothing with which to make the car note. Nothing even to make his companion's life a little easier in his absence.asf converter code gen
Isn't it time we remedied that? We can with private accounts.asf converter code gen
One of the reasons I'm so passionate about reforming Social Security is that I believe a partially privatized system, with its promise of decent returns, will allow coupled gays and lesbians do what they say they want to do and care for one another. The market can do for us what the Government will not and what the culture cannot: give us a new, important and tangible way to accept responsibility for the people we love.asf converter code gen
Happily, even the liberals seem to understand this. From the New York Times:asf converter code gen
One official said the group [the Human Rights Campaign, the Nation's largest gay rights lobby] would consider supporting President Bush's efforts to privatize Social Security partly in exchange for the right of gay partners to receive benefits under the program.
Posted by Paul at 4:26 PM asf converter code gen
January 11, 2005
Social Security reform: scaring the spineless
Interested in the thoughts of a shortsighted, gutless wonder? If so, Rep. Rob Simmons, R-CT, is your man:asf converter code gen
"Why stir up a political hornet's nest . . . when there is no urgency?" said Rep. Rob Simmons (Conn.), who represents a competitive district. "When does the [Social Security] program go belly up? 2042. I will be dead by then."
Yes. But your grandchildren won't be, sir. What about them and their future? Or is it all about you and your seat in Congress?asf converter code gen
Besides, Rep. Simmons may not have as much to worry about as he evidently thinks:asf converter code gen
[President] Bush and top strategist Karl Rove, the political force behind the Social Security plan, are convinced that the politics of Social Security have changed over the past six years -- and in a direction that could help the GOP cement a durable governing majority. In public and private talks, the president and Rove contend that voters young and old realize Social Security is near financial ruin and are receptive to allowing Americans to voluntarily divert some of their payroll taxes, which are earmarked for Social Security, to private investment accounts.
There is empirical data to support their thesis. Bush touted the issue in both presidential campaigns. Dozens of House and Senate Republicans successfully did the same in the 2002 and 2004 elections.
And in any case, what's the point of having a majority in Congress if you don't use it for great things? I didn't vote Republican because I want my congressman to have a nice job. I voted Republican because I want him to translate the party's principles into public policy.asf converter code gen
We made our points. The Democrats made theirs. The people voted. We won. Now let's get busy.asf converter code gen
If it turns out that the people don't like our policies, they'll vote us out. And there's a word for that: democracy -- which means, among other things, that we might lose. But unless we put power before principle, why did we want to win in the first place?asf converter code gen
Maybe I'm just hopelessly idealistic. But I like political parties that stand for something.asf converter code gen
Posted by Paul at 3:57 PM asf converter code gen
January 9, 2005
How much money do the Democrats want to screw you out of?
Patrick Ruffini:asf converter code gen
The status quo that Democrats are so desperately defending is this: an average benefit of that's a paltry $926 a month, $11,112 a year. Seventy years of New Deal largesse, and this is the best you can do for seniors with no other retirement savings? The opportunity to make life dramatically better through significantly higher Social Security benefits lies before us, and your "solution" is simply to postpone doom?
Fiscal realities aside, that's a choice that's morally indefensible.
The advocates of reform would be well advised to get out front in this debate. Charts should be produced showing today's Social Security benefit, versus what they would be under the most conservative of personal accounts. The difference between the two is the benefit that Democrats are fighting to deny you.
To see for yourself the difference in benefit that the Democrats want to screw you out of, use this calculator developed by Texas A&M University. It shows the estimated value of your monthly Social Security check and the estimated value of your monthly retirement check if your taxes were invested in a private account of 60% stocks and 40% bonds.asf converter code gen
Here are my results.asf converter code gen
And yes, these figures are adjusted for inflation.asf converter code gen
Call your Congressman.asf converter code gen
Posted by Paul at 1:38 PM asf converter code gen
Even without a crisis, we should still reform Social Security
On Social Security, the Democrats are wrong. But even if they were right in saying that the program faces no impending crisis, we should still let younger workers put part of their taxes into private accounts. asf converter code gen
From George F. Will:asf converter code gen
"If we could wipe the slate clean, what kind of government retirement program would we build from scratch today?" In no 15-year period in the last eight decades has the growth of stocks ever been negative; in no 20-year period has the average growth been less than 3 percent, which is better than the rate of return on Social Security assets. So if we were starting with a clean slate, surely we would consider some use of the market to be prudent rather than risky.
We see next month -- never mind the next 75 years -- as through a glass darkly. But surely it is prudent to assume the need, and reasonable to rejoice in the opportunity, to restructure a program that was designed during the Depression, when there was excessive pessimism about the prospects for American capitalism and there were more than 40 workers for every retiree.
The president's plan to partially privatize Social Security -- participation in which would be unavailable to those at or near retirement and optional for those who aren't -- holds the promise of empowering the individual and reducing his dependence on the Leviathan. This threatens the Democrats' raison d'être, which is why their opposition to reform will be histrionic.asf converter code gen
Posted by Paul at 2:30 AM asf converter code gen
January 7, 2005
On Social Security reform, Mr. Bush is right
Al Neuharth writing in USA Today:asf converter code gen
On the Social Security issue, Bush is right and the AARP is wrong. Here's why:
•The Bush plan would not affect current retirees and probably not be available to those still working who are 50 or older.
•It would be strictly voluntary and simply permit younger workers to invest some (maybe up to $1,000 a year) of their Social Security payroll taxes into private retirement accounts.
•The math is not simple, but the results are staggering: $1,000 invested annually in the stock market, with its historical 10%-a-year-average return compounded, would grow to more than $440,000 in 40 years.
•A $1,000 investment every year for 50 years would balloon to more than $1.15 million.
And unlike Social Security benefits, you could leave the balance of your retirement account to your children or other loved ones. asf converter code gen
If we can overcome the demagoguery of the AARP and the Democrats and get the truth to the American people, the president will win his fight to reform Social Security.asf converter code gen
Posted by Paul at 4:47 PM asf converter code gen
January 6, 2005
Why shouldn't everybody have the same choices available to federal employees?
David Reinhard writing in the Oregonian:asf converter code gen
A market-based, worker-owned model for Social Security reform came into being in 1986. It's the Thrift Savings Plan that's part of the retirement system for federal employees. They can put their retirement savings into three funds (short-term non-marketable U.S. Treasury securities, a commercial bond index and an equity index fund). One measure of the program's success is that 86.6 percent of all federal workers participate. They're not participating because it's a bad investment.
Why shouldn't Social Security participants be able to save and invest -- and own their retirement nest egg -- in a similar way and outstrip the current Social Security's system's pathetic returns?
(Thanks to Rosenblog.)asf converter code gen
Posted by Paul at 7:52 PM asf converter code gen
January 5, 2005
Whores of fear are hypocrites, too
The AARP, which opposes Mr. Bush's plan to partially privatized Social Security, is running fear-appealing advertisements in which it compares investing in the stock market to playing slots. I noted the ads here.asf converter code gen
Well, guess what? The AARP itself enjoys a little gambling:asf converter code gen
Reading these ads, one would think that the AARP wants nothing to do with stock market investing. But the AARP is itself deeply into stocks. "The AARP makes a lot of money selling annuities and insurance products. If they think those annuities aren't being invested in the stock market, then I'd like to show them a money tree I have," Max said.
It's disgusting when people who know perfectly well how to make money want to screw little people out of the opportunity to make any of their own -- especially when the big money makers have no better motivation than holding on to their role as political power brokers.asf converter code gen
Posted by Paul at 5:48 PM asf converter code gen
January 4, 2005
As part of Social Security's overhaul, president will propose new way to calculate benefits
The Washington Post reported today that as part of his plan to reform Social Security, the president will call for indexing benefits to inflation. Benefits are now indexed to wages, which rise faster than inflation.asf converter code gen
The change would save trillions of dollars in scheduled expenditures and solve Social Security's long-term deficit, but at a cost. According to the Social Security Administration's chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would fall by more than a quarter. A retiree in 2075 would receive 54 percent of the benefit now promised.
The plan would allow workers to make up the expected loss in benefits by investing in private accounts.asf converter code gen
As you listen to the critics wail, keep this in mind:asf converter code gen
White House spokesman Trent Duffy said benefits under a revamped system should be compared with benefit levels that are possible under the current system, not benefit levels that are promised but cannot be financed. "A solution has to be compared to current law, and current law will guarantee huge tax increases or huge benefit cuts, or both," he said.
Administration officials point out that future retirees face two prospects: the amount of benefits the retirees were promised and the amount that can actually be paid.
Still unknown: how to pay the transition costs, estimated to be as high as $2 trillion. But here's a good "it's-everywhere-you-want-to-be" guess of what the president will propose.asf converter code gen
Posted by Paul at 4:45 PM asf converter code gen
January 2, 2005
AARP belies notion that wisdom and generosity of spirit come with age
The AARP, whose constituents are the most pampered and self-absorbed sector of the American electorate, is one of at least three Leviathan-loving groups that will fight the president's plan for the partial privatization of Social Security. asf converter code gen
Among other things, AARP will air a television ad in which an ill-informed couple proclaims, "If we feel like gambling, we'll play the slots."asf converter code gen
While the president won't reveal the particulars of his plan until later this month, the private investment accounts are certain to be optional and limited to younger workers. (The definition of "younger worker" is one of the particulars to be announced.) So for those who subscribe to the imbecilic belief that investing in the stock market, especially long-term, is the equivalent of playing slots and want to keep all their money in the Government's retirement system, they can. Nobody is going to force them to make (highly regulated) investments of the kind already made by federal employees.asf converter code gen
But here's a novel notion for the egocentric crowd at the AARP: it ain't all about you. You get to make your investment choices. I say again, your choices. You don't get to make them for everybody else.asf converter code gen
Posted by Paul at 1:24 PM asf converter code gen
December 22, 2004
As president prepares for Social Security reform, Democrats chart path to future electoral defeats
Reuters:asf converter code gen
President Bush will spearhead an election-style public relations campaign early next year to try to convince Americans that Social Security is in urgent need of change but will keep dollar and cent details deliberately vague, analysts and officials say.
With Bush's political capital riding on a successful overhaul of the popular retirement program, the White House and its allies plan to bombard the public with presidential speeches, television and radio ads, newspaper op-ed articles and grass-roots rallies between now and early 2005.
"It's going to be a battle royal, very much like an election campaign but over an issue rather than a candidate," said Stephen Moore, executive director of Club for Growth, a Republican group that hopes to spend $15 million on a media campaign backing the White House.
Meanwhile, opponents accuse the White House of exaggerating the issue's urgency, saying it used a similar ploy to justify the war in Iraq by citing an urgent threat from Iraqi weapons of mass destruction that have never been found.
"The administration's blitz on Social Security is eerily reminiscent of the way they made their case for war," said David Wade, spokesman for Massachusetts Sen. John Kerry, the former Democratic presidential nominee who sits on the Senate Finance Committee.
Well, at least the Democrats are consistent. Whatever the danger, whether foreign or domestic, Democrats seem constitutionally unable to distinguish the imminent from the immanent. And in both cases, they're on the losing side of history. From Business Week:asf converter code gen
"They call it a crisis. They have no plan. It sounds like Iraq," says Representative Rahm Emanuel (D-IL).
But the GOP is girding for battle, and the stakes go beyond pension reform: Conservatives see Social Security privatization as a realigning issue that will help build a vast investor class and nurture a new generation of Republicans.
Posted by Paul at 3:48 PM asf converter code gen
December 18, 2004
The Borg of Social Security: with its power at stake, keeping you assimilated is the left's mission
As the fight to reform Social Security begins, liberals are launching a counterassault. They argue that there is no impending crisis in Social Security, that the president is serving the interests of Wall Street investment firms and that the system needs only modest, technical fixes to remain solvent.asf converter code gen
But in an essay for American Prospect Online, Robert Kuttner makes it clear that the left is motivated at least as much by politics as it is by policy. The debate over Social Security reform, according to Mr. Kuttner, could provide liberals with the chance to "hand George W. Bush a rare, humiliating defeat:" asf converter code gen
... the two largest liberal “527s,” the Media Fund and America Coming Together, and their donors are casting about for a post-election role. “They put over $200 million into trying to defeat Bush,” says one activist. “Blowing away his top legislative priority would be a pretty good second best.”
Liberals, Mr. Kuttner admonishes, should offer no alternative plan of their own, and instead train all their fire on the president's proposal. For partial privatization of the largest social welfare program in the world is a major threat to not only left-wing ideology, but also to the Democrats' source of political power:asf converter code gen
Ideologically, Bush-style conservatives want everyone thinking individualistically, more like investors than citizens. Politically, if they can fragment the Democrats’ most beloved social program, they can splinter the Democrats’ voting coalition, undercutting both Social Security’s present alliance between the poor and the middle class and its intergenerational compact between the young and the old -- and thus the Democrats’ role as faithful stewards.
Translation: if Mr. Bush succeeds in promoting choice and wealth creation among the Nation's middle and working classes -- at the expense of collectivist dependence, which is the Democrats' stock-in-trade -- he will eviscerate the left.asf converter code gen
The liberals' raison d'être is to aggregate power to themselves while superintending the affairs of others. Mr. Bush's plan to privatize Social Security, albeit partially, threatens not only the liberals' understanding of the individual as drone; it also threatens an important source of the liberals' power.asf converter code gen
In the days and weeks to come, you'll hear heavy political weapons fire. It will emanate from those who draw their power from The Hive and who don't want you disconnected from it, even partially, lest you think and behave "individualistically."asf converter code gen
Posted by Paul at 2:05 PM asf converter code gen
December 16, 2004
Buy now, pay later: borrowing to finance the reform of Social Security
In a succinct piece on the partial privatization of Social Security, William Beach of the Heritage Foundation says that borrowing to finance transition costs is the way to go:asf converter code gen
The U.S. has nearly always borrowed to finance crucial changes to its economic infrastructure, and making Social Security more secure is one of the most important changes we could make. Indeed, it is fairer to secure working America's retirement by borrowing funds from wealthy Americans and foreign investors than by raising taxes on labor.
Evidently, the president agrees. He said again today that "nothing will change" for those at or near retirement and that there will be no increase in payroll taxes. If so, doesn't that leave borrowing as the only other option?asf converter code gen
Of course, even a switch to partially privatized accounts will not correct for Social Security's coming shortfall. We can expect proposals to raise the retirement age, lift the ceiling on payroll taxes and index benefits to inflation, not wages.asf converter code gen
The White House acknowledges that allowing younger workers to invest funds in private accounts would do little to help plug the shortfall.
"It will take more to solve the problem than just personal accounts," White House spokesman Scott McClellan said Wednesday. The transformation would be part of a "comprehensive solution to strengthen Social Security."
Posted by Paul at 11:57 AM asf converter code gen
December 14, 2004
Debate over reform of Social Security begins tomorrow
The three biggest domestic policy issues of our time are illegal immigration, the war on drugs and Social Security. Tomorrow, finally, a serious national debate on reform of the latter may begin. One of many key facts to keep in mind:asf converter code gen
The system uses payroll tax dollars from current workers to fund benefits for current retirees. In 1937, there were 40 workers for every retiree; by 2030, that ratio will drop to 2.1 workers per beneficiary.
We still know only the outline and none of the specifics of what the president will ultimately propose. But if he's serious about his vision of an "ownership society," meaningful reform of Social Security is the place to start.asf converter code gen
Posted by Paul at 6:12 PM asf converter code gen
December 12, 2004
True but incomplete: the LA Times reports on Social Security
In a piece touting the Democratic view that Social Security isn't really in financial trouble, the Los Angeles Times reports:asf converter code gen
For now, Social Security is taking in more through the payroll tax than it is paying out in benefits. Lots more.asf converter code gen
In 2003, income to the Social Security trust fund, including interest earned on the accumulated surplus, totaled $632 billion. Outlays, including administrative expenses, were $479 billion.
That left an annual surplus of $153 billion, or about four months worth of benefits.
At the end of the year, the trust fund had more than $1.5 trillion — more than three years' worth of benefits.
That's true. There is a surplus on the trust fund's ledger. But the surplus is in the form of IOUs from the Government, not cash on hand. And the Government has already spent the money elsewhere.asf converter code gen
These are important details, don't you think? Alas, the LA Times makes no mention of them.asf converter code gen
Posted by Paul at 11:57 AM asf converter code gen
A tax on leaving: let's see a show of hands from all who would pay to quit Social Security
The always sharp Tyler Cowen asks an intriguing question:asf converter code gen
How much could our government raise by auctioning off the right to leave the [Social Security] system?
By use of the word "auctioning," I assume that Tyler means an option open only to the highest bidders. If so, I'd ask a different question:asf converter code gen
How much could our Government raise by charging people a tax to leave the Social Security system?asf converter code gen
The answer depends, of course, on the size of the opt out tax and on the number of people willing (or able) to pay it, which Paul Goyette thinks is small:asf converter code gen
How many Americans would pay a tax up front to opt out of the most popular program in American history? Even if private accounts have a bigger payoff (which I'm not ready to concede), explaining that to people will be a pretty daunting task, since most Americans don't have a finance background.
I'm only spitballing here -- in the absence of research on the question, what else to do? -- but I think that if given a reasonable choice, at least a million or two people would opt out of Social Security. There are at least that many people in the United States for whom it would make financial sense to pay to get out. (Incidentially, I assume here that upon leaving the Government's retirement program, contributions to a private retirement account would still be compulsory.) asf converter code gen
There are 2.3 million millionaires in the United States, and many of them work. I'm thinking they'd opt out, yes? And they'd be joined by many of the hundreds of thousands of doctors, dentists, pharmacists, lawyers, architects and other well-paid professionals who either understand finance or have accountants who understand it.asf converter code gen
With an opt out tax of, say, $5,000 -- plus the prorated loss of equity in Social Security (the younger you are, the greater the loss) -- the Government would generate billions in revenue and savings with only a couple million buyers. And when you're facing transition costs of trillions for a partially privatized system -- and trillions more for doing nothing -- every little bit helps.asf converter code gen
(By the way, if you think a $5,000 tax and the prorated loss of equity sounds steep, consider the opportunity cost (i.e., what you give up) of participating in Social Security. Especially if you're young, it's huge.)asf converter code gen
Posted by Paul at 12:14 AM asf converter code gen
December 9, 2004
Gay rights lobby may help the president partially privatize Social Security
Is banging your head against the wall an effective strategy for political change? Movers and shakers in the Nation's premier gay rights organizations argue among themselves over the answer:asf converter code gen
Leaders of the gay rights movement are embroiled in a bitter and increasingly public debate over whether they should moderate their goals in the wake of bruising losses in November when 11 states approved constitutional amendments prohibiting same-sex marriages.
But here's the interesting part:asf converter code gen
The leadership of the Human Rights Campaign, at a meeting last weekend in Las Vegas, concluded that the group must bow to political reality and moderate its message and its goals. One official said the group would consider supporting President Bush's efforts to privatize Social Security partly in exchange for the right of gay partners to receive benefits under the program.
Now that's not only smart politics, it's also the kind of reform that would actually help gay and lesbian Americans without setting everyone else's hair on fire.asf converter code gen
Posted by Paul at 11:21 PM asf converter code gen
President vows no tax increase and no benefit reduction on path to reforming Social Security
If we "will not raise payroll taxes" on the Nation's workers, and if "nothing is going to change" for those already drawing benefits, then we are left with one option for financing the costs of reforming Social Security: borrow trillions.asf converter code gen
The thunderous crash you hear is the sound of our debt burying your children.asf converter code gen
Posted by Paul at 4:08 PM asf converter code gen
November 27, 2004
Third Rail: the path to reforming Social Security
In a piece that's not only informative, but also surprisingly fair and balanced, the New York Times (D-N.Y.) examines the fiscal implications of Mr. Bush's plan to partially privatize Social Security.asf converter code gen
The particulars of Social Security reform admittedly make for dry reading, which might explain the blogosphere's silence on the subject. (I searched in vain today for comment from a big blogger on the Times' article.) But the president will reportedly make Social Security reform the top item on his domestic agenda, and it's hard to imagine another issue with more import for the future of America's younger workers. The U.S. Social Security system is the largest government-run social program in the world; reforming it is a Big Deal. asf converter code gen
On the path to change, the crux of the how and why:asf converter code gen
The White House and Republicans in Congress are all but certain to embrace large-scale government borrowing to help finance President Bush's plan to create personal investment accounts in Social Security, according to administration officials, members of Congress and independent analysts.
Borrowing by the government could be necessary to establish the personal accounts because of the way Social Security pays for benefits. Under the current system, the payroll tax levied on workers goes to benefits for people who are already retired. Personal accounts would be paid for out of the same pool of money; they would allow workers to divert a portion of their payroll taxes into accounts invested in mutual funds or other investments.
The money going into the accounts would therefore no longer be available to pay benefits to current retirees. The shortfall would have to be made up somehow to preserve benefits for people who are already retired during the transition from one system to the other, and by nearly all estimates there is no way to make it up without relying at least in part on government borrowing.
A reasonable amount of borrowing now, the proponents say, would avert a much bigger financial obligation decades later. They say personal accounts would yield higher returns for individuals than the current system and could be a catalyst to broader changes that would bring the benefits promised by Social Security into line with what the system, which is also about to come under intense financial strain from the aging of the baby boom generation and the increase in life expectancies, can afford to pay.
The main Republican players in Congress on the issue say they expect to endorse an increase in borrowing to finance the transition to a new system. But they remain split over whether to back plans that would include larger investment accounts and few painful trade-offs like benefit cuts and tax increases - and therefore require more borrowing - or to limit borrowing and include more steps that would be politically unpopular.
During the election campaign, Democrats noted that the president never said how he would pay the transition costs, perhaps as high as $2 trillion, of moving from a fully government-run system to a partially privatized one. We still don't know the exact mix of tax increases, benefit cuts and borrowing upon which Mr. Bush will rely. But we do know that borrowing will figure prominently. Meanwhile, the Democrats have themselves not said how they'll pay the cost of doing nothing, the approach Mr. Kerry advocated. In a little more than a decade, Social Security will face unfunded liabilities of $26 trillion as measured in 2004 dollars. How do Democrats plan to pay that?asf converter code gen
We should have started this debate years ago. But in typical American fashion, we've waited until the last minute and now the clock is against us. If Mr. Bush can pull off meaningful Social Security reform, it will be the most important domestic legacy of his presidency.asf converter code gen
Posted by Paul at 1:05 PM asf converter code gen