The LA Times’ Peter Wallsten had an interesting report today on what some claim to be one of the president’s favorite issues. The article highlights the obvious, but since it’s a good point that most of the media ignores, it deserves some attention.
Even as President Bush has started telling voters that overhauling Social Security would be a key part of his second-term agenda, he is likely to avoid offering specifics before election day, according to Bush aides, lawmakers and privatization advocates.
Instead of getting into details, which would almost certainly embroil him in controversy, Bush is campaigning on broad principles for revamping the 70-year-old retirement system in a way that fits his vision for an “ownership society,” the sources said.
Of course Bush is avoiding the details — he has no idea how to make his impossible plan work.
In 2000, Bush thought he was being bold by grabbing hold of the “third rail” and touting privatization as part of his Social Security “reform” plan. Bush refused to share specifics about how his scheme would work, insisting only that he’d champion the cause after he was elected. For reasons that have never been clear to me, reporters gave him a pass and never fully explored how Bush’s plan was literally impossible.
Now Bush is intent on doing the whole thing again — promising privatization at a low cost and without touching benefits. He’s either lying or he’s playing the public for fools, though I suppose it’s possibly both.
Bush is promising to protect existing benefits for current retirees and others who will soon retire, while holding the line on the paycheck deductions that finance Social Security. But he is reiterating his desire to let younger workers begin using for private investment some of the money they pay to the government for the program.
Purposefully left unanswered are the most divisive questions — such as what fraction of a worker’s payroll taxes could go into a private investment account instead of the Social Security trust fund, how the government would pay the estimated $1 trillion in transition costs, and how the government would protect retirees whose investments did not turn out well.
Many experts, including some conservatives, also think any meaningful privatization plan would eventually involve some combination of reduced benefits and higher worker contributions. Bush is expected to continue to skirt that issue as well.
In other words, the president wants to completely overhaul one of the most important and popular domestic policies in the country. Bush’s vague plan includes basic math that doesn’t add up. When asked how he’s going to make it work, he refuses to tell anyone, but thinks it’d be great if we just voted for him anyway and hope for the best. This may sound snarky, but I really believe this is an accurate telling of the current situation.
Social Security is a pay-as-you-go system. The people who are now paying payroll taxes are providing the benefits for those who collect Social Security checks. It’s worked this way since its inception — the working generations pay for the retired generation, knowing that when it’s their turn to retire, future working generations will pay for them.
If current workers stop paying Social Security taxes and invest that money on their own, they’re taking funding out of the system that would otherwise pay for the benefits of retirees. Unless Bush has an extra trillion dollars lying around, he can’t have younger workers take money out of the system without cutting the benefits of those receiving the checks. It’s as simple as that.
Maybe Bush could have tried to pull this off three years ago when Clinton handed him the largest surpluses in American history and a rosy economic outlook for the future. We now know, of course, that Bush chose a different path and those surpluses are gone.
The White House even created a not-so-independent commission to recommend how Bush’s plan could be implemented. The commission, whose members were hand picked by the White House, said it would cost nearly $2 trillion to make up for the money that would be removed from the system.
Bush doesn’t have the cash, doesn’t have a plan, and doesn’t have the courage to tell voters the truth. I’d be outraged if it weren’t so damn typical of this White House.
Let’s not forget, this is an issue that Bush is allegedly anxious to emphasize in this campaign. A year ago, a Bush campaign official insisted that the president will run “big time” on this issue. In June 2003, Ari Fleischer said Social Security privatization “remains a very important priority for the president.”
Only Bush would run on an issue without telling anyone what he’d do about it. It’s as if 2-1=4 and he’ll tell us why after he wins. How comforting.