A Washington Post poll on Social Security this week offered Dems yet another hint about how best to criticize the White House scheme: the public doesn’t much care for sticker shock.
[L]ike nearly half of those surveyed, [Jerry Traylor, 58, a retired government worker who lives in Newell, Ala.] wrongly believed that the costs of creating personal accounts would be negligible. Told that the Bush administration estimates the government initially would have to borrow more than $700 billion to set up such a system, he was incredulous. “That seems very excessive,” Traylor said. “I would be less inclined to favor it if it costs that much. That much money could serve a lot of good purposes.”
The data bore this out in great detail. People generally don’t understand that Bush’s plan is exorbitantly expensive. When asked if they like the idea of private accounts, people tend to say yes. When told about the costs, more than half of those who approve of Bush’s tack in general switch from support to opposition. Cost, in other words, may ultimately be Bush’s biggest political problem.
But here’s the funny part: the $700 billion figure is a wild exaggeration — in Bush’s favor. The fact that the public is balking at $700 billion should cause something of a panic at the White House because the actual price tag is several times this figure.
As Harry Reid’s office noted this morning, the Center on Budget and Policy Priorities has calculated a 20-year cost for Bush’s scheme that is seven times higher than the number used in the Post poll.
* Claimed $750 Billion Estimate Makes Borrowing Costs Look Much Lower Than They Actually Would Be.
The senior official said the borrowing costs over the first ten years — 2006-2015 — would be $664 billion without interest costs, and $754 billion when interest costs on the debt are included.
These figures are misleadingly low. They are generated by using a ten-year budget window (2006-2015) that includes only five years of the fully phased-in plan. The plan would not be launched until 2009 and not be in full effect until 2011.
Over the first ten years that the plan actually was in effect (2009-18), it would add about $1.4 trillion to the debt. Over the next ten years (2019- 28), it would add about $3.5 trillion more to the debt. All told, the plan would add $4.9 trillion (14 percent of GDP in 2028) to the debt over its first 20 years.
Even rank-and-file Republicans are balking when told the Bush plan would cost $700 billion. Any guess how they’d react if told it could cost as much as $5 trillion — and Bush has no way to pay for it?