I enjoy political theater as much as the next guy, and the pomp and circumstance of a State of the Union is a great annual fix for grandeur. Bush’s speech last night was even topped by one of the more touching and emotional moments one will ever see in such an address.
But as soon as the speech was over, it was obvious that none of the political circumstances has changed. This year’s State of the Union was, at its root, the president’s chance to kick his initiative to privatize Social Security into gear. Instead, it stalled.
It was the same old, unpersuasive pitch on a bigger scale. Supporters of Social Security still see Bush’s plan for the deceptive scheme it is; Bush simply offered more reasons to reject his dishonest sales pitch.
“The [Social Security] system, however, on its current path, is headed toward bankruptcy…. By the year 2042, the entire system would be exhausted and bankrupt.”
We’re back to the “bankrupt” nonsense? Hasn’t this been debunked often enough for the White House?
The answer, of course, is no, because the Bush gang is counting on fudging their way through this debate. They really don’t have a choice — an open discussion based on facts won’t get them where they want to go.
It led to a sales pitch that told slightly less than half the story. That’s not entirely unexpected, of course. No one seriously expects this president, or any president for that matter, to highlight the flaws and downsides of their own policy initiatives.
The problem is, however, that there are some pesky details that the public will learn of, which will have sweeping political repercussions. Bush may not want to talk about these irritating questions — such as, “Mr. President, how do you propose we pay for all of this?” — but the questions won’t just go away.
The president did not say what benefit reductions he favored. The official who briefed reporters spoke only of unspecified “benefit offsets” and did not say what the cuts would entail or how large they would be.
The president did not address the cost to the government of paying full benefits to retirees for decades while tax money was being diverted into private accounts. Nor did he say how much this would increase the annual budget deficit.
There was no mention of what would happen to workers who become disabled, currently 16 percent of Social Security beneficiaries, or the minor children of workers who die, now 7 percent of beneficiaries. People who stop working or die young would obviously have much less in their retirement accounts than those who worked until retirement age. Nor was there discussion of whether spouses would have access to the private accounts or what would happen in the case of divorce.
No one in the administration mentioned how workers who retired when the market was in a slump would be protected financially.
Yeah, but other than that he was really forthcoming.
Then there was the small matter of ignoring the elephant in the room, so to speak. Bush emphasized challenges to Social Security’s long-term fiscal health, but failed to mention that his plan does literally nothing to help address the problem.
[S]enior White House officials acknowledged that private accounts would do nothing to keep the giant retirement system solvent.
Indeed, some independent analysts said the private accounts would make the problems much worse by siphoning tax revenue away from the system and adding hundreds of billions of dollars in transition costs.
And, finally, there’s the “ownership society” without the “ownership.”
Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.
The mechanism, detailed by a senior administration official before President Bush’s State of the Union address, would hold down the cost of Bush’s plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement.
No wonder Bush has been cagey for so long about details. The more we hear about the White House plan, the worse it sounds.