The Scum at the Top
Commentary on the Rats in Washington
More secure than Bush is saying
By Dave Hage
StarTribune
© January 16, 2005
Page AA5
I woke up the other morning to hear a BBC Radio reporter discussing
President Bush and America's "bankrupt Social Security program."
And I thought: Oh no, the plan is working.
The plan, of course, is a White House strategy to push private retirement
accounts by convincing Americans that Social Security is on the brink
of collapse.
"If you're 20 years old, or in your mid-20s, and you're beginning to
work, I want you to think about a Social Security system that will be
flat bust, bankrupt, unless the United States Congress has got the
willingness to act now," President Bush told an audience in Washington
last Tuesday.
He wasn't improvising. Last week the Associated Press obtained an
internal White House memo arguing that Congress will never adopt the
president's plan for private retirement accounts unless Bush can
convince voters that Social Security is "heading toward an iceberg."
The dangers facing Social Security must be "seared into the public
consciousness," the memo said.
Scare tactics like this worked three years ago, when the administration
was trying to sell voters on a preemptive war in Iraq. That's because
most Americans simply didn't have the facts to evaluate Bush's claims
about Saddam Hussein.
With Social Security, however, we have very good information and it
completely contradicts the White House crisis scenario. Social
Security is running very large surpluses at the moment and it will
have enough money to pay full benefits until the year 2042. By then
the median baby boomer will be 20 years into retirement. After that,
it will still have funds to pay about 70 percent of promised benefits.
This isn't liberal propaganda. It's from the annual report of the
Social Security trustees, several of them Bush appointees. The Congressional
Budget Office (CBO), a nonpartisan and trusted forecasting agency, says
Social Security will be able to pay more like 80 percent of promised
benefits long after 2050.
This is not a system that will be "flat broke" when today's 20-somethings
retire.
To be fair, there is a grain of truth at the heart of the president's
argument. As baby boomers reach their 60s, the number of younger
workers supporting each retiree will dwindle rapidly. After 2042 or
so, Social Security will face a solvency gap.
But the president surely knows two things. First, his plan allowing
workers to divert Social Security taxes into personal retirement
accounts wouldn't fix that problem; it would accelerate the date of
Social Security's insolvency. Second, respected experts all over
Washington have proposed workable plans to close the solvency gap.
Robert Ball, a former Social Security commissioner, has devised one
plan, and Rep. David Obey, D-Wis., has introduced it in Congress.
Robert Reischauer, a former CBO director, and Henry Aaron, a respected
labor economist, have proposed another. Both would involve modest
sacrifices by working baby boomers, but I don't see why we're not
up to the task. Especially when the White House alternative is to
borrow $2 trillion and shift the whole problem to future generations.
What's infuriating about the Bush strategy is that it exploits two
great American character flaws, cynicism and greed.
Since the 1980s or so, Americans have come to believe that government
can't do anything right. But Social Security has been a huge success.
Between 1959 and 2000, it cut the poverty rate of elderly Americans by
more than two-thirds, from 35 percent to 10 percent. When it needed
mid-course corrections, in 1977 and 1983, Congress made them.
Americans also love the idea of controlling their own money and building
their own retirement accounts. But that's exactly what they do today.
The number of workers with 401(k)s has tripled over the last two decades,
to 45 million, and Americans derive two-thirds of their retirement
income from private pensions and savings. Social Security is just the
third leg of the stool -- the insurance leg that retirees can depend
on if everything else goes wrong.
"Most younger people in America think they'll never see a dime from
Social Security," Bush told another audience recently.
Well, fine. But Congress shouldn't dismantle a program that serves
45 million Americans because of what young people think, especially
when those young people have their facts wrong. And the president
shouldn't use his bully pulpit to reinforce those misconceptions.
Dave Hage is a Star Tribune editorial writer.
He is at dhage@startribune.com.
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January 15, 2007