February 08, 2006
Misunderestimated again
President Bush is several steps ahead of the Democrats, again, this time on the Social Security reform they killed last year. Reports Newsweek (someone oughtta fact check this):
this year, with no fanfare whatsoever, Bush stuck a big Social Security privatization plan in the federal budget proposal, which he sent to Congress on Monday.
His plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years.
...anyone who thought that Bush would wait for bipartisanship to deal with Social Security was wrong. Instead, he stuck his own privatization proposals into his proposed budget.
Posted by bill at 02:51 PM | Comments (0) | TrackBack
August 01, 2005
All Dead
In a piece that I largely agree with, Kevin Hassett offers a concise and reasonably even-handed analysis of why Social Security reform died this year. I absolutely agree that President Bush made serious tactical mistakes in the way he pushed forward his reform principles. I also agree with the idea that the Democratic Party has been economically radicalized of late. But I think Hassett misses a key point. Bush failed to get the overwhelming backing of voters that would have given squemish legislators the necessary degree of comfort to grab hold of the third rail of politics. Yes, this failure had a partisan component, but there was also a good deal of bi-partisan cowardice in evidence.
Posted by Audi Partem Alteram at 03:05 AM | Comments (0) | TrackBack
July 06, 2005
New Life to a Sputtering Debate
Will Wilkinson, in a recent paper for the Cato Institute, seeks to explode the positions adopted by those on the Left and in so doing break the rhetorical stalemate surrounding the crucial issue of Social Security reform. Prior to reading this piece, it had been awhile since I'd come across anything of interest surrounding the issue of Social Security reform. The basic positions were staked out months ago, and for all the talk, very little has changed.
Wilkinson, like a judo player determined to win a deadlocked match with a breath-taking offensive explosion, attempts in this paper to justify a reformed Social Security system featuring private accounts on traditional liberal grounds. I think this piece fails on a number of levels, namely in trying to accomplish too much, but it is nevertheless an entertaining read and hopefully a harbinger of a resurgent dynamism in the reform debate.
Posted by Audi Partem Alteram at 01:35 AM | Comments (0) | TrackBack
June 23, 2005
Bennett Plan + DeMint/Ryan Idea = Good Social Security Plan
Senator Jim DeMint and Congressman Jack Ryan have just put forward a plan to stop the raid on the Social Security surplus by diverting payroll tax dollars that are not spent into individual accounts, in the form of Treasury bonds.
The Wall Street Journal approves, and hints at how the politics will play out.
Wisconsin 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.
You tell 'em! But while the WSJ is taking a moment to highlight the ongoing absurdity of the Social Security program's structure, USA Today gives a more balanced update.
The plan has one distinct virtue. It would prevent that money from being used to fund other areas of government, a long-standing practice used to partially mask grossly irresponsible deficit spending.But for every one part substance, the plan contains nine parts gimmick...
Perhaps its most troubling aspect, however, is that it's being sold as something different from what its authors hope it will become. Creating private accounts only to shut off their funding after a decade, just when the surplus becomes a deficit, makes little sense.
Okay, point taken. But there's another plan on the table: the Bennett Plan. Pardon the source of the quote, but here's the NYT:
[Bush] gave tepid approval to a proposal by Robert Bennett, the stalwart conservative senator from Utah, to restore the system's solvency in a way that would not include private accounts... Mr. Bennett's plan includes drastic and unnecessarily large cuts in Social Security benefits, but at least he is being straightforward in offering a plan that addresses the real problem Americans want solved.
This is a highly misleading description, because 1) there are no benefit cuts, merely a cut in the growth rate of benefits, 2) the NYT, usually keen on class warfare, neglects to mention that the reduced benefit growth rate will apply only to the better-off (including the middle class, but the poor will be protected), and 3) the cuts are by no means "unnecessarily large," but actually (I think) fall somewhat short of restoring solvency, though they're still a huge step in the right direction.
But in addition to restoring solvency, the Bennett Plan would increase the Social Security surplus over time, by reducing scheduled benefits without reducing payroll tax receipts.
And if the surplus were channeled into individual accounts, a larger surplus just means larger individual accounts.
Brilliant! Now let's hope it passes.
Posted by Good Samaritan at 08:15 AM | Comments (0) | TrackBack
June 11, 2005
Stop Drawing Lines in the Sand
Partisans talk about drawing lines in the sand on certain issues as if it's a good thing. But it rarely is. Conservative groups have so narrowed the range of acceptable options for Social Security reform that they may well bear responsibility if Congress does not pass a Social Security bill this year (see article). One frustrated (Republican) Senate aide recently opined: "We should have no conditions before we start talking", and "If you start narrowing the ideas, there's nothing left to negotiate." Representative Clay Shaw (R-Fla.), is blunt in his criticism of hard-line ideologues: "They don't understand that politics is the art of compromise".
Politics is also about governing, not maintaining ideological purity.
Posted by Audi Partem Alteram at 03:20 AM | Comments (0) | TrackBack
June 10, 2005
Doubt and the Limitations of Power
Pundits, voters and legislators are sending increasingly strong signals that Social Security reform will not go forward unless private accounts are taken off the table. Protestations about the rightness of private accounts or the duplicity of Democratic legislators is wasteful. There is a growing chorus, much of it on the Right, stating that Social Security reform as President Bush has defined it will not happen any time soon.
Solidly pro-Bush pundits are giving voice to their frustration with the lack of progress toward reform, and some are questioning whether the Republican Party has not gotten too far ahead of public opinion on this issue. Venting his frustration at President Bush's ambitious attempt to reform Social Security, Andrew Ferguson observes: "The difficulties he has encountered in persuading the public to go along with him might strike a prudent man as a warning that he's pushing things a little too far. But prudence--like caution, diffidence, a sense of limits--was a quality that distinguished yesterday's conservatism, not today's." Larry Kudlow notes: "The potential for high-minded policy reforms to fix entitlements and spur growth and prosperity has degenerated into a hopeless morass of name-calling, scandal-mongering, political-bludgeoning, and relationship-breaking". Kudlow goes on to ask: "Is the White House and its congressional allies selling policy reforms that voters simply are not buying?" These pundits have been realistic enough to acknowledge the inherent limitation of politics: the more significant the change to be undertaken, the more broad-based the support that will be needed. Recognizing that the support is not there, they council reflection, and perhaps a reevaluation of goals.
This is usually the point at which my critics on this site will jump up and down and scream for numbers, and so we move on to the voters. A Washington Post-ABC News poll taken from June 2 – June 5 reveals the degree to which the Social Security issue has been adequately communicated to voters, and what they think of the issue (there were 1002 respondents to the survey, 30% identified themselves as Democrats, 31% as Republicans and 34% as Independents). Asked “Do you approve or disapprove of the way Bush is handling Social Security?” 34% approved, while 62% disapproved. The approval rate for this question represents a 12 point drop from the results of a June 3, 2001 survey, and the disapproval rate represents a 22 point increase from the same survey (the percentage of those with no opinion fell from 14% for the June 2001 survey to 4% for the June 2005 survey). Asked “Based on what you know about Bush’s proposals, do you think they would or would not improve the long-term financial stability of the Social Security system?” 32% responded that Bush’s proposals would improve the financial stability of Social Security, while 63% responded that they would not. Those who hope that the public will blame Democrats for the lack of progress on solving the nation’s problems should consider that 67% of respondents consider Republicans to blame for a lack of progress on those problems, with only 13% blaming Democrats and 17% blaming both parties equally. In short, despite the exhaustive efforts of President Bush and many Republican lawmakers, the public is not with them on this issue.
Republican legislators have been grappling unsuccessfully with the issue of Social Security reform. Two senior Republicans on the Finance Committee have adopted a more pragmatic approach to Social Security reform. Senator Charles Grassley, Chairman of the Senate Finance Committee, has stated a preference to work on the issue of solvency before addressing private accounts. Senator Orrin Hatch, the second-ranking Republican on the Finance committee, has said of legislation including private accounts: "I don't think we're going to get it", and "We can't get even one Democrat, and some Republicans won't go along either." Senator Olympia Snowe, a Republican who has been openly critical of Social Security reform, has said this on the subject: "Social Security became the bedrock of support for seniors in my state precisely because it's defined and guaranteed", and "What cost and what risk is it worth to erode the guaranteed benefit?"
I don’t suggest any solution here. But the evidence is growing that Republicans are beginning to reconsider just what can be done without either the support of the public or help from their colleagues across the aisle.
Posted by Audi Partem Alteram at 08:01 PM | Comments (0) | TrackBack
Tax Hikes: Time Bomb for Democrats
Matt Yglesias recognizes an important truth:
[H]ow will Democrats ever be able to raise taxes while remaining politically viable?... [Even] a reputably centrist brand of progressive politics... is going to require taxes as a share of the economy to be quite a bit higher. How to get that done is quite the political riddle. And it's worth pointing out that it's a riddle nobody's ever really solved.
(hat tip: Andrew Sullivan)
It's probably inevitable that taxes will rise in the next few years. For Republicans to refuse to countenance any increase in taxes is not responsible leadership (unless they suddenly start achieving miraculous spending cuts). We don't want to force smart fiscal conservatives to vote for the Democrats.
That said, as long as Republicans don't completely trash their anti-tax credentials by, say, embracing this tax-hiking Social Security "compromise," (hat tip: Audi Partem Alteram), they stand to benefit from resistance to tax hikes.
Once the tax hike kicks in, and once people start grumbling about it, Republicans can point to every spending program the Democrats propose and say "See that? That's the kind of thing that makes your taxes go up!"
On Social Security, the Republicans should draw a line. We want progressive indexation and personal accounts. We pledge to the American people not to raise the payroll tax rate. We pledge never to allow the payroll cap to rise unless the change is accompanied by personal accounts reform so that people can keep some of their money. We will not allow Social Security's tax-and-transfer scheme to take a bigger bite out of the economy. Those are our red lines. If we're in the minority in the future, we'll filibuster in defense of those red lines. If the Dems want to stick their fingers in their ears and sing show tunes this year, fine. When the red ink comes knocking, they'll come back to the negotiating table.
Toe that line, and we can't lose.
Posted by Good Samaritan at 08:17 AM | Comments (0) | TrackBack
June 08, 2005
I Support the President (Rant)
Audi Partem Alteram and I have debate this issue before. He seems to be smart and know the issues well. And yet the only thing that's consistent in his posts is his unfair criticism of the president and the reform proposals to date.
In his most recent post, APA argues:
The Democrats are not paying much of a political price for their refusal to consider private accounts for the simple reason that the public is not in favor of private accounts... The time has come to address solvency; we can seek to tackle private accounts at a later date.
And yet not so long ago he was arguing:
President Bush may have backed his party into a corner when he spoke on April 28th about progressive indexing (see article here). Without a fully developed plan to sell to the public, Congressional Republicans now face an unenviable task. As Howard Gleckman observes: "skittish Republicans must now defend major cuts in promised benefits."
Let's make something clear: addressing solvency means cutting benefits, (unless APA prefers to do through pure tax hikes). In that earlier post, APA approvingly quotes the Cato Institute saying:
[Republicans] are failing to draw on the rich populist themes of the dignity of ownership and the right to dispose of one's own earnings and savings that can win the political debate.
The Cato Institute, of course, was writing in favor of private accounts.
So when Bush tries to address solvency by cutting benefits, APA thinks he should only talk about private accounts. When Bush is talking about ownership, a.k.a. private accounts, APA thinks he should compromise and address solvency.
APA also raises every canard in the book. Take this post, for example:
I have argued consistently that many of our fellow citizens are risk averse, and that Social Security reform will not succeed until the issue of risk has been fully addressed.
The issue of risk has been addressed very well, already. There will be a safety net in place. Not only that, Bush is promising to keep every senior out of poverty, which the present system doesn't do. And whatever financial risk one incurs by investing in the stock market (not that much if one is investing for the long run) is nothing compared to the political risk associated with a government program that is gradually bankrupting itself, and in the meantime can be eliminated any time at the discretion of Congress. And the large majorities of young people who never expect to collect any benefits understand this perfectly well.
The Social Security debate so far can be summed up as follows: Republicans have staked out every reality-based position on the map. Democrats have retreated into stonewalling and denial. If you support raising the payroll cap, you're with the Republicans. If you support progressive indexation, you're a Republican. If you support carve-out private accounts, you're a Republican. If you support benefit cuts and not private accounts, you're a Republican.
If you're a Democrat, you'd better toe the party line, stick your fingers in your ears and sing show tunes. Except when you take a moment to impugn the motives of the Bush Administration and deliberately misrepresent every aspect of his proposals.
For the moment, this doesn't help us because voters aren't paying attention. But when the election nears and voters start looking into who's trying to solve the country's problems, the answer to that question will be clear: Republicans. If they're too dumb to figure that out, then they deserve what's coming to 'em as the program melts down. But we've got to put a little faith in people.
And we've got to keep our nerve.
There's something to be said for being "on message." It doesn't mean you're just a mindless dittohead. It means you understand that the Republican Party machine, with its eggheads and think-tankers and wonks on the one hand, its grassroots groups and lobbyists and Karl Roves on the other, is smarter than you. When you're inclined to disagree, give them the benefit of the doubt. It will make you smarter. If you get in the habit of criticize, criticize, criticize, your position will end up being inconsistent and uninspired.
Like Audi Partem Alteram's.
I've said my piece. But oh yes, one more thing. APA titles his last post: "Compromise, and move on."
Compromise? What compromise? Even in the article (by a Democrat!) APA links to, the "compromise" consists of nothing but tax hikes-- and even then it's very far from clear that enough Democrats to comprise a majority would vote for it, or that there wouldn't be a Republican revolt which would-- oh so rightly!-- sink it. So APA wants Bush to surrender not only private accounts but progressive indexation too, offer to fix Social Security through pure tax hikes, and still probably be rejected and humiliated by the Democrats!
You don't have to be some kind of Karl Rove to figure out that this is terrible, terrible advice!
Posted by Good Samaritan at 08:30 AM | Comments (0) | TrackBack
June 07, 2005
Compromise, and Move On
Fox News is sick of President Bush's tone deaf approach to Social Security reform too. As I have argued repeatedly on this site, the president has done an admirable job educating the public on the need to reform Social Security. But the public is not in favor of his proposed reforms. This is somewhat akin to convincing a woman to end a relationship that has no future and then being upset that she doesn't start dating you. There are two separate issues at work, and part of being a successful president is the ability to recognize the strength of opposing arguments. The Democrats are not paying much of a political price for their refusal to consider private accounts for the simple reason that the public is not in favor of private accounts. Politics is messy and it requires that even the strongest compromise sometimes. The "educating the public" approach to securing support for private accounts is a horse that been beaten until not a scrap of flesh remains. The time has come to address solvency; we can seek to tackle private accounts at a later date.
Posted by Audi Partem Alteram at 09:27 AM | Comments (0) | TrackBack
May 26, 2005
Defined Benefit Plans Hinder SS Reform
One of the difficulties facing those who wish to see Social Security reformed is the fact that while it remains by far the largest defined benefit retirement plan in the nation, it is by no means the only one. The existence of other defined benefit retirement plans provides critics of reform with tangible examples of alternative (though economically nonsensical) approaches to retirement planning. Media coverage of the lengths to which private firms have been compelled to go in order to address their chronically underfunded defined benefit pension plans has adopted a righteous tone that is entirely out of step with reality. The issue is not that the management of firms with defined benefit plans is or has been corrupt, but that these plans make no economic sense. Defined benefit plans are a lottery ticket, live long enough and you come out a winner, but if an accident or illness should strike you down early in your retirement, you are twice a loser. Future beneficiaries of Social Security, as well as those of state and municipal retirement plans (which are horrendously underfunded) and those of the few remaining defined benefit plans in the private sector must be apprised of the fact that the most secure retirement plan is one that delivers the money upfront.
Posted by Audi Partem Alteram at 12:23 PM | Comments (0) | TrackBack
May 25, 2005
Social Security Deal? (A Nasty Dilemma)
The public is fed up with partisan bickering. Given that, a deal on Social Security is good news.
But the deal Business Week suggests might be on its way is so wretched that it might not even be worth it.
1. "[N]ew savings incentives -- sometimes called add-on accounts -- would be created outside the current Social Security system." If the money for personal accounts doesn't come from payroll taxes, where will it come from? New taxes. That defeats the purpose. It worse than defeats the purpose.
2. "Democrats have privately expressed a willingness to accept benefit cuts and hand Bush half a victory rather than be seen as blocking needed changes." Good, but...
3. "Most changes will be aimed at higher-income retirees, but total benefit cuts will be much less steep than Bush has suggested. For example, Social Security now replaces about 35% of the average wage of workers earning $60,000. Trimming that to, say, 32%, would fix about 10% of the problem." The replacement rate will be reduced by 3%? Worthless. Pathetic. Terrible. The upper-middle-class and the affluent shouldn't get any benefits. Paying a government benefit to the affluent is an inappropriate use of taxpayers' hard-earned dollars, and especially of the revenues of the payroll tax, the most regressive tax on the books. This is the worst news. A travesty.
4. "Lawmakers could also adjust benefits to reflect rising life expectancy or speed up the shift to a retirement age of 67, which will now be reached by 2027." Good.
5. "To close the rest, Congress will raise taxes. Bush has carefully left the door open to imposing the Social Security tax on salaries above the current $90,000 cap. The most likely change: taxing wages up to $140,000." Most CJ readers will disagree with me, but I support this. If the Senate weren't such spendthrift scoundrels, or if Bush would veto veto veto their proposterous porkbarreling, we might be able to afford the Bush tax cuts. As it is, we can't. And while taxes are bad for the economy, deficits are worse. To repeal the tax cut by the back door, by raising the payroll tax cap, is better than repealing it by the front door.
But this represents a major concession, and we should get something in exchange-- such as big benefit cuts and personal accounts.
This presents a nasty dilemma. The deal would still be a baby step in a mostly-right direction. If we could somehow get the Republican leadership to sign the deal and then belittle it, to call it a piece of junk and a failure which left behind a major problem, then I'd say sign it. But they would call it a success, and America might get the message that the problem had been solved, and it would be harder to bring the issue up again in the future.
I say: Demand Pozen-style progressive indexation and carve-out accounts. If the Dems filibuster, or if enough Republicans back out to sink it, let it go down to defeat. Hand the Democrats a victory, and hope that it turns out to be a Pyrrhic one when the red ink comes knocking. The Bush version of Social Security reform delivers nothing but advantages to lower-income people and most minorities. It's pure gain for them. Let's bet on them being smart enough to figure out where their bread is buttered. (Hat tip: Kos, who doesn't like it either.)
Posted by Good Samaritan at 08:24 AM | Comments (0) | TrackBack
May 19, 2005
Too Boring to Care
Sometimes amateur and professional policy wonks (a group that includes anyone inclined to read this post) forget just how boring their obsessions can be to normal Americans. This happens among other groups, perhaps most notably among voters in last year's presidential election. But elections are simpler than policy. We have long since moved beyond our republic's early practice of having the runner-up in a presidential election serve as vice president. However, the formation of policy often works along those lines, with good ideas being diluted by questionable but popular sops to groups with the power to halt progress if they are not appeased. And so with policy decisions, especially those that are receiving public attention, it is essential that we all strive to understand the rationale for opposing points of view.
A President widely admired for his common touch is currently advancing the mother of all egghead arguments in his attempt to serve as a catalyst for the reform of Social Security. But as Edward Crane at the Cato Institute has noted: "Sending people out with charts and figures will achieve little." The eyes of average Americans glaze over as they listen to the steady buzz of arcana: unfunded liabilities, solvency, rates of return, transition costs, etc. As Crane observes: "the focus has been on green-eyeshade issues".
Compare the complexity of the reform argument (as it is currently being advanced) with the simplicity of the Democrats current stand. Benefits will be cut, they warn. The problem can be solved (or largely solved) by increasing taxes on the wealthy, they maintain (in this not a few Republican legislators agree). We can have private accounts and the old system too, they virtually squeal, (again, Republican support with this position should not go unnoticed). These are simple, reassuring counter arguments, and they are winning.
The target for the reform message needs to be those outside of the reform-minded wonk echo chamber. The electorate that chose the simple, straight-forward candidate in 2004 is decidedly against his brainiac case for reform, let's all reach out to the Homer Simpsons in American and "dumb it down a little".
Posted by Audi Partem Alteram at 11:40 AM | Comments (0) | TrackBack
May 17, 2005
Deal with Risk
In the last few weeks I've read two articles that, to me, perfectly encapsulate the reasons why Social Security reform continues to have the stench of a dead issue, no matter how urgently we need to address it. The first, "I Want My Safety Net" appearing in the May 16th issue of BusinessWeek, nicely lays out just how risk-averse many in our society truly are. The second, "50 and Fired", appearing in the May 2nd issue of Fortune, addresses the increasing uncertainty in the lives of middle-aged white-collar workers. Together, these articles paint a picture of a nation composed of individuals with a tenuous grip on their status, and hesitant to add the to the insecurity in their lives.
I have argued consistently that many of our fellow citizens are risk averse, and that Social Security reform will not succeed until the issue of risk has been fully addressed. According to Raj Chetty, an economics professor with UC Berkeley: "With a far greater portion of family budgets devoted to the mortgage, car payment, and health insurance, a transitory shock to wages becomes much more menacing," he then goes on to declare: "Risk in general has become a much more pervasive issue." In January 2000 67% of Americans considered investing in stock to be a good idea, by April 2005 that number had fallen to 45%; summarizing the views of the electorate, Representative Rahm Emanuel (D-Ill) stated: "They want the Ownership Society -- but they want it with a warranty". According to this article, the core group of those opposed to Social Security reform are a key Bush constituency: white male swing voters (who, it should be remembered, have average incomes and below-average educations). The concerns of Americans for the risks they currently face, their unwillingness to gamble when circumstances are not in their favor, and the defection of a key group of traditional Republican supporters on this issue have combined to make meaningful Social Security reform almost impossible.
In "50 and Fired", the wrenching changes many middle-aged white-collar workers are now facing are reviewed. Individuals that have been able to bounce back from previous layoffs are finding themselves increasingly less desirable to potential employers as they get older. According to workplace consultant Bruce Tulgan, 3.5 million individuals between the ages of 40 and 58 (nearly 5% of baby boomers) left the labor force between 2001 and 2004. Many older workers who do find new jobs are taking a pay cut: a Bureau of Labor statistics survey of "displaced workers" revealed that only 32% of workers over 57 earned as much or more at their new employer. Karen Hochman, chair of the NYC chapter of MENG (Marketing Executives Networking Group) says of the current situation: "You’ve got hundreds of thousands of obsolete professionals who can’t find employment in positions where they’ve been successful. These are people living off retirement savings 15 years before they were supposed to retire. They don’t know what they’re going to do." The people undergoing these career pressures, as well as their loved ones, can hardly be relied on to support reform that further increases risk.
I continue to be supportive of meaningful Social Security reform, but I am dismayed by the tone-deaf approach that has been taken by President Bush and Republican legislators to sell the idea to the American people. The public at large deals with myriad risks every day as our global economy continues to evolve into something vastly more dynamic and competitive than the economy of 20 or 30 years ago. To convince the citizens of this country of the merits of private accounts, someone is going to have to sell the idea that risk is either meritorious or necessary or both. Until someone in government does, I believe substantive Social Security reform will continue to elude us.
Posted by Audi Partem Alteram at 12:04 PM | Comments (0) | TrackBack
May 09, 2005
Who Said it?
1) "Investing Will Earn A Higher Return And Keep Social Security Sound For 55 Years."
2) "What I Believe We Should Do Is To Invest A Modest Amount Of This In The Private Sector, The Way Every Other Retirement Plan Does. The Arizona State Retirement Plan Does; Every Municipal Retirement Plan Does; Every Private Plan Does."
3) "Even After You Take Account Of The Stock Market Going Down And Maybe Staying Down For A Few Years, Shouldn't We Consider Investing Some Of This Money, Because, Otherwise, We'll Have To Either Cut Benefits Or Raise Taxes To Cover Them, If We Can't Raise The Rate Of Return."
1) President Bill Clinton, State Of The Union, 1/19/99
Chris Ward can be reached at lokisfur@aol.com
Posted by Lokisfur at 09:13 AM | Comments (0) | TrackBack
May 06, 2005
Bill Thomas to the Rescue
Representative Bill Thomas, chairman of the House Ways and Means Committee, has jumped into the Social Security debate and promised hearings and legislation. But his rhetoric has frightened some Bush supporters. Regarding Thomas’ ambitious gambit to provide momentum on the issue of reform, Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, was less than optimistic: "Now you have to watch out for the 'be-careful-what-you-wish-for' rule. At the end of the day, we want a package that has private accounts but doesn't increase taxes." Despite this pessimism, I am heartened by Thomas’ choice to take a leading role in this debate. As Terence Samuel of The American Prospect observed:
While skepticism remains about how much support there is for any of the particular elements of an overhaul, Thomas understands that having a piece of legislation and requiring a yes or no vote, rather than an amorphous proposal, is likely to change the parameters of the debate, which could be a dangerous development for Democrats who have focused all their fire on the Bush’s private retirement accounts.
Democrats are winning in the fight against vague generalities; Thomas seeks to force them to advance a more substantive position than obstruction for the sake of obstruction.
Posted by Audi Partem Alteram at 08:52 AM | Comments (0) | TrackBack
May 04, 2005
Brad DeLong on Progressive Indexation
Brad DeLong has to approve of the way progressive indexation protects the benefits of the poor, doesn't he? So in order to disagree with Bush (his raison d'etre), he has to resort to the ol' cynical-idealistic argument for Social Security:
Even without private accounts, aggressive means-testing a la Pozen risks undermining Social Security over time. Insulating the poor from cuts is a left-wing goal. But it will create a large class of Americans who get much, much less out of Social Security than they put in and for whom Social Security as a whole is demonstrably a very bad deal. Early Social Security guru Wilbur Cohen may well have been correct in his belief that "in the United States, a program that deals only with the poor will end up being a poor program. ... " Loading a large chunk of the burden of fixing Social Security onto America's upper middle class may be the first step in the creation of a mid-21st-century political majority for the phasing-out of the program as a whole.
The truth is, voters are not so narrowly self-interested as that. On the contrary, they're generous to a fault. Welfare, the Great Society and the rest of it, were popular for a while, and only when it became clear that the tangle of liberal programs was a creeping catastrophe for our economy and society did resistance mount. Voters will continue to support an affordable program of baseline income security for those deemed too old to work. If the Social Security system were something as fair and sensible as that, its opponents wouldn't have a chance.
If, on the other hand, the Dems succeeded in shackling us to the present broken system until it drags the country over a fiscal cliff, there'll be hell to pay. A generation or two will have been defrauded and violated, and they'll be angry. Anything could happen. No one's benefits will be safe.
To his credit, unlike the Democratss, Brad Delong has put forward a plan for Social Security. Basically, soak the rich. Too bad the Democrats won't make DeLong's plan their own. We'd have a real debate then. And an easy one to win.
Posted by Good Samaritan at 02:08 PM | Comments (0) | TrackBack
May 03, 2005
Too Little
Sometimes a little of a good thing can be incredibly bad for you. That's the case with the details of Social Security reform. Trying to promote the positive aspects of any plan will immediately strike many as disingenuous as the full implications of the proposal become clear. Instead what is needed is an honest plan that will allow Americans to forthrightly confront its pros and cons and go from there. The Bush Administration's current practice of hinting and suggesting and not actually advocating anything other than change in accordance with a few guidelines is doing nothing to advance this debate.
President Bush may have backed his party into a corner when he spoke on April 28th about progressive indexing (see article here). Without a fully developed plan to sell to the public, Congressional Republicans now face an unenviable task. As Howard Gleckman observes:
skittish Republicans must now defend major cuts in promised benefits. They'll say, rightly, that the system doesn't have the funds to pay those benefits in any event. But that's a complicated story -- much more complicated than the Democratic charge that Bush is proposing to cut benefits for an average worker by more than $7,600.
Instead of calling on Congress to lead, President Bush should go on the offensive, adopting more strident language both with our legislators and with the American people. As Jamie Dettmer, director of media relations for the Cato Institute puts it:
Major reform requires political toughness and tenacity and a real thoughtfulness when it comes to explaining why change is necessary. Alas, neither congressional Republicans nor the White House has excelled at presenting the case for reform. They are failing to draw on the rich populist themes of the dignity of ownership and the right to dispose of one's own earnings and savings that can win the political debate.
Posted by Audi Partem Alteram at 12:12 PM | Comments (0) | TrackBack
April 29, 2005
Lies and the Lying Liars Who Tell Them
E.J. Dionne writes:
The president's proposal for private accounts in Social Security is Exhibit A for eggheadism. There was little popular demand for these accounts. Most Americans like Social Security as it is. (my emphasis)
Here's what Americans really think about Social Security, based on a poll question that was far from unique; this is what the public has told pollsters about Social Security again and again:
14. Which of the following four statements comes closest to your own view of the Social Security program - would you say the program is in crisis, the program has major problems but is not in crisis, the program has minor problems or the program has no problems?
Crisis 25
Major probs. 49
Minor probs. 23
No probs. 1
No opin. 1
So 74% of Americans think that Social Security is in crisis or has major problems. Poll after poll has shown this! How can E.J. Dionne go on writing that "most Americans like Social Security as it is?" Does he think American prefer their government programs to be in crisis?
Posted by Good Samaritan at 10:06 AM | Comments (0) | TrackBack
