Two editorials today in quasi-liberal papers (SFChronicle and WAPost) both try to move towards a Democratic reason for accepting private accounts:
1- because Dems don't really believe that people should "expect something for nothing";
and
2- because without private accounts and commitment, social security is just an elaborate welfare program.
These arguments are designed to appeal to less cagey Dems who had better recognize the disingenuous (if not deceitful) nature of them before they go off believing them.
More...
First there's
Debra Saunders in the Chronicle:
Instead, Bush got serious. While 99 percent of Washington pols have been talking as if Americans have a sacred right to expect something for nothing, Bush backed a plan by a Democrat, lawyer and mutual-fund executive Robert Pozen, called "progressive indexing." Pozen's plan would maintain Social Security benefit increases for lower-income workers, while limiting increases for high-income and middle-income workers, by tying the growth in their benefits to a price index. The White House claims this plan would fix 70 percent of the system's projected shortfall.
...
Meanwhile, the Democrats in Congress have spent the last two months acting as if a few tweaks would fix Social Security's woes. They still have no plan, and they still aren't leveling with the American voter.
The Concord Coalition has put together a series of issues briefs -- you can find them at www.concordcoalition.org -- on just how close to collapse the system is. The organization notes that while Social Security "trustees say that Social Security is 'solvent' until 2042," what they mean is that the government has written IOUs for that amount without setting aside any money to pay it back. There is no trust fund. While the trust fund has accumulated trillions in IOUs, "that just means that the government will owe itself a lot of money." Money it won't have. Thus, after the year 2018, the federal government will have to find new money to pay expected Social Security benefits.
In a statement last week, House Minority Leader Nancy Pelosi attacked Bush for saying the "unheard of -- that he did not intend to pay the Social Security trust fund back." Pelosi also bashed Bush for cutting Social Security benefits for the middle class. As if everything would be hunky-dory without Dubya's plan.
...
Democrats say they won't compromise with Bush unless he drops private accounts, but the voluntary nature of the Bush plan -- only those who want private accounts would have them -- is a compromise.
Besides, shouldn't the Dems welcome a plan that would allow poor workers, if they sign on, to leave their savings to their loved ones?
...
If you ask me, Bush has introduced compromise to the equation by proposing cuts suggested by a Democrat, and proposing cuts that hit the GOP base. Still, that doesn't mean that Bush has finished compromising. It won't help if Bush is compromising alone. It won't help if compromise means, not each side giving something up, but each side getting what it wants, thanks to borrowing.
[Emphasis mine]
Well, first of all, I didn't realize that money set aside as a trust didn't really exist. If I were a large corporation, like say an airline, I'd solve my bankruptcy problems the Bush way: just cancel 80% of flights and when people show up with nothing but a paper ticket tell them, "What did you expect? To get something (i.e. airfare) for nothing?!" All they have to do is tell them that the trust fund holding the pre-paid fares is full of IOUs and they don't have the money to fly. Should have started your own private airline account, my friend.
This is such a distortion that the only fair thing to do is call it what it is: a bald-faced lie. The trust fund is built up of contirbutions. So when people expect to get their social security, all they want back is the return on their own money. Dems must be forceful about this!
Second, Dems had better watch the meme of a depleted trust fund full of IOUs. It's real easy to confuse people with this story, as they become more and more concerned with the emptiness of the fund, and not how it got that way. Again, when the airline refuses to allow you to take your seat, are you going to praise their fiscally sound management of a terrible situation, wondering earnestly how to fix the empty trust account, or are you going to be hopping mad that some profligate CEO and executives allowed that money to be spent, contravening laws, acting irresponsibly and essentially stealing from you? Bush doesn't deserve even sympathy for "telling it like it is" he must be pressed to explain WHY the trust fund is missing funds, and what HE's going to do about it, not the American public. He should never, ever be allowed to indulge in the IOU meme again without paying a steep price. This is dishonesty, irresponsibility and theft, nothing more nor less.
Third, the notion that this is a purely personal decision that in no way affects those who "don't want" to invest is another evil deceit. It has nothing at all to do with "wanting", just "not having". Again, this is supposed to be a virtue when it is clearly the biggest sin of private accounts. Dems beware.
Last, the new meme which suggests that a Dem "failure to compromise" is built on the same self-serving foundation as the Repubs is just another lie. It's not about borrowing, it's about repaying to the trust fund what has been stolen by the deceit, classism, waste and irresponsibility of the administration. Stop paying $100 billion a year for war, reduce military spending, repeak the tax cuts, etc. and the US would enjoy surpluses. It's not that the trust money isn't there--it's just that Dubya spent it all on candy.
Anyway, if that's not enough, Will writes another of those obfuscating, faint-praise-for-absent-Dems pieces designed to re-frame Bush's interests as congruent with Dem values. It's another lie:
Were Moynihan still with us, he, unlike today's mostly unreflective Democrats, would articulate why President Bush's proposal -- the explosive combination of progressive indexation of Social Security benefits and personal retirement accounts financed with a portion of payroll taxes -- is dynamite packed around the foundation of the Democratic Party's edifice of belief. That foundation is an ethic of common provision through government.
Progressive indexation -- larger benefits for the less affluent -- would mean that for the more affluent 70 percent of Americans, Social Security would be of diminishing significance as their affluence grows, with dwindling relevance to retirement planning. This 70 percent would be the portion of the population most able to take advantage of personal accounts. And it would possess more than 70 percent of society's political skills -- the will and ability to get the attention of politicians by articulating grievances and participating in politics by financial contributions and other means.
Progressive indexation is means testing politely labeled, and means testing, however labeled, is an attribute of welfare programs. Which is why in 1997 -- eight years before Bush's attempt to attract Democratic support by proposing progressive indexation to make Social Security more redistributive -- Moynihan understood why a combination of progressive indexation and personal accounts "carved out" of Social Security would repel Democrats. Moynihan wrote:
"Once the great majority of citizens found that they would do better in the private investment part of this new system, support for the redistributive aspects of Social Security would quickly erode. It would become a residual relief program for the poor elderly, possibly turned over to the states as is done with welfare."
Okay, so if I get it, Will is saying that the more affluent 70% of society would be "disenfranchised" by progressive indexation? Really?
This is important: when someone says that the poor will get a larger share of social security, this is a lie. They will not and everyone knows this. What they will get is a sum which represents a larger proportion of their contributions. Why is this kind of sophistry allowed to go unchallenged?
Furthermore, if I'm not much mistaken, the problem with allowing private accounts is not that it makes people want to abandon social security--rather, it sets up the false expectation that one can privately realize a better return than the government will pay out. This is not prima facie false, but a distortion. It's only true if one has the wherewithal, self-discpline and knowledge to invest appropriately and not touch the funds. Those who are poor generally need to spend what they can to eat. They are not in a position to have the attributes necessary to realize a return. This is not about the Ant and the Grasshopper. The poor are not indolent, self-serving leeches (any more than the rich) who choose to fritter away their time. In most cases, they never have the opportunity to make a real choice.
One last note: why should anyone be allowed to leave their social securiy "savings" to their loved ones, other than through the provisions of the plan? This is about leveraging the common good to produce a return that is greater than each working on their own. Private investment will never be able to address this one feature of a govt. run program. Notice I didn't say "govt. funded"--it's NOT. It's funded by our contributions.
As long as the folks in the White House don't spend it on their friends and leave us the "IOU".