Tuesday :: Dec 7, 2004

Refocus Social Security Debate Back To What Program's Intent Was

by Steve

President Bush has already started his sales job on Social Security privatization, and has already lined up his first Democrat in support. But as Paul Krugman pointed out today, Social Security doesn’t need significant change to maintain its fiscal solvency. More important, one of the rhetorical devices that Bush and Rove have succeeded in so far through their obfuscating talk about an “ownership society” and how a privatization of Social Security fits into that is the fact that Social Security was never intended or designed to be an investment vehicle. It was simply supposed to be an old age insurance policy, guaranteeing a basic benefit so that seniors would not become destitute. And as such, once you implement the structural fixes that can and should be done to address the system’s long term solvency, there is no case to be made for transforming an old age insurance policy into something that it was never intended to be in the first place.

Republicans like to use the rate of return on investment and solvency arguments as a cloaked assault on Social Security itself. By claiming that the rate of return can be improved with personal, self-directed accounts, and that the government's future liabilities can be mitigated through such accounts, Republicans avoid being accountable for the real issue: do you or don't you support Social Security?

If the fiscal solvency issue can be addressed through changes to the retirement age, bringing more wage earners into the system, changing how the benefit is indexed, and by raising the income level subject to taxation, then Democrats have succeeded in reducing the argument squarely to one of the program's original intent. And once Democrats have undercut the fiscal solvency issue with the above changes, it leaves Republicans only to argue the issue of rate of return, at which point Democrats should proudly say that Social Security isn't an investment vehicle, but rather a well-administered, low-cost, safe and solid-return old age insurance program.

Folks who are unhappy with the fact that they have to pay into Social Security at all should vote for candidates who are against Social Security, if they can find Republicans with the guts to take that position. Taxpayers already have the right and tax option through 401(k)s and 457s to obtain better returns themselves in addition to the old age insurance provided by Social Security. The Democrats should force the GOP to fight this issue not on fiscal solvency, which can be addressed, but on the program's original intent. Does the GOP support or oppose fiscally solvent old age insurance?

Polls show that the GOP cannot win that fight, but the Democrats should make them fly that kamikaze mission anyway.

Steve :: 1:00 PM :: Comments (22) :: Digg It!