Everytime the government does not live up to its mandate, and flubbs the directive, we hear Privatization! Everyman for himself- but hold on now- we as the baby boomers were willing to take that on, wanted to take it on-we were "forced" to contribute, we had little say on what the monies were used for OTHER than to save for retirement- and now when the crisis is 5 years away~ Bush says Privatize- No I don't think so Mr Bush~ this should've been done long enough in advance to make sense! If Enron used monies irresponsibily- then maybe the government should be sued and held accountable for their misuse of funds!

Date:   7/18/2005 7:20:33 AM ( 19 y ago)

More Social Security Follies

Published: July 18, 2005
Of all the participants in the strange Kabuki dance that passes for a Social Security debate, the one who might have had the best chance to do some actual good was Representative Bill Thomas, the Republican chairman of the Ways and Means Committee. Last May, Mr. Thomas held a hearing on ways to boost retirement savings, and some of the ideas put forth - such as matching funds rather than tax deductions for I.R.A.'s - could increase retirement security, if they were combined with prudent measures to ensure the solvency of Social Security. But now, under pressure from Republican leaders, Mr. Thomas is being drawn into the White House's single-minded drive for a privatization scheme the public doesn't want and the nation can't afford.


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Mr. Thomas is expected to get a euphemistically named "retirement security" bill to the House floor, perhaps by the end of the summer. The bill would include a proposal to establish private accounts, ostensibly with money diverted from the surplus in the Social Security trust fund. In reality, every penny of the trust fund is already promised for future benefits, so Congress would need to borrow the money to establish the accounts. As a result, the proposal would increase the budget deficit by some $80 billion next year and about $1 trillion over 10 years, based on numbers from Social Security's chief actuary.

As if that's not bad enough, the proposal omits the benefit cuts and tax increases that would be necessary to improve Social Security's finances in a fair way. (Even President Bush finally bit the bullet and endorsed a benefit cut to partially restore the system's solvency, though his proposed cut would hit hard at the middle class.)

House Republicans are betting that their Social Security ploy will be smart tactics. If the Senate passed a Social Security reform bill - a big if - input from Senate Democrats would ensure that it would not include private accounts. But if the House and Senate pass different bills, they'll go to a conference controlled by the Republicans. In that forum, the leadership could force the House's private accounts into the legislation's final version. This all remains theoretical, but in the minds of Republican strategists it at least raises the possibility of enacting private accounts this year.

In the real world, the Republicans may simply be hoping to set up a scenario in which they will be able to blame the Democrats for being obstructionist. Whatever the endgame, it's a disappointing end to the potential for real reform Mr. Thomas showed before.

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