Losing the Social Security Battle
From the April 18, 2005 issue: And how to win the war.
Apr 18, 2005, Vol. 10, No. 29 • By STEPHEN MOORE
The solvency problems of Social Security are, of course, very real. But this tsunami of red ink headed our way is arguably a more acute political problem for Democrats than for Republicans. Dr. Thomas Savings, an economist at the National Center for Policy Analysis, calculates that if entitlement programs are not restrained, within roughly the next 20 years all federal tax revenue collections will be absorbed for the purposes of sending out retirement checks and paying for the health care and prescription drug expenditures of senior citizens. The rest of the left's multitrillion-dollar policy agenda will be stillborn. If the Nancy Pelosi vision of nirvana is for the federal government to simply become an income transfer program from young to old, then so be it. Why should Republicans fall on their swords to fix entitlement programs so that money will be freed up to fund the whole playpen of liberal programs?
Finally, to put the Democratic obstructionists in an especially uncomfortable position, it would make sense to start proposing fallback positions that at least get personal accounts started. One idea would be to defuse the fatuous "risky stock market" argument by simply offering a plan where workers can have a private account, but are permitted to purchase only Treasury bills. Take the stock market out of the equation and there is not even the odor of risk with personal accounts.
Another idea: Since almost all Americans, regardless of political party or age, are infuriated by the practice of Congress "raiding the trust fund" and spending the surplus payroll tax revenues on road programs, Pentagon salaries, and Lawrence Welk Museums, why not just place the surplus payroll tax collections into millions of personal accounts? This would allow workers to direct about 2 to 3 percent of their paychecks into individual accounts without in any way jeopardizing benefit payments. The only fail-safe way to prevent the continuing trust fund raid by Congress is to divert the surplus dollars into personal accounts so they can never be looted again. True, the surplus only lasts for another 10 years, but over that period over half a trillion dollars would be placed in the investment accounts of workers, and the vital precedent of establishing personal accounts would be firmly established.
That is the beachhead that Democrats want desperately to deny President Bush and the reform movement. Freedom does indeed create its own political momentum. And that's why even incremental steps toward Social Security private accounts are well worth fighting for.
Stephen Moore is president of the Free Enterprise Fund.