A commenter on a previous post asked what I thought of Bernie Sanders' recent statements about privatizing Social Security . And it turns out that a
couple of
blogs supporting privatization have linked to a
Heritage Foundation blog post concerning a
news article about a Vermont event where Sanders spoke out against the Bush administration's privatization plan.
To hear them tell it, you'd think Sanders has just switched sides in the debate. The Heritage Foundation blog notes Sanders' statement that " the president and his allies are lying on this issue," and then focuses on this sentence.
Sanders said he supported increasing contributions from wealthy Americans into the fund and placing it in a lock box so that the taxes are not used to support the general fund.
Not a direct quote from Sanders, but then they turned around and reinterpreted it anyway.
In other words, Sanders wants to stop the raid on Social Security. The leading plan to do that right now in the House is called GROW. It would take any surplus revenue coming in to Social Security and deposit it in personal accounts, where Congress cannot spend the money.
Of course they're joking about Sanders supporting privatization, but it's still an admirable bit of rhetorical contortion. What's really interesting is that while the White House hasn't shown any signs of backing off from the president's plan, his supporters seemed to have abandoned it to throw their support behind the
plan proposed by Senator Jim DeMint (R, SC) and
a similar plan proposed by Rep. Jim McCrery (R, LA). However, both plans appear to have some budgetary issues of their own.
Key Republican lawmakers, scrambling to keep President Bush's Social Security proposals afloat, plan next week to embrace an idea that many have avoided thus far: funding personal retirement accounts with surplus revenue that now pays for other government programs.
The strategy is controversial because it would create new budget problems. Either the diverted money would have to be replaced with new taxes, or Congress would have to slash programs now funded by Social Security's excess payroll taxes.
According to the
Center on Budget and Policy Priorities (CBPP) and
OMB Watch, the DeMint and McCrery plans would do nothing to address any solvency issues in Social Security, and are little more than a "foot-in-the-door" to revisit private accounts later. CBPP quotes DeMint saying as much.
"After people get their first statement that there is money in a Social Security account that they own, then we're going to have the political pressure we need to continue to grow those accounts." He also declared: "I think it’s a mistake to talk about benefit cuts or tax increases until we establish personal accounts, because once these personal accounts are established, I am convinced that we could see our way very quickly on how solvency could be created through just funding these personal accounts." He spoke of getting to solvency "without ever going back and cutting benefits, without even raising a tax (emphasis added)."
So, maybe the Heritage Foundation is unintentionally honest when it refers to the DeMint plan as "
a first step only." The CBPP report goes on to say that analyses issued by Social Security actuaries shows that DeMint and McCrery plans would actually make Social Security's financing problems worse, except that both include assumptions that funds would be transferred into Social Security from the
rest of the budget.
One
pro-privatization blog links to a
New Republic column that says of the President's plan:
President Bush's Social Security proposal looks to be dead in the water--and a good thing, too. The plan was half-baked and fiscally irresponsible. The American public took one look and realized it provided neither personal nor national financial security. Even many Republican congressmen didn't buy it. So much for the president's post-election political capital.
The
New Republic article goes on to suggest that the Democrats need to come up with some ideas of their own. If the above is any indication, Republicans might have some definite ideas about Social Security, but they'd better start working on some
good ones.
