Lifting the Veil on Social Security Reform

I’ve done my share of critical pieces on the press. So when the press reports useful information, I should highlight that as well. It appears that the press sees through the GOP's latest proposal on Social Security reform and is willing to lift the veil on the underlying strategy. They report that the reform plan is nothing but a political trick that will increase the deficit indefinitely:

GOP Sounded the Alarm But Didn't Respond to It - Thomas Bill Does Not Address Social Security Solvency, By Mike Allen and Jonathan Weisman, Washington Post: For six months, Republicans have traveled the country as fiscal Paul Reveres, sounding the alarm about the coming collapse of Social Security. … But when House leaders finally rolled out their Social Security plan this week, it did nothing to address the problem that lawmakers and the president have convinced the public is looming as baby boomers retire. … House Ways and Means Committee Chairman Bill Thomas (R-Calif.) said … he decided to release the personal accounts plan now because he was "tired of reading all these stories about how nothing was happening and that it was dead in the water." "This was to show you we're not dead," he said in a brief interview. "We're not moribund. We're not disheartened or whatever. …."

When House Republicans announced their plan Wednesday, they offered only a single sheet consisting of a dozen sentences and no dollar figures. An analysis of a similar plan conducted by the nonpartisan actuary of the Social Security Administration concluded that it would worsen the nation's fiscal picture. That plan, which was introduced in the Senate, would require the transfer of nearly $1 trillion in general tax funds to the Social Security system to avoid accelerating the date when the Social Security system will become insolvent. "The total debt held by the public is increased indefinitely," Chief Actuary Stephen C. Goss wrote. …

Democrats said they view the new House plan as a political trick to try to portray them as obstructionist when they raised objections, and interviews with Republican lawmakers suggested there may be some truth to that. "If the Republicans take this to a vote and the Democrats try to stop us, I think we end up the winners," said Jim DeMint (R-S.C.), who introduced the plan in the Senate yesterday. "It'll help convince Americans in 2006 that we need a few more Republicans." … Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities, said the GOP plan's purpose "is not to restore solvency, but to serve as a foot in the door for more extensive private accounts in the future." Republicans indicated they hope the plan will pressure Democrats to negotiate, ... But Democrats immediately denounced the plan, and not one signed on to it. …

I believe the public is a whole lot smarter than those behind this reform proposal and the spin surrounding it give them credit for.

Update:  A Boston Globe editorial "Social Security scam" is more direct in its appraisal of the proposal.]

Comments

[pgl]

Paul Ryan (Republican) says the DeMint proposal is a downpayment. It's like buying a $1 million Beverly Hills house by borrowing $1 million. Downpayment = $0!

Good article!!!

[Bruce Webb]

Is there a political penalty on Democrats for not signing on to the "something, anything" plan for "saving" Social Security? Republicans/Privatizers have gazed into their Magic 8 Balls and see "Yes, absolutely", because they know what everyone knows: that without action Social Security faces a huge crisis. That is their entire strategy, every article today assumed that nothing would actually happen but that this would ensure a huge backlash against the Democratic Party come the 2006 mid-terms.

I know that numbers are boring, but there are bunches of Congressional staffers who were hired to read and translate numbers for their bosses. Either they are just hanging back or they really didn't make it pass page 17 of the current Report of the Social Security Trustees.

It is like watching a slow moving train wreck and not being able to warn the engineers: "Hey mister! Did you look at Table V.B1 and see its impact on Table VI.F7!! Oh my God look at the carnage!!!" But oddly enough only Rove, Norquist and Moore get mangled in the wreckage.

It is my version of Train Spotting. An odd yet oddly satisfying hobby. "I love the smell of Figure II.D7 in the morning! It smells like Victory!!"

It only sounds like mindless babbling. Each of those seemingly meaningless strings of letters and digits has numbers and graphs behind them. And those numbers and graphs tell a story - a very different story than privatizers think they do. I can wait and just continue my sniping from the sidelines. The numbers are running, and in this case time is on my side.

[Bruce Webb]

Enough speaking in code. Given ordinary economic growth Social Security is fully funded. Republicans can either shove through some plan this year or they can't. Either way they can't implement private accounts ahead of the release date of the next Social Security Trustees' Report in March 2006. Which Report will show that the long range trend revealed in this chart is in fact irreversible. A depletion date that moves out an average of a year and a half every year that passes is a date that will never occur.
http://www.epinet.org/content.cfm/issueguides_socialsecurity_changes

It's not broke.

[Bruce Webb]

Changes in Trustees Projections over Time

I thought typepad would be more link friendly than it is.