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Wednesday, April 20, 2005

Bush Acknowledges Personal Accounts and Solvency Are Separate Issues, But He Will Not Trade Solvency for Personal Accounts

President Bush has finally acknowledged that personal accounts and solvency are separate issues as is evident from this portion of an interview posted on the MSNBC web site.  He also states clearly that he will not trade personal accounts for solvency:

Insana: -- and ways to fix this problem. Would you, for instance, trade the personal savings accounts if you were promised a permanent fix for Social Security solvency problems?

President Bush: Well, I think any plan has got to have -- give younger workers an option of investing some of their own money in, in personal savings accounts. First of all, it's not going to pass [inaudible] personal savings accounts; secondly, a plan with personal savings accounts would bring the Social Security system into the modern era ... one important ingredient is to allow younger workers to take some of their own money, set it aside in a conservative mix of bonds and stocks.

Insana: Would you accept those personal savings accounts as add-ons, as some Democrats are suggesting, and then work through some of the solvency issues that we're also talking about?

President Bush: Well, first of all, there needs to be a permanent fix. You keep talking about solvency issues. I agree. I mean, look, personal accounts will make the system better for younger workers. The solvency issue needs to be addressed. And, and you've heard ideas as to how to address solvency. And the Democrats have put out ideas, Republicans have put out ideas. And my job is to keep the process moving forward.

One thing I'm not going to do on your show, in all due respect, is negotiate with myself...

The administration created an imagined crisis in solvency (there are concerns, but they are not so large as to require fundamental changes in Social Security), then put forth personal accounts as a means of addressing solvency. Now, finally, they are admitting that solvency and personal accounts are separate issues, but they have no proposals whatsoever to deal with the insolvency. Bush claims Republicans have put forth proposals to address solvency, but what are they? Tax increases? Benefit cuts? Increasing the retirement age? What is their plan for solvency?

They are putting up roadblocks to addressing the solvency crisis they invented. There is no need whatsoever to link personal accounts to the solvency issue, but the president has made it very clear that "...any plan has got to have -- give younger workers an option of investing some of their own money in, in personal savings accounts."

If they truly wanted to solve their imagined solvency crisis, they would stop insisting that personal accounts be part of any solution addressing the solvency issue. It's a philosophical position, not the solvency issue, that is driving the administration's agenda.

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    Posted by on Wednesday, April 20, 2005 at 11:43 AM in Economics, Social Security | Permalink  TrackBack (0)  Comments (1)

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