The Washington Post has an editorial supporting progressive indexing. But, as we shall see, Bob Ball has other ideas. Who is Bob Ball?
A Retiree Trying to Save His Life's Work, By Joel Havemann, LA Times: … Ball's goal isn't preservation of his monthly benefit check. Instead, he is defending the program that is his life's work. Before the first monthly Social Security check was delivered in 1940, he was already working as a 25-year-old clerk in the Newark, N.J., Social Security office for $1,620 a year. He shot up through the bureaucracy to become commissioner of Social Security for three presidents. On his watch, Social Security became the biggest and most popular benefits program. And in 1983, when he had been collecting retirement benefits for four years, he was a key negotiator of the law that rescued Social Security from the brink of insolvency. With the possible exception of J. Edgar Hoover and the FBI, perhaps no one has been associated with a federal institution as intimately and for as long as Robert M. Ball. He is one of the last of a nearly extinct species: career civil servants who became top policymakers…
First, here’s what the Washington Post says:
Mr. Bush's Proposal, Washington Post: Is President Bush advocating cruel cuts in Social Security? … Tying initial benefits to wage growth lets retirees share in the improved standards of living to which they contributed. But because wages generally increase faster than the cost of living, wage-indexing is also enormously costly … Simply switching from wage- to price-indexing would more than take care of Social Security's solvency problem. … Such a formula wouldn't entirely eliminate the Social Security deficit, but -- under a plan produced by investment executive Robert Pozen and endorsed by Mr. Bush -- it would address about 60 percent of the problem. The major critique of the Pozen plan is that promised benefits for the middle tier would be cut too sharply. ... Mr. Pozen is the first to say his plan could be recalibrated to be more generous to the middle class. … there's not enough money in the system to pay scheduled benefits, and tax increases can't be expected to cover all of the shortfall, … It's why progressive indexing ought to be considered as part of the solution.
What does Bob Ball think of this? Not much. Continuing with the LA Times story:
Like many other retirees, Bob Ball is concerned about what's going to happen to Social Security. From his cluttered office … he has proposed his own formula for shoring up Social Security's financial future. His relatively modest tax increases and benefit cuts, combined with some government investment in the stock market, offer a contrast to President Bush's call for individual investment accounts, which Ball abhors, and steeper curbs on traditional benefits for many future retirees. … [T]he proposals of … George W. Bush, have prompted the 91-year-old Ball to ... fight proposals that, in his view ... "would ruin the whole system," ... "It's a fundamental, philosophical policy shift." President Franklin D. Roosevelt, Ball said, wanted a government-provided benefit that would replace a fixed percentage of a workers' pre-retirement income. The vision was of a benefit based not on need — which would carry the stigma of a welfare program — but on past earnings. … Bush's suggestion that benefits be reduced from now-promised levels for future middle-income and wealthier retirees ... would eventually leave all with about the same benefit now promised to the poor… The result, he said, would be a loss of political support for Social Security.
Ball has his own proposal, which includes dedicating the proceeds of the estate tax to Social Security and using a more precise — and stingier — measure of price inflation to determine annual cost-of-living adjustments. His most controversial proposal: let the government invest some of the Social Security trust fund's surplus in stock index funds. ... He hopes some Democratic lawmakers, who are refusing to deal with Bush as long as he is pushing individual accounts, will turn to his alternative when the time comes. … This is not the first time that Ball has come out of retirement to advance ideas for bolstering Social Security — and the last time, he carried the day. In 1983 … Ball was a central figure behind a bipartisan package to keep Social Security from running out of money — a prospect then only months away. … Legend has it that when a bipartisan commission deadlocked, President Reagan, a Republican, and House Speaker Thomas P. "Tip" O'Neill (D-Mass.), decided that Social Security's future was more important than partisan advantage. So the two Irishmen met alone and agreed to a rescue package. Fiction, says Ball. "Reagan and O'Neill couldn't stay in the same room together," he said. The deal was negotiated largely by Ball …Commission members quickly agreed that the final package had to include tax increases … and benefit cuts … When that didn't add up to enough cost savings, Ball hit upon an innovative step that could be interpreted by Democrats as a tax increase or by Republicans as a benefit cut: subject some Social Security benefits to the income tax. Reagan and O'Neill signed off on the deal, and Congress passed the accord handily.
… Ball … was appointed commissioner of Social Security ... in 1962, a job that he held ... through … the first term of Republican Richard M. Nixon. In 1972, when he was running for reelection, Nixon supported a 5% benefit increase along with a long-time goal of Ball's — automatically adjusting benefits in future years to keep pace with inflation. Congress kept the inflation protection … Chuck Colson got the idea of including in the envelope with the first beefed-up Social Security check an insert crediting Nixon with the increase. Ball threatened to quit and, by implication, go public with the reason, if the White House took this unprecedented step. The White House backed down. Nixon replaced Ball the next year. … That was three decades ago. Ball has outlived many of the presidents for whom he worked. … And, if anyone cares to listen, he has a long view and a few more ideas about Social Security to share.
Bob Ball has gained a lot of wisdom in his many years.