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Monday, August 01, 2005

Social Security Reform Stopped by Democrat’s Radical Economists

Kevin Hassett of Bloomberg says he is frightened with the thought that Democratic economists might be running the country again some day.  Hey Kevin.  Boo!!!

How President Bush's Social Security Reform Died, Kevin Hassett, Bloomberg:  Social Security reform is dead. … Until two weeks ago, Social Security reform was sort of dead. But now it seems to be all dead. The breakdown occurred when the administration backed away from a proposal making its way through the House of Representatives that would have introduced personal accounts without specifically restoring solvency to the system.  Ben Bernanke, chairman of President ... Bush's Council of Economic Advisers, publicly signaled the White House's displeasure with such an approach. Asked if restoring solvency was an inviolable condition, Bernanke said, “Yes, I think the president will insist on maintaining the long-term solvency of the Social Security system.”  The word from … up on Capitol Hill, is that this signal from the president sucked the remaining life out of the House measure. …

Another thing we learn from the demise of Social Security reform is that when it comes to economics, this is now Howard Dean's Democratic party.  This completes, really, the economic radicalization of the Democrats, and it is a frightening picture -- frightening if you consider that they might run the country again some day.  The fact is that the Social Security reform proposed by the president is quite moderate. … If private accounts were introduced, then you might buy a U.S. Treasury bond and hold it until retirement. ... The labels change but the economic difference is not earth shattering.  In politics, one should be delighted if opponents care deeply about achieving something of relatively minor importance. … Instead, we got only obstruction. Perhaps this is because Democratic leaders don't have any novel policy ideas they would like to see implemented. Perhaps it's because the Democratic leadership is currently to the left of the Mongolians on Social Security. … Another chance for change is ahead. The president's advisory panel on tax reform will make a recommendation in the fall. Its report will kick off a debate and begin the legislative process on that key issue.  Social Security solvency may well be addressed while tax reform is pursued, perhaps as early as next year. …

So when he says all dead he means until fall.  Yep, that's pretty dead.  And it’s all due to the “economic radicalization of the Democrats.”  He must be referring, as he casts aspersions, to those of us who have been carefully separating social insurance from retirement savings (see here and here also) and discussing how to most efficiently provide for those entering their retirement years (e.g. see here and here), not those “conservative” types who want to destroy the existing Social Security system.  As he says, a foot in the door towards destroying the current system is of only “minor importance” and not radical at all.

I wonder why he thinks Democrats “might run the country again some day…?”  I think that too.  The sooner the better.


Update:  This is what the death of Social Security reform looks like:

GOP Plans August Campaign on Personal Savings Accounts, Fox News:  House Republicans will campaign for a new type of personal savings accounts during the August recess and vote on them in September, the first sign of political momentum in a Social Security debate Democrats have so far brought to a standstill. Republicans call the proposed plan "grow accounts" ... The accounts would not contain stocks, only U.S.-backed Treasury bonds...

    Posted by on Monday, August 1, 2005 at 02:34 AM in Economics, Politics, Social Security | Permalink  TrackBack (2)  Comments (17)

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