If Social Security is the question, who has the answer?
Obama and Reid at Las Vegas fundraiser. (R-J photo by John Locher)
Social Security is shaping up to be one of the most contentious issues in the Senate race between Harry Reid and Sharron Angle. With the program now taking in less money than it pays out annually, people are asking what should be done.
Today, The Wall Street Journal’s lede editorial weighs in with a drop quote in the print edition taken from a Reid fundraiser in Las Vegas in which President Obama made light of Angle’s calls for privatizing Social Security and Medicare by asking, “Harry, am I making this up?” (Watch the video.)
The WSJ editorialist answers: “Yes, Mr. President, you are.”
As WSJ points out, on one hand Obama is calling for his bipartisan deficit commission to restrain entitlements, saying everything is on the table, including Social Security. Then he lambastes Republicans for wanting to “gamble your Social Security on Wall Street.”
On his website Reid proposes:
“Some have argued that privatized accounts are a way to address Social Security's long term problems. The truth is, such accounts actually make matters worse, not better. As proposed by former President Bush, these accounts would have drained money from the Social Security Trust Fund, cut funding that the program needs, and accelerated Social Security’s insolvency. That is the last thing we should be doing.
“At a time when fewer workers have the security of a defined benefit pension plan, and most Americans have suffered substantial declines in their retirement savings, the importance of Social Security has never been more clear. That’s why it is so critical that as Congress considers any related legislation, we work to strengthen the program, not undermine it.”
On her website Angle is slightly more specific:
“We must keep the promise of Social Security by redeeming the ‘IOU's’ that have been written to the Social Security Trust Fund and then putting that money in a lock box that cannot ever be raided again by Washington politicians. The only way we pay for it is by cutting spending.
“We should also create personalized accounts for the next generation that cannot be raided.”
The most specific proposal comes from Rep. Paul Ryan, R-Wis., in his “Roadmap,” which:
“— Preserves the existing Social Security program for those 55 or older.
“— Offers workers under 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees. Includes a property right so they can pass on these assets to their heirs, and a guarantee that individuals will not lose a dollar they contribute to their accounts, even after inflation.
“— Makes the program permanently solvent — according to the Congressional Budget Office [CBO] — by combining a more realistic measure of growth in Social Security’s initial benefits, with an eventual modernization of the retirement age.”
The irony of the Obama-Reid-Angle rhetoric is not lost on the WSJ, which observes:
“The irony is that the fiscal condition of Social Security could be substantially improved simply by readjusting its actuarial formulas to slow the growth rate of benefits. But Republicans are unlikely to sign on even to that if they're going to be demonized for such a modest ‘cut’ anyway, much less endorse a reform like raising the future retirement age. Mr. Obama says he wants to cut a deal, but encouraging Democrats this year to box themselves in against any change will make serious reforms that much harder next year.”
Does anyone really expect any of them to actually do something?
