SALON

Saturday, Aug 3, 2002 10:50 PM UTC

Antisocial security

Republicans who argue that savings accounts can save Social Security are hiding the risks -- and the true costs.

By

Topics: Taxes, Social Security,

Selling a policy idea on its merits is apparently passé these days in Washington. It’s much easier to distort the alternatives instead so that the one you favor becomes the only way to avoid hard choices.

This is how a number of Republicans and conservatives are trying to sell private savings accounts in Social Security, framing them as the fiscally responsible alternative to the politically unpopular options of raising taxes or cutting benefits.

It’s an increasingly common tactic to gain advantage in the long-running debate over Social Security reform. According to a summary of Social Security’s finances written by the system’s trustees, expenditures will exceed revenues beginning in 2017. This shortfall is expected to be met with Treasury bonds from the Social Security Trust Fund — which are paid with general taxes — until those bonds are exhausted in 2041. Most politicians agree some changes should be made in the system soon to avoid potentially major problems in the future, and many Republicans see private savings accounts as the solution.

“[T]he reality is that there are three options available,” White House Press Secretary Ari Fleischer said in a press briefing on July 24. “One is to raise taxes, which was done before and hasn’t worked. The second is to cut benefits, which is something the president doesn’t support. And the third is exactly the president’s proposal, to allow younger workers [the] right on a voluntary basis to put a portion of their Social Security taxes in other investments.”

David John, a Social Security research fellow at the Heritage Foundation, repeated this three-choice framing in an appearance on CNNFN’s “Market Call” yesterday. “[W]e have only three choices in Social Security reform,” he stated. “We can raise taxes, which doesn’t achieve that goal [saving Social Security], dollar for dollar. We can cut benefits, which certainly doesn’t. Or we can do what 20, 25 countries around the world have already done, which is to allow people to invest their money.”

Rep. Patrick Toomey, R-Pa., speaking on the Fox News show “Hannity and Colmes” on Monday, made a similar accusation against opponents of private accounts. “You guys are advocating — what you guys are advocating is nothing,” he said, “which means you’re advocating a benefit cut or a tax increase.”

In an Op-Ed for the Washington Times, former Delaware Gov. Pete DuPont outlined the choices as “cut benefits,” “do nothing, which really means raise FICA taxes,” or “replace some benefits with personal retirement accounts,” which he calls “the only method that adds up to a solvent, long-term solution.”

An Op-Ed in the Manchester Union Leader by Ronald Fraser made the same case. “The alternative [to private savings accounts] is for Congress to continue to raise payroll taxes in the future,” Fraser wrote, “and perhaps cut benefits to keep the current system afloat.”

These all fail to note, however, that adding private accounts to Social Security would almost certainly require raising taxes, cutting benefits or taking money from other programs in order to fund the huge cost of switching to such a system. Specifically, individual accounts divert revenues needed to meet Social Security’s obligations to current retirees, thus worsening — rather than solving — the system’s financial shortfall. In fact, the president’s own Commission to Strengthen Social Security acknowledged that the version of private accounts it supports would worsen the program’s actuarial balance over the next 75 years.

Heritage’s John admitted in a recent UPI article that the hard choices he and his colleagues claim private accounts avoid are actually inevitable. “It’s true that money going into [personal accounts] will not pay current benefits to our parents,” he stated, “but filling that gap will have to be done by the hard choices mentioned above [cutting benefits or raising taxes]. It will just happen sooner.”

John would do well to acknowledge that more often, and Fleischer, Toomey, DuPont and Fraser would do well to join him. But they seem to prefer the facile argument instead.

Ben Fritz is co-editor of Spinsanity. More Ben Fritz.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
FBI reportedly joins Bachmann campaign finance probe
120 points121 points | 3 comments
vote
Jon Karl makes things worse: He regrets “inaccurate” Benghazi email but says his story based on it “still entirely stands.” Really. ABC News?
113 points114 points | 18 comments
vote
“Jodorowsky’s Dune”: The sci-fi classic that never was.
53 points54 points | 13 comments
vote
Doug Henwood: Capitalism Thrives on Class Exploitation
43 points44 points | 4 comments
vote
Paul Krugman’s right: Austerity kills. "In an economy where we’re all in the same boat, one person’s spending is another person’s income. So when the government cuts spending, it reduces people’s income, leading to less business, more unemployment, and a vicious spiral of slowing down the economy."
37 points38 points | 18 comments

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations