Sunday, May 14, 2006

Let The Bamboozling Resume!

I sent this to the Buffalo News last week. Doesn't look like they'll be publishing it:

Let the bamboozling resume!

Last year, the President and his Republican apologists tried to bamboozle the American people into destroying Social Security, in the name of "saving" it. Thankfully, enough people were smart enough to shut him down then, and the Democrats in Congress cheered when Bush mentioned his failure in his State of the Union speech.

Now, he is resurrecting his campaign. Michael Tanner, in his Buffalo News column on May 7, uses the President's scripted language to say that Social Security "will begin running a deficit in just 11 years", and that "the Social Security Trust Fund will pay benefits until 2040..." and then go broke. He claims that the Trust Fund "contains no actual assets" and that the government bonds are simply a "form of IOU". Or, as President Bush puts it, "worthless IOUs". Mr. Tanner says that it's unclear where the money will come from to pay them back.

What the President and Mr. Tanner do not say is that the so-called "deficit" was anticipated years ago and accounted for when the Trust Fund was set up. It’s what Al Gore promised to put in a “lockbox” in the 2000 election debates. Here’s how it works: The Social Security taxes workers pay now amount to more than is required to pay current benefits. The surplus is kept in the Trust Fund, like a savings account. What happens in 11 years is that the amount going out to benefits will exceed the amount coming in through taxes, and Social Security will need to start paying benefits partly out of the Trust Fund.

The claim that the Trust Fund "contains no ... assets" is also false. The government bonds the Trust Fund holds are just like any other government debt - Treasury notes that are to be paid back with interest. If they are worthless, then the phrase "backed by the full faith and credit of the United States" has no meaning.

Where the government gets the money to "pay back those IOUs" is not a problem with Social Security. It’s a problem with government deficit spending. The solution to this problem is straightforward: Stop running chronic deficits, something this President and the Republican Congress seem unable or unwilling to do, between tax cuts for the super-rich and pork barrel earmarks.

Mr. Bush proposes to “save” Social Security by setting up “private accounts” that individuals would manage for themselves. Setting aside the many reasons why private accounts would be a bad idea (how good are you at picking stocks?), just getting them started would require borrowing $1 trillion. That makes no sense.

Mr. Tanner says the Democrats were once outspoken about Social Security. They still are, but believe the future of the program will be assured by ways other than what the President is selling. And the rest of the Republicans, despite all of their old rhetoric about fiscal responsibility, have become the party of borrow and spend, and should no longer be trusted.

Update: Published in the Buffalo News May 26.


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