Greenspan's second option is to further raise the retirement age, which is already scheduled to rise from 65 to 67 over the next several years. Most baby boomers will, in fact, have to wait until age 66 to receive full benefits. Raising the retirement age more is justified by increasing life spans and would have no impact on current retirees or those nearing retirement. But it would do a great deal to stabilize the Social Security system, especially if the qualifying age for Medicare is also raised.
Despite the modesty of these suggestions, Democrats were quick to denounce them. They are, no doubt, preparing advertisements targeted at the elderly, heavily emphasizing that Greenspan is a lifelong Republican. George W. Bush will be put in the difficult position of either repudiating Greenspan, whom he has already pledged to reappoint to the Federal Reserve Board, or allowing Democrats to frighten the elderly -- a potent voting bloc -- into thinking their benefits will be cut if Bush is re-elected. Sadly, such scare tactics have worked in the past.
Bush has often promised to shift Social Security toward a more voluntary system, by allowing younger workers to save a portion of their payroll taxes in private accounts, as many other countries now do. However, he has never put forward a plan to do this, and I doubt that he ever will. According to internal administration memoranda just released by journalist Ron Suskind, author of a recent book of about former Treasury Secretary Paul O'Neill, there is serious question as to whether Bush really understands what he has proposed or could defend it effectively in a debate. (The memos are available at www.ronsuskind.com.)
In short, Democrats have a golden opportunity to demagogue the Social Security issue, and I believe they will. I only hope Republicans don't immediately retreat on the need for reform or throw Greenspan to the wolves in their haste to avoid Democratic attacks. Better to use this as an opportunity to explain the truth to the American people and possibly win an electoral mandate for reform in the fall. As they say, the best defense is a good offense.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
Be the first to read Bruce Bartlett's column. Sign up today and receive Townhall.com delivered each morning to your inbox.