George Will

WASHINGTON -- Explaining a simple proposal to help people squirrel away gold for their golden years, Hillary Clinton said that a person "should not require a Ph.D. to save for retirement." But can even Ph.D.s understand liberalism's arithmetic and logic?

Consider the controversy over the State Children's Health Insurance Program, which is up for renewal. Most Republicans favor extending it. Almost all Democrats, and some Republicans, favor expanding it in a way that transforms it.

SCHIP is described as serving "poor children" or children of "the working poor." Everyone agrees that it is for "low income" people. Under the bill that Democrats hope to pass over the president's veto on Thursday, states could extend eligibility to households earning $61,950. But America's median household income is $48,201. How can people above the median income be eligible for a program serving lower income people?

Politics often operates on the Humpty Dumpty Rule (in "Through the Looking Glass," he says, "When I use a word, it means just what I choose it to mean -- neither more nor less"). But the people currently preening about their compassion should have some for the English language.

Clinton's idea for helping Americans save for retirement is this: Any family that earns less than $60,000 and that puts $1,000 into a new 401(k)-type plan would receive a matching $1,000 tax cut. For those earning between $60,000 and $100,000 the government would match half of the first $1,000. She proposes to pay for this by taxing people who will be stoical about this -- dead people -- by freezing the estate tax exemption at its 2009 level.

A conservative case can be made for something like Clinton's proposal. It is a case for reducing the supply of government by reducing demand for it, and doing so by giving people ownership of enlarged private assets as a basis for their security. It is a case for raising the nation's deplorable saving rate and simultaneously encouraging the nation's economic literacy and temperance by giving more people a stake in equities markets.

George W. Bush made this case in his advocacy of personal accounts financed by a portion of individuals' Social Security taxes and invested in funds based on equities and bonds. When he proposed this, Clinton stridently opposed him, and not just because she thought it would undermine Social Security's solvency and political support. She also said it was a dangerous gamble that would make retirement insecure by linking retirement savings to the stock market. Echoing a trope from Al Gore's 2000 presidential campaign, she said investing retirement funds in the stock market was a "risky scheme."


George Will

George F. Will is a 1976 Pulitzer Prize winner whose columns are syndicated in more than 400 magazines and newspapers worldwide.
 
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