study, nearly a year in the making, pushes the debate away from concepts
only an accountant could love like trust fund solvency and rate of return
and onto where it really belongs: wealth creation.
Bickering over accounting details is not only profoundly boring, but also
a way for competing projections to essentially cancel each other out in the
minds of voters. Arguing for the ability of individuals to grow a nest egg
to provide for a comfortable retirement, however, will not get lost in a sea
of numbers and estimates.
But looking at the numbers for a moment is impressive, to say the least.
According to the Heritage report, a 30-year-old Hispanic married working
couple, earning less than a combined $50,000, would accumulate an
inflation-adjusted $109,000 in a retirement account, above and beyond
currently promised benefits. That’s right: that couple, with only 4-5% of
income diverted to an account, would make everything promised in today’s
broken system, in addition to racking up a six-figure nest egg. Talk about
a message worth repeating.
The remarkable thing about the Heritage study is that it focuses
exclusively on low- and middle-income workers under a personal account
program. Everyone-—even staunch opponents of reform-—agrees that relatively
well-off people would fare well with personal accounts. The Heritage report
provides mounds of evidence to show that even minimum wage earners stand to
gain from Social Security personalization.
In a nation swimming in debt, the opportunity to sock away extra cash for
the golden years could prove enormously popular. We already know that
people back personalization, because even with Al Gore’s constant
demagoguery, three-fourths of voters in 2000 supported Bush’s call for
Yet in the face of favorable exit polls, not to mention solid research
demonstrating the strength of a personalized system and Bush’s own
popularity, some Republicans want to run for cover rather than engage in an
eminently winnable debate. Fortunately, several highly placed staffers in
the GOP Congressional leadership believe that the proposed resolution will
not see the light of day, but the possibility remains.
Let’s hope that Republicans listen to President Bush, Rep. DeMint,
, or the voters—-anything but their own instincts.
Preparing for the latest round of Social Security scare tactics,
Republicans are planning a pre-emptive strike-—by shooting themselves before
In a strategy that must have been cooked up in a parallel universe, many
in the GOP believe that the best approach to Social Security is to run from
our popular President who actually campaigned on personal account-based
Many top Republicans on Capitol Hill are floating the idea of a resolution
to oppose “privatization” of Social Security. The supposed logic is that
once a GOP member votes for the resolution, a Democratic challenger cannot
legally run ads claiming the Congressman supports “privatization.”
Assuming for the moment that the GOP ploy might actually work on a legal
level—-which is a far-fetched assumption, at best—-actively undermining one
of the centerpieces of President Bush’s domestic agenda might not be the
wisest move. If Republicans do take up Social Security reform in 2003 or
2005, as must be the case if the retirement program is to be saved, then how
can they turn around and attempt to create personal accounts with a straight
face? Democrats would beat the GOP bloody.
In fairness to the Republicans, they want to eliminate the word
“privatization” from the debate, and there is a legitimate case to be made
for that. Jim Martin, head of the 60 Plus Association, has for years
promoted use of the word “personalization,” which, in fact, more precisely
describes the nature of Bush’s reform outline.
Personal-account based reform of Social Security is centered around
handing control of retirement security to individuals, at least on a limited
level. Allowing people to divert 2-5% of their income away from payroll
taxes and into accounts that build and create wealth is enormously powerful
when clearly explained. But the GOP’s goofy idea for a resolution
distancing itself from “privatization” would do little more than muddy the
waters for years to come.
In a single vote, Republicans likely would eradicate years and years of
tireless work by reform advocates, who have painstakingly educated the
public on the value of incorporating personal accounts into Social Security.
Headlines would undoubtedly blare, “GOP Bashes Bush on Social Security.”
Not exactly the “united front” message Republicans desire.
If Republicans truly want to frame the debate on Social Security reform,
they should listen to the leading advocate for personal accounts, Rep. Jim
DeMint (R-SC), who warns that the “misguided” proposed resolution “would
tell voters that we are running from the President.” DeMint’s campaign
advice? “We need to challenge the Democrats, and ask them what they’re
going to do, and why they oppose allowing workers to create wealth.”
DeMint’s strategy will become a lot easier to implement when armed with
the results of a forthcoming report from the