Congressional Black Caucus members are already uniformly lining up in opposition to including individual retirement accounts as a key element of Social Security reform _ despite the fact that a specific proposal from the Bush administration has yet to arrive on Capitol Hill.
The outgoing chair of the caucus, Rep. Elijah Cummings, D-Md., is on record that "Our constituents ... can't afford having their money going into private savings accounts." Caucus member Rep. Stephanie Tubbs Jones, D-Ohio, who sits on the House Ways and Means Committee, the key panel with jurisdiction over Social Security legislation, is also opposed. Tubbs Jones believes that introduction of individually owned retirement accounts would "be detrimental to the nest egg that many Americans, particularly minorities, depend on in their retirement."
The black caucus, with 43 members, is now the largest it has ever been. Included is new Illinois Sen. Barack Obama, who has gotten much attention as a supposedly new-generation black leader. Yet, not one of these black legislators has indicated it might be worth giving serious thought to the possible benefits of individual retirement accounts to blacks.
This is particularly curious given that the newest winner of the Nobel Prize for economics, Edward Prescott of Arizona State University, has written recently that individual accounts are a good idea and should be included in reform of Social Security.
What's going on here? The winner of the Nobel Prize for economics says it's a good idea and the black caucus dismisses it before it has even been formally proposed. Is this about good economics or is this about power politics? Where is our exciting new Sen. Obama? There is certainly nothing partisan about the Nobel Prize. Yet, the recommendations of Prescott, honored by the Nobel committee as most distinguished in his field, are irrelevant to black Democrats.
I invite readers to log onto the Cato Institute's Web site on Social Security reform, www.socialsecurity.org, and engage the interactive Social Security calculator. I've just checked out, for instance, what Social Security with individual accounts would mean to a 22-year-old male currently earning $25,000 a year.
The calculator reports back that, under the existing system, this individual would get at retirement an annual benefit of $16,199. It also reports that, under the Cato Institute's plan, which would allow half the Social Security tax to be diverted to an individual account, an annuity could be purchased at retirement that would provide $44,036 annual retirement income. This is almost triple the Social Security benefit.