July 13, 2001 | Commentary on Social Security
Too bad no such plan exists. In fact, all the president's commission decided at its first meeting last month was that no solution could be developed until they had defined the problem. But that hasn't stopped journalists and interest groups from creating a strawman -- dubbing it the Bush plan -- and then savaging it.
In reality, there will be no Bush plan until the commission completes its job: to recommend how best to reform the 65-year-old New Deal program. The commission's report won't be written until this fall. Until then, there's no plan -- period.
Still, Newsweek business columnist Allan Sloan wrote a July 2 column entitled "Bush's Social Security Plan Would Reduce Benefits by 40%." He reached this conclusion by taking the current predicted cash deficit -- estimated to hit 27 percent of promised benefits by 2035 -- and subtracting an additional 13 percent that would go toward personal retirement accounts.
Unfortunately, Sloan never bothered to add in the other side of the equation: what personal retirement accounts could earn to fill that gap. The result was a dishonest scare tactic unworthy of Sloan's usually sound reporting. Even if the accounts earn a modest 5 percent "rate of return" after inflation, they easily trump Social Security's anemic 2 percent.
The New York Times fell into a similar trap. The day after the commission's first meeting, a Times headline warned "Bush's Commission on Social Security May Propose Caps." The story claimed that commission leaders would "probably have to propose politically difficult steps like raising the retirement age and reducing cost of living adjustments" -- the two most unpopular ways to fix Social Security.
But commission leaders said nothing to suggest they support raising the retirement age or cutting adjustments. Instead, the co-chairmen said that the commission started its discussions with no preconceptions at all.
Not to be outdone, National Review warned congressional Republicans that the commission's failure to rule out these "difficult" steps could cost Republicans control of the House of Representatives in 2002. Other journalists quoted House leaders who want Bush to renounce any interest in the issue and who claim that no matter what the commission recommends, they oppose any discussion of the subject. They also hinted that Bush would change his mind about considering this issue, which the White House strongly denies.
Meanwhile, the Institute for America's Future, a Washington-based liberal think tank, hysterically claimed the commission was formed solely to destroy Social Security. Worse, the IAF charged, the commission is "unrepresentative" of the views of the American people. This despite poll after poll showing large majorities support the creation of Social Security accounts that would allow workers to invest a portion of the taxes they now pay. Why did IAF say this? Because it's funded by unions that oppose any serious reform of Social Security.
Sometime this summer, the commission will issue an interim report describing exactly what problems Social Security faces in the coming years. It also will discuss how the commission plans to evaluate potential solutions. Only then will it even start to put a plan together.
Only two things have been decided. Recognizing that Washington officials have a perverse fondness for mystifying acronyms and phrases such as COLAS (not the kind you drink), the commission has vowed to issue its report in plain English, so that everyone -- not just policy wonks -- can understand it.
Secondly, the commission has decided to hold broad public hearings outside of Washington to determine what people think of the current system and what they'd like to see in a new one. Do they want some of their payroll taxes back to invest on their own? Are they comfortable with the idea of investing? Do they trust government to invest for them?
No one said Social Security reform will be easy. If the commission had any illusions about that, they ended after the first meeting. But you and I should be aware that the media who cover this important story aren't always accurate and that the real problem may not be reforming the program, but getting the truth out.
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