“Personal accounts do not solve the issue.” What issue, you ask? Why, the Social Security solvency issue, that nagging little problem that means by 2041, the retirement fund will be completely bankrupt. Who, you ask, would say such a thing? Maybe the AARP, a Democratic spokesperson, or some other raging liberal organization committed to expanding government entitlement and preserving an archaic relic left over from the Depression-ridden ’30s. It could have come from any number of partisan sources – including the White House.
At a White House press conference on March 17, President Bush said, “Personal accounts do not solve the issue.” “President Bush?” you ask, incredulous. Yes. President Bush, that champion of conservative values, that bastion of political courage whom Republicans obsequiously praise for his unheard of boldness. Not just gingerly touching that third rail, but gripping it with the full force of his November mandate, admits his plan doesn’t actually solve the problem he ranted about during his State of the Union. Federal Reserve Chairman Alan Greenspan agrees: he told Congress the private accounts plan “surely doesn’t alleviate the current problem.”
What President Bush has done is call much-needed attention to a serious problem in need of a serious, thoughtful solution. We shouldn’t forget, though, that Social Security topped President Clinton’s second-term agenda, too; Bush’s cross-country advertising blitz follows in footsteps made by the Democratic giant and obscured by a little blue dress. Nevertheless, Bush has kept his hands to himself, avoided such scandals, and brought the future of Social Security to the forefront of voters’ minds and to the top of Congress’s agenda. For this he should be applauded. But those who blindly support the president need to wake up and smell the greenbacks – the plan they think will save the system really costs upwards of $2 trillion.
Mr. Greenspan did offer a cautious, principled endorsement of Bush’s private accounts plan, but even he couldn’t explain what that kind of borrowing would do to a U.S. economy already saddled with unprecedented national debt. “If we were to go forward in a large way and we were wrong, it would be creating more difficulties than I would imagine,” he said when an Alabama congressman asked him if the economy could handle borrowing trillions more. Anything more than $1 trillion, he said, and things could get particularly dicey.
So if private accounts will do nothing but sink the country deeper into debt, what will solve what people on both sides of the aisle agree is a looming national crisis?
Herein lies the problem, and the reason Social Security has remained untouched for so many years. As any math major (or high school algebra student) will tell you, the only way to balance the books is to reduce spending or increase revenue. Here, that means cutting benefits or raising taxes. President Bush, strangely enough, seems willing to consider the latter: while neither he nor the Democrats are interested in raising payroll taxes, he has discussed raising the so-called “income cap.” Right now, citizens only pay Social Security taxes on the first $90,000 of their income. According to the Wall Street Journal, “repealing the wage limit altogether would cover Social Security’s 75-year shortfall.” Bush is unlikely to take such drastic measures, but raising the cap by a few thousand (or ten) would extend the lifetime of the program while sticking to the middle of the road. This is a good first step.
In the long run, though – and here our shortsighted, CNN-addicted, this-minute-is-all-that-matters generation is the long run, so we need to pay attention – we need a more permanent solution. As we enter the workforce and work our way up whatever ladder we are climbing, each passing day means more money taken from our paychecks to pay for our parents’ retirement, more money put into a failing system that won’t give us back anything at all. We need to listen carefully to this grand debate Bush has sparked, and we need to listen well.
What the debate doesn’t need are partisan hacks on both sides using this issue as a political bludgeon. We need to listen to innovative voices like John Edwards, who, as the head of the new Poverty Center at the University of North Carolina, is proposing ideas like baby bonds. This program would take federal money and buy Treasury bonds for each new baby born, making an initial investment in a child’s future that would have a lifetime to mature. We need plans that will increase the national savings rate, and make it easier for people with low incomes to pass assets on to their children. We need rich, healthy debate and a solution that gives retirees – today and tomorrow – the economic security they enjoyed since the Depression.
-The writer is a junior majoring in international affairs.