January 27, 2005

EDITORIAL

Don’t be fooled again

The Bush administration is trying to play the same game with Social Security that it did in the run-up to the war on Iraq. Remember that fretful time two years ago? As it tried to build public support for an invasion of Iraq and secretly carried out its war planning, the administration portrayed Saddam Hussein as an imminent threat to the United States, a man with the capability of attacking America.

The same type of exaggerated hype is now coming from the White House when it discusses the administration’s plans for privatizing Social Security. Just as it did before the invasion of Iraq, the Bush administration is playing on people’s fears to sway public support for so-called Social Security reform.

For instance, the president has overstated the problem facing Social Security, saying earlier this month that the system would cross over the “line into red” in 2018. The president was flat wrong. The year 2018 is when the Social Security system’s trustees project that the program will have to use assets in the Social Security trust fund to start covering full benefits. This will happen because baby boomers will begin to retire in large numbers. The Social Security trustees’ own conservative predictions say that the system won’t be able to cover full benefits until 2042, while the Congressional Budget Office reports that Social Security can pay full benefits until 2052.

Then there’s the myth of the trust fund, which doomsayers falsely described as unreliable and a worthless collection of IOUs that won’t be honored. As an article in the New York Times Magazine reported on Jan. 16, “Social Security does not own junk bonds or third-world debt.” Instead, the program invests its surplus funds in U.S. Treasury bonds, which earn interest and are considered a safe investment.

While the White House and other conservatives have been making the case for privatization, administration officials have not been upfront about the real costs of their plans: though the government would have to borrow an estimated $2 trillion to pay for the transition to personal savings accounts, it would still have to cut benefits to cover the system’s liabilities.

There are more sensible solutions to ensuring the long-term health of Social Security, including raising the age younger workers can start collecting Social Security benefits; slowly increasing payroll taxes to generate more funds; modestly borrowing funds to cover any shortfalls; and gradually raising the $90,000 limit on taxable income.

Though the war in Iraq has been immensely controversial, and many Americans are expressing doubt in the president’s ability to secure peace in Iraq, a majority of this country’s voters still backed the president in November. It, of course, turns out the Saddam did not have WMD and Iraq was not a serious threat to the U.S. The last four years have shown that the president has a funny way of dealing with the truth.

President Bush is deceiving Americans again, this time painting Social Security as a program in crisis. The American people and Congress should tell the president that they will not be fooled again.

—Robert Mihalek