From today's Science Christian Monitor
Commentary > Dante Chinni
from the March 01, 2005 edition
A whiz kid, magic beans, and your Social Security
By Dante Chinni
WASHINGTON – It's taken a while, but the Bush administration has found the right voice to trumpet its Social Security plan, Noah McCullough. A private citizen, Mr. McCullough brings a refreshing can-do, be-not-afraid attitude to the discussion, and he will travel to states in the South singing his praises for the Bush plan.
"What I want to tell people about Social Security is to not be afraid of the new plan," McCullough told The New York Times recently. "It may be a change, but it's a good change." It's such a simple, refreshing message, almost childlike. Of course, that may be because McCullough is a fourth-grader from Texas.
Noah is a celebrity of sorts. The 9-year-old's command of presidential trivia has earned him several appearances on the "Tonight" show, and last year he bested Howard Dean in a quiz - insert punchline here.
Yes, we've come to the point where what is arguably the biggest domestic policy debate in the past 50 years is being handled by a child trivia-champ. Don't miss next week when Ken Jennings of "Jeopardy" explains how the president's foreign policy is a winner. And coming in April, a tap-dancing squirrel tours in support of tax reform.
This town's tether to reality is often frayed, but the opening of 2005 has been something to watch, even by Washington standards, with the Social Security debate proving to be the most surreal main show.
President Bush has taken the extraordinary step of bringing a problem to the fore, the pending solvency predicament with Social Security, and traveled the country to talk up his plans for fixing the problem. Except that his staff can't say how or even whether the solution will fix the problem in the long run. In fact, they can't even really say what the plan is and how it will work, but they promise it's really good - a truly novel approach to sales.
One of the biggest issues with the president's plan is the trillions of dollars it is likely to cost at a time when the nation is running record deficits.
But don't worry, there are solutions, of sorts, for that sticky issue, too.
Last week at a Monitor breakfast with reporters, Newt Gingrich told the assembled that it was high time the nation got the budget back in balance. He also said he was in favor of the president's Social Security plan.
How did he square those two positions?
Easy, he said, you just do the Social Security plan off-budget - meaning you just don't count the money against the deficit.
Mr. Gingrich's idea is ingenious, and would have so many applications outside the government. Thinking of buying a new car? Go right ahead. When the loan company comes around, simply tell them the purchase was off-budget.
Meanwhile, as this discussion goes on, the Democrats have taken a bold stand by saying ... basically nothing.
Oh, they want to preserve the system and they won't let Mr. Bush destroy it and they're sure it can be fixed with minor tweaks here and there, but they'd really rather not discuss any specifics.
They're convinced the president has bitten off more than he can chew on Social Security and are content to watch him struggle.
But the president isn't all wrong. Social Security isn't in "crisis" and there are more pressing issues on the national horizon - starting with Medicare - but Social Security has structural problems and it would be easier to do something about them now than 20 years down the road.
The problem is no one in this town is truly leading - that is, discussing the situation like an adult. The president is out traveling the country offering magic beans that he can't even pay for, and the Democrats are off to the side chuckling to themselves and counting the days to midterm elections.
Political leaders refusing to deal with reality isn't exactly a new phenomenon, but the speed at which this year has gotten off-course is extraordinary.
That's not to say there will be no Social Security reform in Bush's second term. The man has a way of getting things done.
But unless something in the tone and tenor changes, unless someone or some group comes forward and discusses the problems honestly - paging the Democratic and, especially, the Republican moderates, who actually have some power - whatever gets passed is likely to be a mess.
And that's a problem, because the stakes are high this time.
The public is tuned into the Social Security debate and probably willing to accept some changes - perhaps even the inevitable pain of higher retirement ages, higher taxes, or lower benefits.
If nothing is done, voters will walk away and throw up their hands talking about "Washington as usual."
If a bad bill gets through - one with the president's precious accounts but no long-term solvency plan or one that simply isn't paid for - voters will think the problem is solved even as it deepens.
You don't have to be a 9-year-old trivia wiz to understand that neither of those options is advisable.
And if either of them becomes a reality, the fallout will be felt well beyond the next four years.
• Dante Chinni is a senior associate with the Pew Project for Excellence in Journalism. He writes a twice-monthly political opinion column for the Monitor.
Nice link to CNSnews there, possibly the worst news site on the net. Can't say that I'm surprised that you'd link to it, though.
Not everyone is as optimistic about the Galveston Plan, unsurprisingly.
Quote:Plan gets a preview in Texas
Does Bush-style Social Security system work? The answer varies
HOWARD WITT
Chicago Tribune
GALVESTON, Texas - For all the uncertainty swirling around President Bush's proposal to offer private Social Security retirement accounts, there is a corner of the country where the idea has already been tried and tested for a generation.
Three Texas counties hugging the Gulf of Mexico voluntarily withdrew from the federal Social Security system in 1981, transferring the retirement taxes of county employees into private investment accounts.
That's the good news: As the nation prepares to debate a momentous potential change in the bedrock federal retirement plan, there are some real-world experiences in Texas available to be studied as test cases.
The bad news is that the verdict is decidedly inconclusive. No one here can agree whether county retirees are better off than they would have been had they stayed with the Social Security system -- a dilemma that precisely mirrors the emerging complexities of the national Social Security debate.
"I didn't come out ahead," said Evelyn Robison, who was the Galveston District Court clerk for 13 years before her retirement in 2004. "My chief deputy did not come out ahead. My bookkeeper did not come out ahead. I personally don't know anyone who has retired who came out ahead."
Nonsense, countered Rick Gornto, a Houston financial manager who designed the alternate retirement plans for Galveston, Brazoria and Matagorda counties and still runs them.
"In every case we ever looked at, people end up better off in our plan," said Gornto, president of First Financial Benefits.
What is being called the "Galveston plan" is being scrutinized by proponents and opponents of Social Security private accounts as they look for models to make their respective cases. In the past week, House Majority Leader Tom DeLay, R-Texas, paid a visit here to learn more about the plan, while Sen. Barbara Boxer, D-Calif., phoned Galveston officials for information.
What intrigues most callers is the claim made by boosters of the Galveston plan that retirees can earn benefits that are two to four times higher than those provided by the Social Security system, without higher costs or greater risks.
"I think what we have here is a model for the rest of the country," said Ray Holbrook, a retired Galveston County judge and one of the original proponents of the plan. "The philosophy behind it is that we're better off if we fund our own retirements."
The three Texas counties set up their alternate retirement plan at a time when local and state government entities were permitted to withdraw from Social Security. Few actually did, according to the Social Security Administration, and in 1983, Congress closed the window, leaving the Galveston plan as an unusual orphaned model.
Under the plan, which covers some 5,000 employees in the three Texas counties, workers contribute a mandatory 6.1 percent of their gross salaries to their private retirement accounts, while the counties employing them add 7.8 percent, for a total of 13.9 percent. That compares with a combined 12.4 percent Social Security contribution, divided equally between employees and employers.
Most of the funds are then invested in a combination of bank securities, bonds and annuities, where Gornto says they are currently earning an average 6 percent return.
That's a more conservative approach than what President Bush has proposed -- allowing younger workers to divert up to 4 percent of their pay from Social Security into investments in the stock and bond markets -- and Galveston officials say it was key to persuading county employees to quit the safety of Social Security for the private accounts.
"We probably never would have been successful if we'd said we were going to invest in the stock market," Holbrook said. "We assured employees it would be in safe investments, bonds and annuities."
When workers here retire, they can elect to have their accounts paid out as a lump sum, a series of payments or a lifetime annuity.
The plan also includes a substantial death benefit, ranging from $75,000 to $215,000 depending on a worker's salary.
Gornto's figures show that workers across all income levels do better under the Galveston plan. For example, Gornto says that a low-income county worker retiring at age 65 would receive just $683 a month from Social Security but more than $1,000 a month from the Galveston plan. Employees earning higher incomes can do at least twice as well as under Social Security, according to Gornto's calculations.
But there is substantial debate about those numbers. Two separate studies of the Galveston plan conducted in 1999, by the Social Security Administration and the federal General Accounting Office, each concluded that many low- and medium-income workers actually fare worse under the Galveston plan than they would have under Social Security, while the highest-paid employees do better.
Critics maintain that instituting private accounts similar to Galveston's for all workers would cause harm for many.
A plan where the lowest-paid employees do worse, and the highest-paid do better? Wait a minute,
TWO different studies showed this? Gosh, that doesn't sound like something a Republican would propose, now does it?
Sheesh.
Cycloptichorn
Note that the USANext group quoted in your article, Baldi, is the one who backed the SBVfT, and is currently running the anti-AARP ad campaign. Hardly what you would call an impartial judge of the plan.
All this reminds me of a story I read a while back... where was it... oh, yeah, here it is:
http://seattletimes.nwsource.com/html/localnews/2002075044_repubs28m.html
Quote:Fund-raising group milks vulnerable senior citizens
Copyright 2004, The Seattle Times Co.
By David Postman and Jim Brunner
Seattle Times staff reporters
E-mail this article
Print this article
Search archive
Most read articles
Most e-mailed articles
Related stories
Group uses many tactics in mailings
Other links
Excerpts of the letters
But all of those groups, according to the small print on the letters, were simply projects of the College Republicans, who collected all of the checks.
And little of the money went to election efforts.
Of the money spent by the group this year, nearly 90 percent went to direct-mail vendors and postage expenses, according to records filed with the Internal Revenue Service.
Some of the elderly donors, meanwhile, wound up bouncing checks and emptying their bank accounts.
"I don't have any more money," said Cecilia Barbier, a 90-year-old retired church council worker in New York City. "I'm stopping giving to everybody. That was all my savings that they got."
Even
college republicans rip people off!!! This is ridiculous.
Cycloptichorn
Cycloptichorn wrote:Note that the USANext group quoted in your article, Baldi, is the one who backed the SBVfT, and is currently running the anti-AARP ad campaign. Hardly what you would call an impartial judge of the plan.
All this reminds me of a story I read a while back... where was it... oh, yeah, here it is:
http://seattletimes.nwsource.com/html/localnews/2002075044_repubs28m.html
Quote:Fund-raising group milks vulnerable senior citizens
Copyright 2004, The Seattle Times Co.
By David Postman and Jim Brunner
Seattle Times staff reporters
E-mail this article
Print this article
Search archive
Most read articles
Most e-mailed articles
Related stories
Group uses many tactics in mailings
Other links
Excerpts of the letters
But all of those groups, according to the small print on the letters, were simply projects of the College Republicans, who collected all of the checks.
And little of the money went to election efforts.
Of the money spent by the group this year, nearly 90 percent went to direct-mail vendors and postage expenses, according to records filed with the Internal Revenue Service.
Some of the elderly donors, meanwhile, wound up bouncing checks and emptying their bank accounts.
"I don't have any more money," said Cecilia Barbier, a 90-year-old retired church council worker in New York City. "I'm stopping giving to everybody. That was all my savings that they got."
Even
college republicans rip people off!!! This is ridiculous.
Cycloptichorn
Regardless of who the guy is, it is still a peice on the Gavalaston Plan. Would you rather have the link from the Chicago Trib? I have one of those as well. The brass tacks of the matter are that there is a chance that SS reform will work, we should at least try it. There is success on the matter and remember, it is a choice. If you don't want to go into the program then you don't have to. How about you let those of us who want the chance of going into the proram of having that choice.
Chicago Tribune
Did you read my piece on how many claim the plan makes less money for poorer workers than SS would?
Quote:If you don't want to go into the program then you don't have to. How about you let those of us who want the chance of going into the proram of having that choice.
You don't get it yet, do you?
The program is a lie. It doesn't make more money for poor people at all. But they try to sell it to the uneducated and poor as if it will.
The problem isn't that
I won't buy into the plan, it's that millions of people who don't know any better will, and all that money is going to be drained out of SS, which is not only for ourselves, but also to
help others. I know that's a difficult concept for some people to understand, but it really is neccessary.
Not only is the Galveston Plan flawed severely, according to TWO seperate reports on it, but the whole idea seems quite shaky. Conservatives love to point to Chile as a success; but is it?
Quote:Poor Chileans labor past retirement
Private pensions offer no safety net
By Indira A.R. Lakshmanan, Globe Staff | February 28, 2005
SANTIAGO, Chile -- Irma Moya Benech has worked 40 years in public hospitals caring for the sick and elderly, and now that she is both, she says the state is not taking care of her.
ADVERTISEMENT
Already five years past the legal retirement age for women in Chile, Moya, 65, continues to toil as a medical technician for patients with AIDS, tuberculosis, and other infectious diseases, though her immune system is weak from radiation therapy for breast cancer. She desperately wants to retire but can't, she said, because her private pension would be less than 30 percent of her $1,738 monthly salary. She would no longer be able to afford quality health insurance to cover chemotherapy and prescriptions.
Her 71-year-old husband, who has leukemia, is still working as an accountant at the University of Santiago, because his pension would be only 20 percent of his $2,127 monthly salary.
''I think we have done our duty and should be allowed to rest after working for 40 years," Moya said, tears streaming down her face.
At a time when President Bush has made overhauling Social Security a central objective of his second administration, he and other proponents of privatization have held out Chile, the first in the world to privatize pensions in 1981, as a role model.
By transforming its system, this country of 16 million people fended off a looming pension debt owed its aging population and fueled domestic capital markets, contributing to high growth rates and a halving of poverty in what has become one of the most affluent nations in Latin America. For steadily employed Chileans who consistently channel 10 percent of their salaries into private retirement accounts, as required by law -- and preferably top it up with more, tax-free contributions -- pensions could reach 70 percent of salaries, providing a comfortable standard of living in retirement, according to estimates by the pension fund managers' association.
But what supporters of Chile's model have not advertised is that for poor, seasonal, and itinerant workers, and even for a great part of the middle-class and self-employed, the private system has proved inadequate, largely because those workers are unable to contribute enough to their private accounts. More than 17 percent of Chileans 65 and older keep working because their pensions are inadequate, according to a government-commissioned study.
Based on Chile's experience -- and that of more than 20 countries mostly in Latin America and Eastern Europe that followed its lead by privatizing part or all of their pension systems -- one conclusion from a new World Bank report is that the government will have to play a bigger role in any reformed pension system than proponents of privatization suggest. Private accounts can be one pillar of a Social Security system, but the state will have to provide a safety net. Continued...
There's two more pages inside the link..
http://www.boston.com/news/world/latinamerica/articles/2005/02/28/poor_chileans_labor_past_retirement/
There's a great amount of evidence that this plan will benefit the rich much, much more than it will the poor; but it's being sold to the poor as a way to save SS, as well as a way to save them money. Both are false propositions.
Cycloptichorn
Well lets put it to you this way, if people are going to go into the plan and they loose money then I guess it would be their faults. Why do you insist on protecting people form themselves? If you continue to protect people from their own stupid mistakes then they will never learn.
Baldimo - Aren't you supposed to be training to go protect Bush from his stupid mistake?
Quote:Well lets put it to you this way, if people are going to go into the plan and they loose money then I guess it would be their faults. Why do you insist on protecting people form themselves? If you continue to protect people from their own stupid mistakes then they will never learn.
Protecting people from their stupid mistakes is the
entire point of Social Security!
SS is there so no matter how bad you mess up, you'll recieve a little money to help you out when you are old. That's it. It's not an investment, it's not there to give you a comfortable retirement.
This takes considerable pressure off of society when it comes to the question: what do we do with our old folks? It seems you are suggesting that we don't do anything about them, and that's okay, if you're okay with things like starvation and massive crime due to people stealing before dying.
Cycloptichorn
More evidence of how weak the SS proposal really is:
Pro-privatization Social Security experts on TV are paid for by the right
Media Matters for America analysis of guests who have appeared on cable or network news since the November 2, 2004, election to discuss Social Security failed to find one independent expert with a graduate degree in economics who supported allowing workers to divert Social Security payroll taxes into private accounts.
Media Matters found eight guests who held graduate degrees in economics; three supported privatizing Social Security, and five opposed it. While all five opponents of privatization are supported by independent universities and organizations, all three privatization proponents are funded by right-wing organizations and foundations.
http://mediamatters.org/items/200502240008
Yup. Precisely the technique.
Poll: Bush slips on Social Security
Number of those who say retirement plan needs fixing in the next two years falls to 38% from 49%.
March 1, 2005: 7:24 AM EST
NEW YORK (CNN/Money) - President Bush has lost ground in the public relations battle over Social Security since he kicked off a concentrated campaign two months ago to convince Americans the national retirement program needs an immediate overhaul, according to a recent poll.
A CNN/USA Today/Gallup poll conducted Friday to Sunday said 38 percent of Americans feel major changes must be made in Social Security within the next two years. In January, that number was 49 percent.
Bush has made reforming Social Security, which includes a contentious plan to put some of the program's money into the stock market, a key part of his second-term agenda.
Other numbers in the poll don't play out so well for the president, either. Forty-seven percent of those polled trusted the Democratic Party to deal with the issue of Social Security benefits, while 37 percent trusted Republicans.
And 75 percent held a favorable opinion of the AARP, the retirement association that has taken a lead role in opposing the president's plan.
However, 75 percent of those polled said major changes to Social Security are needed within the next ten years.
Yup. Precisely the technique.
Too right, Blatham. It is their technique; an assault from all sides while continually bitching about how the media is too liberal.
I'd love to see the Social Security dept. actually conform with the FOIA act they were presented with and fess up as to how many others are being paid to promote the pres' ideas...
Cycloptichorn
Too bad for Bush, it doesn't seem to be working so well.
http://money.cnn.com/2005/03/01/news/economy/social_security_poll/index.htm
Quote:Poll: Bush slips on Social Security
Number of those who say retirement plan needs fixing in the next two years falls to 38% from 49%.
March 1, 2005: 7:24 AM EST
NEW YORK (CNN/Money) - President Bush has lost ground in the public relations battle over Social Security since he kicked off a concentrated campaign two months ago to convince Americans the national retirement program needs an immediate overhaul, according to a recent poll.
A CNN/USA Today/Gallup poll conducted Friday to Sunday said 38 percent of Americans feel major changes must be made in Social Security within the next two years. In January, that number was 49 percent.
Bush has made reforming Social Security, which includes a contentious plan to put some of the program's money into the stock market, a key part of his second-term agenda.
Other numbers in the poll don't play out so well for the president, either. Forty-seven percent of those polled trusted the Democratic Party to deal with the issue of Social Security benefits, while 37 percent trusted Republicans.
And 75 percent held a favorable opinion of the AARP, the retirement association that has taken a lead role in opposing the president's plan.
However, 75 percent of those polled said major changes to Social Security are needed within the next ten years.
11 points slippage in just a month. My, my.
Over 10 points higher preferring Democrats to deal with SS. My. Without a plan, even.
Cycloptichorn
You can fool some of the people all of the time and all of the people some of the time but you can't fool all of the people all of the time. That is what the republican members of congress are finding out from their meetings with constituents.
http://www.washingtonpost.com/wp-dyn/articles/A64253-2005Mar1.html?referrer=email
Q&A: The great Social Security debate
The Monitor examines eight frequently asked questions on this hot-button issue.
http://csmonitor.com/2005/0303/p01s04-uspo.html
Senators May Block Social Security Vote
By Charles Babington and Jim VandeHei
Washington Post Staff Writers
Friday, March 11, 2005; Page A01
President Bush's bid to add individual accounts to Social Security faces such formidable opposition in the Senate that its supporters may be unable to bring it to a vote, according to a Washington Post survey of senators.
An overwhelming majority of Democratic senators said they will oppose, under any circumstances, Bush's plan to allow younger workers to divert a portion of their Social Security payroll taxes into individual investment accounts that would follow them into retirement. A few others said they will not support such accounts if they require substantial government borrowing. Even many Republicans say that is inevitable because the alternative involves unacceptably large cuts in benefits or tax increases to replace the diverted taxes or both.
Combined, these Democrats form a coalition large enough -- more than 41 members -- to use delaying tactics to keep the proposal from reaching a vote in the 100-member chamber. The Post survey of the Senate's 44 Democrats and one Democratic-leaning independent indicates there are at least 42 -- and perhaps 44 -- who firmly oppose personal investment accounts, particularly if they are financed with borrowed money.
http://www.washingtonpost.com/wp-dyn/articles/A25304-2005Mar10.html?referrer=email
Now perhaps they can get down to the true issue. The solvency of the system in future years.
Yes, Bush has over-reached. Not even the Republicans in Alabama want to be seen with him:
Quote:Republicans hold seven of the nine seats in Alabama's congressional delegation, but most of them won't be joining President Bush when he visits Montgomery on Thursday to promote his Social Security plan.
They cite a busy schedule in Washington as the reason for not joining the Republican president at Auburn University Montgomery, but political observers say attendance by the GOP congressmen would be much higher if Bush were promoting a popular program.
"They don't want to be associated with it at this point because it's so fluid," said William Stewart, a political scientist at the University of Alabama who voted for Bush last year.
"There's a down side for them to be here and no up side," said Carl Grafton, a political scientist at AUM and another Bush voter.
Tuscaloosa News
Let's see if the damned liberal media paints this a failure as big as Clinton's national health care plan.
The difference is that Clinton's health plan had some merit and was attacking the problem. Bush's SS plan was ill conceived since it was not even in the same ballpark in attacking the one faced by the program.
