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Politics : Al Gore vs George Bush: the moderate's perspective -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (3507)	10/24/2000 7:44:27 AM
From: John Carragher	Read Replies (1) \| Respond to of 10042

On Social Security, Bush offering the superior plan I wasn't going to write about Social Security in part because I figured I knew what was going to happen. When push came to shove, the baby boom generation would do the same thing it has done whenever it faced any personal or public policy crisis: Stick it to its kids. And that may still happen, but for the moment we should rejoice over the fact that at long last we are having an open debate over Social Security that includes many, if not all, of the available options. It's worth noting that only a few years ago Social Security was such a treacherous issue that such a debate seemed impossible. Now we have both candidates proposing that as part of the Social Security system individuals would be allowed to have personal retirement accounts. These plans are important not just because they represent ways to solve the crisis soon to be created by the declining number of workers per retiree, but also because they will give all Americans a chance to do something only the rich could do easily in the past: accumulate wealth. Both have gaps and deficiencies, but I like Bush's plan better. Gore's plan, which would allow taxpayers to make contributions to an account in addition to the Social Security taxes they currently pay, would help only people who could make that additional contribution. Even by the Gore campaign's own estimates, only 62 percent of taxpayers would choose to participate. Under Bush's plan, any young worker could have an account, funded with a portion of what he or she is paying now in Social Security taxes, as well as basic Social Security benefits. Gore has charged that Bush's plan is a trillion dollars or so short of being able to fund the individual accounts and pay the benefits owed during a transition period when both methods would have to be fully funded. The debate hasn't been fully joined because Bush has apparently decided that a full explanation of how he proposes to finance the transition period exceeds the attention span of the American voters (and, who knows?, possibly his own). It would require a complex, and possibly controversial discussion of how he would invest the Social Security surpluses now coming in, and require the admission of certain possibilities on which Gore could demagogue him to death. For example, Bush has not ruled out the possibility of reducing benefits in some reasonable and gradual fashion. There's every reason to believe, however, that his concept can work. There are a number of personal-account plans, including one introduced by Democratic Sens. Daniel Patrick Moynihan and Bob Kerrey. Their plan would set up personal accounts in much the same way Bush would and reduce benefits chiefly by changing the way benefits are currently adjusted for inflation. This wouldn't cause much pain because (most economists believe) the present method overstates inflation. The Moynihan-Kerrey plan has passed fiscal muster with several different panels. Bush, who proposes to use a bipartisan panel to decide such questions, could use a similar approach. And whatever omissions or shortfalls may be contained in the Bush plan, they are small compared to what's missing from Gore's. A recent review of all the new plans by Economic Security 2000, a Washington-based bipartisan group advocating Social Security reform, calculates that Gore's plan is short about $10 trillion. That report also indicates that Gore hugely underestimates the cost of his proposal to match contributions to individual accounts with federal dollars. Ultimately, Bush's plan might require some borrowing - a possibility he dares not broach, but which shouldn't be out of the question. Such borrowing would be a beneficial investment to bring about long-term change for the good. Moynihan has pointed out that Franklin Roosevelt had always intended that Social Security should be a system of personal accounts that politicians couldn't fiddle with. America couldn't afford that during the Great Depression. We can now. David Boldt's column appears on Tuesdays and Fridays. His e-mail address is dboldt@compuserve.com