Alan Greenspan On Social Security

Alan to the rescue, sort of.  And Bush opening the door to an increase in the payroll tax cap, sort of (Chuck Schumer is worried that Bush is simply pointing to the trapdoor, and encouraging Dems to stand on it.)

Well - here is a true "One Minute" compromise that may not only make sense, but revive the long abandoned premise of this blog:  lower the transition age for eligibility for personal accounts from 55 to, say, 35.

This will imply much less transitional borrowing, at least early on, and give participants many, many years to reflect on the consequences of their decision and to plan accordingly.

Comments

[GT]

Tom,

But why should there be any compromise on this? Many Dems think that SS provides a basic and needed service and they don't want to see it disappear.

[Joe R. the Unabrewer]

If they drop it to 35, I certainly hope they get their tail ends in gear.

[Big Dog]

Many Dems think that SS provides a basic and needed service and they don't want to see it disappear.

Would these be the same Dems who were demanding that we "save Social Security first" just a few years ago and demanding reforms?

[TM]

But why should there be any compromise on this?

If I were a Dem strategist, I would be smelling victory, and holding out for a clean sweep of the board.

But if Reps put out something reasonable, who knows? And maybe Bush re-spins it as, hey, I'm at least trying to address the Big Issues, despite these obstructionist Dems.

One of my "posts in waiting" is "Bush is a Baseball Guy". The theme will be, in baseball, most home run hitters also are among the league leaders in strike-outs (ignore Bonds, he is hopped up on juice).

SO, Bush is not afraid to swing hard, and if he walks back to the bench shaking his head once in a while, well, so did Babe Ruth.

And at least, twenty years from now, Bush won't be mocked for pushing for school uniforms (Clinton), or for falling short on "the vision thing" (Dad).

Of course, he may be mocked for over-reaching, and getting too little because he tried for too much. Well, c'est la vie, (as Bush will assuredly *not* say).

Hmm, that trailer pretty much exhausts the intended post. Oh, well.

[Creech]

Somewhere here reasonable people could find a compromise. Like maybe those 45-55 could have 2% diverted, those 35-45 could have 4%, those 25-35 6%, etc. The problem with going too low on the age to begin personal accounts is, if twenty years from now, those who weren't included see big gains by those who were allowed, then they will apply political pressure to up their SS benefits because "it wasn't fair" they were excluded. I also think the "full" retirement age should be raised to 70, perhaps for those under 18 today. Of course this all assumes the Democrat reactionaries are "reasonable people" and not merely those who want to turn back the clock to a more socialistic era.

[Crank]

Actually, Bush is a baseball guy politically: like Bonds and the Babe, he tends to just stand there until the other side throws the pitch he was waiting for. And like a good baseball man, Bush knows that it's a long season and you can afford a few losses in April to taste the champagne in October.

Policy-wise, I'm not sure baseball's the best analogy to Bush's ambitious nature, but I'm drawing a blank on what is.

[SteveL]

Thirty five? No I don't like that one bit. That would cut me out of it. The cut off needs to be closer to the current retirement age. But remember, private accounts would be voluntary. We can get the same results because no liberals will use them. Right? I mean if the return is so "risky" and regular SS provides a better payout, as they keep saying, then they should put their money where their mouth is and stick with the original deal.

[Huggy]

Private accounts is a done deal. It will cause a boom similar to the dot com. The new boom will find the answers to our current problems.

[Wally Williams]

Alan Greenspan Memorabilia - Excerpts from his Social Security Commission report to President Ronald Reagan

NATIONAL COMMISSION ON SOCIAL SECURITY REFORM
736 JACKSON PLACE, N.W.
WASHINGTON, D.C. 20503
January 20, 1983
The President
The White House
Washington, D.C. 20500

Dear Mr. President:

I hereby transmit to you the report of the bi-partisan National Commission on Social Security Reform, which has made an in-depth review of the financial condition of the Old-Age, Survivors, and Disability Insurance Trust Funds in both the short range and the long range. The results of our deliberations are contained in this report.

In accordance with Executive Order No. 12335, December 16, 1981, as amended, copies of this report have been sent to the Majority Leader of the Senate, the Speaker of the House of Representatives, and the Secretary of Health and Human Services.

Respectfully submitted,

Alan Greenspan

Chairman

The National Commission makes the following recommendations unanimously:

(1) The members of the National Commission believe that the Congress, in its deliberations on financing proposals, should not alter the fundamental structure of the Social Security program or undermine its fundamental principles.* The National Commission considered, but rejected, proposals to make the Social Security program a voluntary ones or to transform it into a program under which benefits are a product exclusively of the contributions paid, or to convert it into a fully-funded program, or to change it to a program under which benefits are conditioned on the showing of financial need.**

* See additional views of Commissioner Archer in Chapter 4.
** See additional views (with regard to the last point) of Commissioners Archer, Fuller, and Waggonner in Chapter 4.