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Reality check

Voters and lawmakers aren't buying President Bush's Social Security proposal, and there are better ways to really fix the system.

President Bush isn't used to failure when pushing an aggressive agenda through Congress. That could explain the unfamiliar whiff of desperation rising from his sputtering effort to transform Social Security. The public is not buying Bush's argument that market risk needs to be added to the retirement program, and even some Republican allies have broken ranks on the issue.

You know the Bush administration is in trouble when it offers to compromise. Suddenly, Treasury Secretary John Snow is saying private investment accounts don't have to supplant guaranteed Social Security benefits but could supplement them. The administration even says it will consider a (gasp!) tax increase in the form of a higher cap on salaries subject to payroll taxes.

"We are open to good ideas," Snow said.

Here is a good idea: Listen to the public. In recent polls, Americans are clearly saying they don't trust Bush to do right by Social Security. Fifty-six percent of respondents generally disapprove of the way Bush is handling the program, in a recent Associated Press poll. More than half say creating individual investment accounts is a bad idea, and if such accounts mean guaranteed benefits would be cut as Bush proposes, the naysayers rise to 69 percent, according to a New York Times/CBS News poll.

It's a shame Bush has wasted so much energy pushing a scheme that would only make Social Security weaker. Real reform is needed to prepare the system for the coming demands of the aging baby boom generation. Direct steps such as slowing the growth of benefits, raising the payroll tax cap and increasing the retirement age would solve the funding problem far into the 21st century. Bush didn't have the courage to offer such realistic measures, and neither do Democrats.

Instead, Bush clings to the tepid support of private accounts offered by Federal Reserve Chairman Alan Greenspan. To do so, however, Bush has to ignore the more urgent message Greenspan sent Congress the other day: Current budget deficits are "unsustainable."

Greenspan favors spending cuts and even tax increases if necessary to reduce the national debt. "It's the principle that I think is involved here, namely that you cannot continuously introduce legislation which tends to expand the budget deficit," he said. Failure in that effort threatens the economy with "a state of stagnation."

Adding private accounts to Social Security would add trillions of dollars each decade to the deficit, as would making permanent the temporary tax cuts passed during Bush's first term, which both the president and congressional Republicans hope to do. Greenspan favors paying for additional spending and tax cuts with equal reductions elsewhere in the budget - a concept known as "pay as you go" that is not popular in the White House.

Bush vows to fight on for private investment accounts, but it's the wrong battle. Social Security reform should be part of a plan to control national debt, not to make it worse.

[Last modified March 4, 2005, 00:30:22]