The truth about Social Security's future

Posted: Tuesday, May 16, 2000

The following editorial appeared in today's edition of the Washington Post:

George W. Bush presented himself this week as the candidate who is prepared to be candid with the American people about the future of Social Security and Medicare. But it then turned out that what he meant by candor was little more than the appearance of it. Mr. Bush gets points for having announced up front that he favors the partial privatization of Social Security - letting individuals keep and invest for retirement a share of what are now their Social Security taxes. In that sense, he has indeed been forthright.

But he just as quickly forfeits the points, and more, in our view, by suggesting that the investment scheme he dangles would be free of both risk and cost. You wonder, if it's that painless, why a generation of risk-averse politicians hasn't long ago adopted it. There's an answer to that, and it is not, as Mr. Bush asserts, that they trust ``only government'' while he trusts ``individual Americans.''

The governor is right that ``Social Security is ... a test of presidential candidates - a measure of seriousness and resolve.'' ``Too many candidates have traded on the problems of the system,'' he said Monday. ``I am here with a message for America, and to put my opponent on notice. The days of spreading fear and panic ... of delaying, dividing and demagoguing are over.''

Mr. Bush says the problem with Social Security is that the revenues in sight won't cover the costs as the baby boomers retire. He notes that the same is true of Medicare. He then promises not to raises the taxes on which the programs depend, but implies that there would be no cuts in benefits either. Indeed, in the case of Medicare he proposes, as does Vice President Al Gore, to add a costly prescription-drug benefit, even as he insists that ``any reform must ensure the solvency of Medicare.'' But solvency how? A line in the speech suggests he might be willing to countenance some income-testing. ``Medicare must offer comprehensive coverage for low-income seniors,'' it says, leaving open the question of what it might offer others. But the idea isn't developed further.

In Social Security's case, he says he wouldn't cut the benefits of current or imminent retirees even while diverting to investment accounts for younger workers some of the taxes needed to pay those benefits. The projected Social Security surplus will cover only part of the difference. How in the spirit of candor does he make up the rest? Mr. Bush is right that Al Gore has evaded serious discussion of Social Security's - and Medicare's - long-term finances. Sad to say, Mr. Gore is not alone.



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