Congressional Democrats have united in complete opposition to President Bush's ideas for Social Security reform. Whatever the pros and cons of various approaches to change, we can always count on the Left to demagogue this issue in particular.
One word being used often in their talking points: "guarantee." For example, here's buzzing from Senate Minority Leader Harry Reid:
"There's a lot we can do to improve Americans' retirement security, but it's wrong to replace the guaranteed benefit that Americans have earned with a guaranteed benefit cut of up to 40 percent."
Economist and Wall Street Journal contributor Susan Lee, speaking on public radio program Marketplace, explains clearly how Social Security is just another program. There ain't no "guarantee," which illustrates the most fundamental problem: it's not "your" money in any way. And that's why the Left can't tolerate the idea of private accounts. Once it's your money again, they can't touch it.
[R]ight now Social Security benefits are nothing more than political promises. Despite all the words like "trust fund" or "old age insurance," these benefits have no legal standing. Congress can cut them any time, and Congress has.Back in 1983, Congress cut benefits by raising the retirement age gradually from 65 to 67. The Supreme Court has sanctioned the idea that benefits have no legal standing twice already. In Helvering v. Davis, the Court ruled that Social Security is a welfare program under Congressional control. And in Fleming v. Nestor, the Court found that contributions were tax payments, pure and simple, and that doesn't entitle taxpayers to benefits.
Surprised? Well, I was - until I logged onto the website of the Social Security Administration, where I found this explanation:
Benefits, the site tells us, are only earned in a moral or political sense. Congress can make the rules more generous or more restrictive whenever it wants. But private accounts amount to private property and private property is protected under the Fifth Amendment against unlawful taking. So all contributions to the account and returns on investments in the account would constitute a privately-owned asset. Unlike the Social Security benefit, owners of private property in the form of private accounts could pass them on to heirs as bequests when they die.
Of course, in the Bush Administration's vision, individuals woudn't be free to invest in anything they wanted. The government will likely restrict investments to a conservative mix of stocks and bonds. That minimizes investment risks and assures that retirees won't be left holding an empty bag.
Sure, there are lots of problems with the creation of private accounts. But having your retirement money taken away from you, however much there is of it, isn't one of them.
So, keep your wits about you as the Washington windbags debate your future.
Posted by Alan at February 5, 2005 03:46 PM