THE PLANK SEPTEMBER 15, 2008
In her interview late last week with Charlie Gibson, Vice Presidential
nominee Sarah Palin made some less than savvy remarks about entitlements (which,
are “agencies” that must be “challenged to find efficiencies and spend other
people’s money wisely”). Foremost among the big three entitlements, at least
electorally, is the Social Security program, which Palin’s running mate John McCain
has called “an
absolute disgrace.” McCain has never clarified in which respect the program is a disgrace, merely ducking questions on which taxes he might raise, or benefits he might cut,
in order to pay for his budget.
As of this morning however, there seems to be
less cause to sniff at the 73-year
old program. UChicago public health specialist Harold Pollack, writing
at HuffPo, notes that Social Security “may be the only area of government that that's not in
fiscal crisis right now.” Pollack takes us back to the long-running fight over the long-term health of Social Security:
Will this system survive? It's natural to wonder.
Conservatives do their best to stoke our fears, presenting Social Security as a
looming crisis by lumping it in with Medicare and Medicaid. In one of many
examples, the Heritage
Foundation warns of “trillions in future costs associated with Social
Security, Medicare, and Medicaid, which the CBO projects could push the federal
public debt to nearly 300 percent of GDP by 2050, and over 850 percent of GDP
Scary stuff. And it's not only conservatives trying
to worry us. The front page of the July 8 Washington Post concluded "Candidates
Diverge on How to Save Social Security." As the lead paragraph
breathlessly put it, "Sens. Barack Obama and John McCain are both
proposing dramatic changes to Social Security, taking on the financially
fragile 'third rail of American politics' that Congress and recent presidents
have been unable to repair."
I’m no expert, but wonder what on earth would have happened
had the Social Security system been privatized, as was advocated by McCain in 2004 and again as recently as March 2008.
With which tools would taxpayers have decided which trusty American
investment house (a Lehman, or a Bear Stearns) would get their money? Would any
of the gargantuan risk factors associated with such an investment have been
transparent back then?
I think taking a swing (as
Dean Baker has) on the games McCain-Palin is willing to play with Social
Security is a useful back-to-the-kitchen-table strategy for the Obama campaign.
If nothing else, an attack on this point allows voters over 50 who are fretting about both
their retirement security and voting
for a black man, to feel a little more certain that the Democratic
candidate and his campaign have their interests in mind.
Update: Ezra Klein makes the same point over at TAP:
Three years ago, John McCain signed on to George W. Bush's efforts to
privatize Social Security. He surveyed Wall Street and decided that it
was a stable enough institution to entrust with the nation's pension
funds. Three years ago. And this wasn't just an attempt to cozy up to Bush: McCain was arguing for privatization in 1999.
So McCain's argument is that Wall Street is built atop an unstable
regulatory foundation and is shot through with most of the seven deadly
sins. That the situation has been allowed to fester so long is evidence
that "people were asleep at the switch." Even so, McCain has
consistently argued that much of Social Security should be turned over
to...Wall Street. Either he wanted to tank the nation's pensions funds
or he was one of the people asleep at the switch. But those are really
the only two options here.