Wednesday, November 29, 2006

Bush Open to Bad Social Security Deal

Tim Chapman and Andrew Roth have the news.

'Saving' Social Security by raising taxes, cutting benefits, and not investing retirement funds in the private sector would be a lose-lose situation for the GOP. It would prolong the life of a program that doesn't work and that denies people the benefit of investment in the private sector - which offers returns. (Note: they're not 'higher' returns, because all 'returns' on Social Security revenues merely come from other taxpayers - not from the allocation of the funds to investments that produce growth).

While I think the idea of private accounts is the right way to go, I might be open to another method of investing in the private sector. After all, state retirement funds seem to do OK. To me that might be an acceptable compromise.

But to forego investment in the private sector would be foolish and wasteful.

Politically, this would be a terrible situation for the GOP. Congressional Republicans would either have to endorse the Democratic approach to Social Security reform, or be painted as trying to block the efforts to 'save' the program - an effort which even their own President supports. Politically, there is no upside. It would mean Bush making a bad deal to put luster on his resume at the expense of Congressional Republicans, who actually have to run again.

If the Congressional GOP leadership wants to prove that they deserve their jobs, they will shoot this down right away.

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