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Jewish World Review Oct. 26, 2000 / 27 Tishrei 5760

Morton Kondracke

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What's Gore's Social Security plan? -- FAILING TO CATCH Texas Gov. George W. Bush in the polls, Vice President Al Gore is unsheathing the Democrats' favorite weapon of last resort against Republicans --- Social Security.

Gore lacks a coherent plan of his own to save the retirement system from eventual bankruptcy, so he is launching an all-out blitz on Bush's proposal to allow younger workers to invest part of their Social Security taxes in private markets.

The Democratic National Committee broadcast ads in 10 states last week attacking Bush's plan and held press conferences and other events in 14 states.

DNC Chairman Joe Andrew said Bush thought he could "grab the third rail of American politics," but "he didn't realize we hadn't turned the electricity on yet."

Andrew's statement was virtually an admission that, when the going gets rough for Democrats, they resort to accusing Republicans of menacing Social Security, the government's most popular program.

Polls indicate that Gore has failed to catch up to Bush since their third debate last week. Thursday's Gallup poll showed Bush's lead widening to 10 points. Bush pollsters say they think he leads by 5 points nationally and that GOP tracking polls show him ahead by more than the margin of error in several battleground states, including Michigan, Missouri, Washington and Oregon.

They also claim that Bush leads, but within the margin of error, in Florida and Wisconsin, and is narrowing Gore's lead in Pennsylvania and California. Gore's California chairman has confirmed that the race is tightening there.

Bush's Social Security plan, unveiled in May but not well explained since then, is an attempt to deal with the fact accepted by most economists that the retirement of the baby-boom generation is a burden that the Social Security system cannot bear without significant benefit cuts, tax increases or major reform.

The number of retirees is set to nearly double in the next 30 years, from 45 million to 83 million, and the number of workers being taxed to provide benefits for each senior will fall from three to two.

According to the government trustees who oversee Social Security, at current benefit and revenue levels, the system will have a surplus for 15 years -- figured at $2.4 trillion for the next 10 years -- but in 2015 it will start paying out more than it takes in.

The system will be drained of funds in 2037, building huge deficits after that -- estimated at up to $8 trillion by 2075.

Gore's answer to the problem is to assert that through fiscal frugality he can pay down the nation's non-Social Security debt of $4.6 trillion by 2012 and then credit to Social Security the interest saved by not borrowing that money.

He claims this will extend the solvency of Social Security to 2054. He has no long-run proposal to keep the system solvent, and the idea of crediting interest has been hooted at as double counting even by many Democrats.

The best non-partisan analogy I've heard for Gore's plan comes from Dan Crippen, director of the Congressional Budget Office, who told me in May, "It's like if I go to the Price Club and the checkout guy says, 'You just saved $50 by shopping here.' If I say, 'So credit the $50 to my credit card,' he'd laugh."

To keep the system solvent by traditional means requires one or more of the following: an increase in payroll taxes (as has happened often before) from the current 12.4 percent to 17 percent in 2037, a 30 percent benefit cut or an extension of the retirement age.

Instead, Bush has picked up a reform idea -- partial privatization -- backed by several moderate Democrats, including Sens. Daniel Patrick Moynihan (N.Y.), Bob Kerrey (Neb.), John Breaux (La.) and Chuck Robb (Va.).

The concept also has the support of the centrist Democratic Leadership Council and was backed by its chairman, Sen. Joe Lieberman (Conn.), who recanted his position when he became Gore's running mate.

The theory behind such a plan is that money invested in private markets will return an average of 6 percent per year instead of 2 percent earned by government bonds, thereby reducing the drain on Social Security. The problem is that when younger workers invest part of their tax money -- 2 percent of the 12 percent in most plans -- it can't be paid out to current retirees.

That's the basis of the Democrats' allegation that Bush has promised $1 trillion in Social Security revenues both to retirees and to workers. "Which promise will he break?" a Democratic ad asks.

By adopting worst-case assumptions about Bush's plan, the Gore campaign asserts it will start depleting the Social Security surplus in 2005 instead of 2015 and render the system bankrupt by 2023 instead of 2037.

The Bush campaign counters that, with a $2.4 trillion surplus, Social Security can afford a $1 trillion shortfall -- although aides also say the system may require a "bridge loan" from the government around 2030.

They also admit that it may be necessary to reduce Social Security benefits by some portion of the extra money workers earn in the stock market.

Bush is being punished for not having adequately explained his program over the past six months. But that beats having no plan at all.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.


10/18/00: While Bush, Gore debate surplus, Congress spends it
10/16/00: Two debates leave lots of questions
10/03/00: What questions should be debated?
09/28/00: Gore and Bush should prepare to lead
09/19/00: Bush let values issue slip away
08/25/00: Gore hands center to Bush
08/22/00: AlGore, look to future, not to Bubba
08/08/00: 2000 race could leave high road for low
08/03/00: Convention must point Bush to center
08/01/00: GOP Readies 'Debt Lockbox' As 2000 Strategy
07/27/00: Cheney adds heft to GOP ticket
07/25/00: Foreign, Defense Policy Deserves Full 2000 Debate
07/20/00: Truman Show: Gore Replays 1948, But Bush Isn't Dewey
07/18/00: Bush Must Fight Gore's Drug Plan As 'Bad Medicine'
07/13/00: Mexico's Election Supports U.S. Action On NAFTA, Bailout
07/10/00: Abortion is good for something --- just ask AlGore
07/06/00: Meet Steve Ricchetti, Bubba's secret weapon
06/30/00: AlGore is down, but is he out?
06/27/00: Social programs caught in election-year game of one-up
06/22/00: Congress Is Near Flunking a Test On School Reform
06/16/00: Doting on the grandparents
06/13/00: On Stem Cells, Bush Has Wrong Pro-Life Stance
06/08/00: Has Gore Caught Bush?
05/26/00: PNTR Vote Could Tell Which Party Fits 'New Economy'
05/23/00: The secret to winning the election: Economic programs
05/18/00: Gore should regroup
05/16/00: McCain's Support Is Tepid, But Lets Bush Focus on Gore
05/11/00: Voters need wonk training
05/09/00: Bush Could Score With Charge That Gore's Too Partisan
04/28/00: Reno's force aids Clinton, not Elian
04/25/00: Should Clinton be indicted?
04/24/00: Can Gore win on Bush tax cuts?
04/18/00: Levin's 'bridge' key to China trade?
04/11/00: Congress, U.S. Voters Still Aren't Ready For Campaign Reform
04/06/00: Bush, Gore Silent As Popular Culture Gets Ever Coarser
03/30/00: Is 2000 Like 1948, 1976 or 1960? Or Is This Unparalleled?
03/28/00: Will Bush, Gore Go for a Better Way To Pick Nominees?
03/23/00: Medicare cutbacks bleed hospitals
03/20/00: Chances Improve That China Trade Will Pass Congress
03/16/00: Lieberman as veep would help Gore
03/14/00: Can Bush, McCain Unite to Beat Gore?
03/09/00: Can GOP Forge Unity After Nasty McCain-Bush Race?
03/07/00: What accounts for McCain's excesses?
03/02/00: 'Debate' Proved Gore Is This Year's Best Gut-Fighter
02/29/00: Surprises! The 2000 GOP race is full of it
02/25/00: Voters want centrist in White House
02/23/00: Gore would hit McCain's record
02/15/00: Will negativity hurt McCain in S.C.?
02/10/00: How hard should Bush hit McCain?
02/08/00: Bush must retool his entire campaign
01/27/00: Could Gore beat Bush as Truman beat Dewey?
01/20/00: Big New Surplus Estimates Could Alter 2000 Politics
12/21/99: Bush improves, everyone panders
12/16/99: Prospects improve for campaign reform
12/14/99: Riots raise free trade as 2000 issue
12/10/99: Gore won GOP 'debate' in N.H.
12/07/99: Election pits Bush cuts vs. Medicare boost
12/03/99: Can race be a constructive issue in 2000?
11/19/99: White House race may be best in decades
11/16/99: Where is Bush on health care fight?
11/11/99: Will TV stop profiteering from politics?
11/09/99: Is GOP isolationist, or just partisan?
11/04/99: Gore, Bradley Run Opposite Races On Style, Substance
11/01/99: GOP, Clinton could reach deal swiftly
10/27/99: Bush to fight 'culture wars' -- positively
10/21/99: Porter, Mack: heroes on medical research
10/19/99: Gore scores among party big shots, but polls go South
10/14/99: Bush critiques could help GOP Congress
10/12/99: Congress can save health care from ruin
10/07/99: Will gun-control cause the GOP to shoot itself in the foot?
10/05/99: Gore moves: Desperate but necessary
10/01/99: Fox, Armstrong make case for NIH
09/28/99: Dems' race brightens Bush's chances
09/23/99: East Timor deflates `Clinton Doctrine'
09/21/99: Buchanan v. Bush? Yeah right
09/17/99: Candidates turn attention to poverty
09/15/99: Bush's education problem
09/09/99: Budget makes 2000 an `issues' election
09/07/99:Airport rage increases, with good reason
09/02/99: U.S. future up for grabs in 2000
08/31/99: U.S. Capitol needs visitor's center -- soon
08/24/99: Will 2000 be the year of the foreign crisis?
08/19/99: Neither party has upper hand for '99
08/17/99: Ford gets freedom medal one month early
08/12/99: There's time to catch Bush, say Gore aides
08/10/99: Rudy, Hillary try much-needed makeovers
08/09/99: GOP must launch new probe of Chinagate
08/02/99: Pols blow fiscal smoke on budget surplus
08/02/99: One campaign reform should pass: disclosure
07/27/99: Gore leads Bush in policy proposals

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