Harry Reid's 'Roulette'

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This could have gone into the Social Security thread, but it had degenerated somewhat, so I started a new thread.

Harry Reid's 'Roulette'

Members of Congress are doing very well indeed under a plan comparable to the one President Bush would allow all Americans to participate in.

By George F. Will

Feb. 14 issue - A century ago, American progressives said they aspired to use Hamiltonian means to achieve Jeffersonian ends. They meant they would wield a strong federal government to promote equality. One of George W. Bush's aims with Social Security reform, as with the rest of his "ownership society" agenda, is to use Hamiltonian means for Hamiltonian ends.

Bush wants to use bold federal measures such as voluntary personal retirement accounts, funded by 4 percentage points of Social Security taxes, to encourage citizens to be self-reliant, farsighted, thrifty, industrious and entrepreneurial. The Democratic Party, which traces its pedigree—although little of its current thinking—to Jefferson, likes Bush's idea as little as Jefferson liked Hamilton. What the Democrats currently lack, however, is a leader with even 4 percent of Jefferson's stature.

Last week Howard Dean, almost certainly the next Democratic Party chairman, said: "I hate Republicans and everything they stand for." Either Dean means what he says, in which case he is as unhinged as the rest of the party's Michael Moore caucus, or he does not, in which case he is a blowhard like, well, Moore. Yet for several weeks Dean has been one of the four most conspicuous Democrats on the national stage.

Two of the others have been Ted Kennedy, the shrill essence of East Coast liberalism, and California Sen. Barbara Boxer, who comes from Marin County, a habitat for West Coast liberals who find the city across the Golden Gate Bridge too tepidly "progressive." The fourth, and most important, is Senate Minority Leader Harry Reid, who seems determined to earn the description Teddy Roosevelt applied to President John Tyler—"a politician of monumental littleness."

In December, Reid, speaking about President Bush's proposal for Social Security reform—a proposal Bush had not yet announced—said: "[Republicans] are trying to destroy Social Security by giving this money to the fat cats on Wall Street." Good grief. "Destroy"? The "fat cats" will not get fatter from the estimated 0.3 percent cost of handling the funds.

Reid's hyperbole suggests that Deanspeak is contagious. In Reid's televised "response" to the president's State of the Union address—written before the address—he disparaged the idea of voluntary personal retirement accounts funded by portions of individuals' Social Security taxes as "Social Security roulette." This is the crux of the Democrats' argument against Bush's plan: Equities markets are terribly risky—indeed, are as irrational and risky as roulette. Think about that.

Roulette is a game without any element of skill. By comparing the investment of some Social Security funds in stocks and bonds to gambling on roulette, Reid is saying that the risks and rewards of America's capital markets, which are the foundation of the nation's economic rationality and prosperity, are as random as the caroms of the ball in a roulette wheel. This, from a national leader, is amazing.

It is especially so for a reason Bush delivered with a rhetorical rapier thrust in his State of the Union address. After saying that the 4 percentage points of Social Security taxes could be invested only in a few broadly diversified stock and bond funds, Bush pointedly said to the assembled representatives and senators: "Personal retirement accounts should be familiar to federal employees, because you already have something similar, called the Thrift Savings Plan, which lets workers deposit a portion of their paychecks into any of five different broadly based investment funds." Touché.

Begun in 1987, the Thrift Savings Plan, which as of December 2004 had assets of $152 billion, is a retirement-savings plan open to all civilian federal employees, including senators, and all members of the uniformed services.

They can invest as much as 14 percent of their salaries in one of five retirement funds. Consider the rate of return of C Fund, one of the five. It is a common-stock fund, so it should represent the risks that Reid thinks should terrify Americans:

In only four of 17 years has the rate of return been negative. But in 11 years the rate has been greater than 10 percent, in eight years it has been greater than 20 percent, in four years it has been greater than 30 percent. The compound annual rate of return for the last 10 years has been 12 percent, and the return over the 17 years has been 12.1 percent.

Reid participates in the plan, but opposes allowing all Americans the comparable opportunity that Bush is proposing. But if the numbers just cited are the result of roulette, the legislators should let the rest of us into the game in which they are prospering.

© 2005 Newsweek, Inc.

http://www.msnbc.msn.com/id/6919700/site/newsweek/page/2/

[Auburn85 432]

I'm going to say this again.... It takes 3.3 people to pay for 1 person's SS .

Previous administrations and this one too, have taken money out of SS to go towards the general fund.

If they would have keep their hand off it the last 30 plus years, we wouldn't have this problem. But we do and Bush is trying to save it.

Still haven't heard an answer from dems on SS other than the President will kill SS. It's only going to hurt it not help it. What's the dems solution? Cut SS benefits? Raise the retirement age?

When FDR created this, the life expectancy was only around 68. Now it's around 77.

When FDR created SS, people weren't supposed to receive benefits for a couple of years and then die.

Now people are on SS for 10-20, even 30 years!

In the current system, if you die before 62 and you paid into the system for 40 plus years.... Sorry, the government doesn't give any of it back to the family.

Where has all the SS funds gone from the people that died before they reached the eligible age?

[Auburn85 432]

http://www.lasvegassun.com/sunbin/stories/.../518180143.html

Here's what Reid said about Social Security :huh:

lasvegassun.com>

LAS VEGAS SUN

WASHINGTON -- Republicans are suggesting that Sen. Harry Reid, D-Nev., flip-flopped on the issue of Social Security.

Senate Republican Leader Bill Frist in a Jan. 16 talk show appearance said Reid, the Senate Democratic leader, had voiced support for privatizing the popular federal payroll tax program. President Bush and some GOP leaders have made Social Security changes their top issue in the new Congress.

Reid in recent months has asserted that Democrats would strongly oppose Bush's plan to allow younger workers to funnel some of their Social Security payroll tax into investment accounts.

On Monday, the Republican National Committee issued a press release quoting Reid from a 1999 interview on "Fox News Sunday" as saying, "Most of us have no problem with taking a small amount of the Social Security proceeds and putting it into the private sector."

Reid has never backed diverting Social Security money to private accounts, despite the comment suggesting otherwise, Reid spokeswoman Tessa Hafen said. Reid's 1999 remark may have been in reference to a broader discussion about setting up a retirement program using private accounts -- a program separate from Social Security, Hafen said.

Congress this week began its legislative business for the year, with Reid and Frist on Monday outlining their top 10 priorities. Then the two parties promptly got down to the business of bashing each other.

Reid on Monday called the Democrats' vision for the year the "Promise of America." But Reid's real promise is to block "the American people's priorities," Republican National Committee chairman Ken Mehlman said.

"Considering Reid's record of obstructing the Department of Homeland Security, obstructing medical liability changes and obstructing President Bush's efforts to preserve Social Security, it's clear that Reid and the Democrats would rather engage in partisan politics than work for their constituents," Mehlman said in a press release.

Reid had objected to some rules in the creation of the Homeland Security Department that he believed would hurt federal workers, but he supported the creation of department and elevating its director to a Cabinet-level position, aides said.

Reid decried the early "petty name-calling."

"Democrats have put forward a positive, optimistic agenda grounded in American values," Reid said. "Republicans gave us negative attacks and the same old ideas aimed at stoking up fear and dividing our country."

[Auburn85 432]

Wonder why the Dems didn't jeer at Clinton for claiming that a crisis loomed in SS a few years ago?

But they sure showed great respect to Bush by jeering him during the State of the Union.

Has any president been jeered DURING a State of the Union address, besides Bush?

[Auburn85 432]

http://www.house.gov/apps/list/press/oh10_...h/050111ss.html

Here's Dennis Kucinich's view on Bush's plan for SS

[Auburn85 432]

http://www.msnbc.msn.com/id/6942871/

Apparently some people feel there is no crisis in SS.

[Auburn85 432]

Wonder why Reid was willing to go with a privatization plan in 99, but not now?

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Why won't Reid & the Democrats just let all US Citizens participate in the same retirement plan that congress has?

[TexasTiger 13,023]

Why won't Reid & the Democrats just let all US Citizens participate in the same retirement plan that congress has? 

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Will's conclusion is misleading:

Begun in 1987, the Thrift Savings Plan, which as of December 2004 had assets of $152 billion, is a retirement-savings plan open to all civilian federal employees, including senators, and all members of the uniformed services.

They can invest as much as 14 percent of their salaries in one of five retirement funds. Consider the rate of return of C Fund, one of the five. It is a common-stock fund, so it should represent the risks that Reid thinks should terrify Americans:

In only four of 17 years has the rate of return been negative. But in 11 years the rate has been greater than 10 percent, in eight years it has been greater than 20 percent, in four years it has been greater than 30 percent. The compound annual rate of return for the last 10 years has been 12 percent, and the return over the 17 years has been 12.1 percent.

Reid participates in the plan, but opposes allowing all Americans the comparable opportunity that Bush is proposing.

This is an optional retirement plan separate from what they pay into SS. Congressmen participate in SS like everyone else. The Thrift Savings Plan described is like that at a number of employers. Many Americans already participate in a similar plan in addition to SS.

[Auburn85 432]

http://www.msnbc.msn.com/id/6956156/

House Speaker J. Dennis Hastert (R-Ill.) has warned the White House that voters are not yet ready to accept fundamental changes to Social Security as wary Republicans are cautioning the president to be as vague as possible about his plan.

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White House and congressional GOP tacticians said yesterday that they now see little chance that Bush will issue a detailed plan for partially privatizing Social Security the way he released specific proposals for tax cuts and other major initiatives.

'Information is power'

Key leaders including House Ways and Means Committee Chairman Bill Thomas (R-Calif.) and Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) have urged Bush to speak in general terms about altering Social Security and to leave it to Congress to develop specific proposals.

 

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This contrasts with an earlier Capitol Hill strategy of letting the president take the lead — and take most of the political heat — in pushing for changes in the politically sensitive Social Security program.

"I don't want them [the administration] to do our job, which is create legislation," House Majority Whip Roy Blunt (R-Mo.) said in an interview. "Information is power in this debate, and we're going to see that our members get as much of it as possible."

Party officials said that, at most, Bush may simply refine his principles, calling chiefly for a new way for younger workers to invest part of their Social Security taxes, without any increase in the payroll tax.

Hastert, in an interview with the Chicago Tribune, said significant groundwork must still be done before Congress can think of passing a bill to allow workers to divert part of their payroll taxes from Social Security to stocks and bonds.

Hastert: Senate, Dem support a must

"I have said to the president, I've said it to all of his advisers, and I've said to all of our folks: 'Look it, you can't jam change down the American people's throat unless they perceive there really is a problem, that there's something there that isn't going to work 12 or 14 years from now, and it's going to be a catastrophe when we reach that point,' " Hastert said.

The speaker added that his members would be able to "lift this load" only if the Senate is headed toward passage as well, and if some Democrats are willing to join.

Aides said Hastert is pleased with Bush's effort and is optimistic about the outcome, but his frankness caught many at the Capitol by surprise. His remarks reflected the trepidation of lawmakers from swing districts and areas with large concentrations of senior citizens.

Rep. Jo Ann Emerson (R-Mo.), an Appropriations Committee member, gave voice to the GOP's internal opposition in a Jan. 24 form letter to concerned constituents. The letter undercuts the heart of Bush's proposal.

"I cannot support any plan to allow workers to place any portion of their Social Security taxes in risky investments, especially those that depend upon the stock market to appreciate in value," she said in the letter, obtained by the Web log Talking Points Memo. "It remains my opinion that Social Security reform is not necessary at all if Congress would seriously address Medicare reform, balance the budget, erase the trade deficit, and make pension reform a real priority."

She said in a more recent statement, however, that she has "an open mind on what might be done."

Dems wait and see

Democratic leaders, who have been debating whether to release a plan of their own, said they have decided not to as long as Bush's ideas are undergoing so much criticism. The current strategy calls for them to wait and see if the proposal dies, and only then come forward with their own blueprint for some type of retirement savings accounts, lawmakers said.

Rep. Rahm Emanuel (Ill.), chairman of the Democratic Congressional Campaign Committee, said polling shows that Bush's ideas are "losing altitude fast."

But Republican National Committee Chairman Ken Mehlman held a conference call yesterday to declare himself encouraged by recent polling that shows strong majorities agreeing that Social Security faces future problems. He said in a memo to party leaders: "Social Security reform is not only good policy, it's also good politics."

Sen. Thomas R. Carper (D-Del.) said he is open to considering personal accounts because they might stimulate savings. "I don't believe that we should rule out the accounts," he said in an interview with the Associated Press. But he said he would not support significant benefit cuts or significant borrowing to pay for the accounts.

Bush spent much of the week speaking throughout the country about his proposal for restructuring Social Security, but without providing details — such as precisely how to offset the large cost of the transition to new investment accounts for younger workers. Officials have said massive borrowing might be part of the solution.

Tax-cap changes in offing?

The president has ruled out raising taxes to fund the new program. But the White House has not answered repeated questions from reporters about whether Bush would consider it a tax increase to raise the cap — currently $90,000 — on the amount of income that is subject to payroll taxes. Some lawmakers have said that the unwillingness of Bush aides to rule that out suggests it might be part of his preferred package.

Worried about possible defections, administration officials have tried to reassure GOP lawmakers in several ways. For example, the White House produced a video of Bush's roadshow to show wavering Republicans that the president is working as hard on the issue as he did during his own campaign.

© 2005 The Washington Post Company